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As businesses move to take over responsibility for recycling, cities raise a host of questions

September 18th, 2013 · 11 Comments

Who knew recycling was such a hot topic? It has been the last week, as cities have publicly raised concerns about the new system that’s about to descend on the province.

That new system, which came about because of the province’s efforts to get producers to pay for the cost of recycling their packaging and products (and thereby think about ways to reduce that), will see a non-profit group formed by businesses take over parts of the recycling mechanism in cities throughout the province.

You can read about their point of view here, outlining what they think the benefits of the system will be: increasing the rate of recycling, having industry take care of its own me

And then you can read this story, which is what cities are worried about.

Published Tuesday, Sep. 17, 2013 09:22PM EDT

Last updated Wednesday, Sep. 18, 2013 12:45AM EDT

B.C. cities say taxpayers could end up covering the costs of a new provincial recycling system instead of those who were meant to pay for it – the businesses that generate packaging waste.

At the moment, cities pick up recyclables along with garbage and deliver that material to companies that buy the used glass, metal, paper and plastic. Under the new program, Multi Material BC, a non-profit created by provincial businesses to help them meet new provincial regulations, will either organize a pickup with new contractors or give some money to the cities that want to continue to do it themselves.

But city officials say both options have so many grey areas that they fear cities, and their taxpayers, could end up paying a big part of the cost that is supposed to be carried by businesses.

“There’s just so many unknowns in the current proposal that it could dramatically increase our costs,” said Vancouver’s chief engineer, Peter Judd. He sits on a regional committee of engineering directors that has been tussling with the province and businesses for three months over the terms being set for the new program.

“It presents an unacceptable risk to our taxpayers. They will end up bearing the price, instead of the producers, which is the opposite of what was intended.”

The issue is being fought out in private meetings and conversations at the Union of B.C. Municipalities annual convention this week, as cities grapple with Multi Material BC’s proposals.

As well, an emergency resolution, asking for 90 extra days to negotiate a first contract, is coming up for debate Thursday.

The issue has come to the fore because the province is requiring all producers of paper and packaging – everyone from newspaper companies to wine makers to grocery stores – to take responsibility for those materials by May, 2014. The idea was that if businesses had to be financially responsible for disposing of their own packaging, they would have a huge incentive to look for ways to reduce it.

That’s a move that city representatives, from Vancouver Councillor Andrea Reimer to Port Coquitlam Mayor Greg Moore, say they support unreservedly.

But they say the proposed new system could end up costing B.C. residents twice. They’ll pay a fee to cover the cost of recycling every time they buy something. And then they’ll end up paying again, through their taxes, for the actual pickup.

MMBC gave cities a Sept. 16 deadline to decide what option they wanted under the new system.

Under one option, cities could choose to continue picking up glass, paper and other packaging with their own city crews or existing private contractors and get an “incentive payment” – or compensation – for that, but deliver the loads to companies that MMBC designated to handle the recycling.

But Mr. Judd and others say that the compensation being offered doesn’t cover existing costs. The MMBC payment would cover only 80 per cent of Vancouver’s budget for recycling pickup and only 40 per cent of Port Moody’s.

That’s even before MMBC potentially imposes new demands, like saying that all residents have to separate their glass from plastics and metal. That requirement for an extra box for every household would make the pickup process more time-consuming and expensive.

Cities also have the option of letting MMBC-designated contractors take over pickup, which would remove that part of the cost from their budgets and give them no compensation.

However, city representatives say they aren’t getting much information about how that will work and they are worried the new system will undermine two decades of success in getting residents to recycle. Those efforts have resulted in Lower Mainland residents recycling up to 70 per cent of what used to go in the garbage.

“If you just turn your back and let MMBC do it, you lose any semblance of control over service levels,” said Richmond Mayor Malcolm Brodie.

Mayors said they’re concerned that MMBC may choose to only pick up recycling once every two weeks or pick up on a separate schedule from garbage collection. Those kinds of small changes could make some people decide it’s easier to throw their wine bottle into the garbage.

Most B.C. residents didn’t know much about the issue until recently, because city politicians and staff had to discuss it privately, since it involved contracts.

But late last week, Vancouver announced publicly that it was unhappy with the proposed contract and started a public campaign to demand better terms. Surrey and Richmond have also been active in mounting a resistance campaign with Vancouver.

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  • Morven

    As far as I can tell, the proposed provincial program creates a pool of money with very little information on how the money is applied, who applies it and what are the risks.

    As is now commonplace with our provincial government, they ride rough shod over the ordinary citizen. No evidence, as far as I can tell has been presented on costs, benefits, and risks.

    If the provincial government was so dedicated to good environmental policies, they might want to also pay attention to, say, run-of-river schemes among many others.

    For once, I am in support of the City of Vancouver.
    -30-

  • Terry M

    Recycling was never a hot topic. It’s just business. Another way for governments to coerce their citizens to fork out more of their hard earned money. Got “green”?

  • Silly Season

    I asked a local Mayor yesterday to explain the whole program to me. He could not, for the reasons cited above—black holes all over the place. Way more questions than answers.

    I also asked what was in it for the province to back this program. Again, it’s a mystery.

    Not only do you have local governments up in arms, but so too you have waste management suppliers and companies in each jurisdiction (those ‘responsible producers’) who also don’t know what is going on and how it will all roll out. And as we know, businesses are not happy when there is too much unknown risk out there.

