May – that time of year for thousands of companies in Canada to assemble their packaging and printed paper (PPP) stewardship reports for up to five provinces across Canada. This ritual is not new to most companies and staff who prepare their internal reports and are often asked to make initial estimates of future financial obligations. The provincial PPP stewardship agencies do not provide those figures until the Fall, but most finance departments need to know how much this is going to cost them next year, much earlier. Many look at trends and provide conservative forecasts. When asked by our clients we suggest – sales growth, plus 10% more than you are paying this year as a general rule of thumb. However, for companies that are reporting into Stewardship Ontario this year, this general rule may not be sufficient.
There is a new fee setting methodology that has been approved for 2018, and for many companies this will result in major fee increases for stewards. The new fee setting approach was implemented in British Columbia and Manitoba this year, and the same order of magnitude changes are expected in Ontario for the next invoicing period. While British Columbia has some of the highest packaging fee rates in Canada, for many stewards it is the sheer volume of sales in Ontario that determines the majority of total fees companies must plan for.
Based on the new fee setting methodology, there will be a dramatic increase for some materials