    The levels of service ‘offered’ by MMBC are laughable, on the face of it. Choose one from column A, one from column B or two from column C. The offfers of full service, according to the Mayoe I spoke to will leave him in a deficit position. For instance MMBC could ‘take over’ collection in a city and then subcontract to recyclers, re-sign current contractors or use their own fleet etc. But no one knows for sure. Some of the current waste management suppliers in Metro Van cities are coming to the end of their contracts in cities across the region. Who will pick up the slack if MMBC takes over and cherry picks its takings? The cities have no word/idea/clue at all. This could leave them in a greater revenue/tax crunch than before. Taxpayers would have to pick up the tab. And we know how taxpayers feel about any perceived raise in taxes without discernable raises in services.

    The financial end of things is unknown. What does it mean that a ‘producer’ must pay? Rather, who do THEY collect from? Is that retail outlets that carry all products? Would they try to charge back to their international suppliers in order to take care of costs? How would that be tracked?? What would it cost them? Surely they would add added costs onto their own mark-ups?

    For those local businesses who create packaging or waste, my understanding is that local governments are hearing from them. Those manufacturers are not happy—they were also supposed to register by Sept 16—and again, the rules/regs and operational side of this is completley confusing, and seemingly fitted with explanations that are wont to change each day. Reporting is gonna be a biotch…

    This is one big, smelly mess.

  • Morven

    The provincial government seems to have done about as good a job of communicating the benefits of recycling as it did with communicating the benefits of the HST.

    The practice is that you take a policy that is theoretically superior to the status quo, you are silent or ambivalent on the costs and benefits and then you are arbitrary in how you introduce it.

    The result – massive confusion and even less confidence that the provincial government has tracked down the costs, benefits and risks. If they have done so, it seems well buried in the bureaucracy.

    Further, BC is an open economy with strong trade ties with Asia. Producer responsibility you say.
    -30-

  • Everyman

    I find it hard to get enthused about recycling, when the Province ran that article showing just how much of a demolished house ends up in the landfill. One west side demo probably outweights two decades of me sorting through the numbers on my plastics.

  • Bill Lee

    This sounds so much like the Encorp money grab for bottles and light electricals.

    A licence to print money, as readers can see in the annual reports.
    http://www.return-it.ca/about/annualreports/

    They don’t pay a living wage for work in dangerous and unhealthy conditions(as any LCB back office worker can tell you).

    This brings back to mind the Consumer’s Association suit over the “Container Recycling Fee”
    Watchdog attacks recycling fees
    Consumers’ group applies to file suit over levies on beverage containers

    By ROBERT MATAS The Globe and Mail Thursday, July 14, 2005

    “….In 1998, the province required the beverage industry to charge a deposit to encourage consumers to return the containers. Two years later, the industry began to impose an extra recycling fee at the cash register.
    …“There was never supposed to be a recycling fee,” Bruce Cran said yesterday.
    Those costs were expected to be included in the price of the drinks, not included as an extra charge at the cash register, he said. “It was supposed to be a polluter-pay program and they [beverage manufacturers and distributors] were to accept responsibility for their own pollution,” Mr. Cran said.
    In an effort to put the onus for recycling back on the beverage industry, the consumers group has applied to file a class-action lawsuit against Encorp Pacific (Canada), the agency that collects and recycles beverage containers, and 40 companies that manufacture and sell beverages in the province.
    The consumer watchdog group says consumers should receive restitution for the recycling fees that allegedly were imposed without any authority. The group also alleges the companies unjustly kept $70-million from deposit fees on containers that were not returned.”

    On the 2012 Annual Report in the section Follow the Money
    page 52 Follow the Money
    Unredeemed Deposits Encorp is paid a deposit on every container sold. Deposits unclaimed are used as revenue
    16 million in 2012 (page 53)

    Container Recycling Fees
    When the revenue from unclaimed deposits and from sales of collected material are insufficient to cover the cost of recovering and recycling a specific container type, a non-refundable recycling fee is added to the container to make up for the shortfall.
    52 million in 2012

    Other Fees
    Revenues from service provider contracts
    12 million in 2012

    Reserves in 2012 were $ 27 million

    And what will the cities get out of this “privatization.” Does Christie Clark know?

  • jenables

    The thing that gets me is there is the residential side of waste, then there is the business side. I mean, it’s all well and good to recycle but businesses have to pay for garbage and cardboard pickup if you are a small business it may be difficult to justify the cost of recycling. Then there are restaurants who probably don’t use green bins, right? It sort of says to me that if there was an environmental basis to these things, and the city cared about that, they might look into providing recycling for businesses. After all, they are paying far more tax than residents.

  • jenables

    That was off topic, btw. This mmbc has suspicion written all over it. Seems somewhat like they are using legislative powers to take these saleable recycled materials while bearing none of the cost. So who gains here?

  • Mira

    Absolutely correct, Bill! # 6
    “This sounds so much like the Encorp money grab for bottles and light electricals.

    A licence to print money, as readers can see in the annual reports.
    http://www.return-it.ca/about/annualreports/

  • Michael Kluckner

    Everyman’s comment #5 reminded me of a bumper sticker I saw recently on a big black pickup truck: “I just burned the fuel your hybrid saved.”

  • Bill

    This has got to be one of the dumbest initiatives to come out of any government. Take a few minutes to read the material on the MMBC site – it is a bureaucrat’s dream. It would be an interesting exercise for some enterprising economist to tally the costs of this program – including the costs to small business in record keeping. There is no way the program merits spending these kinds of resources. And we wonder why are costs are so high in Canada that shoppers line up at the border. Incredibly dumb.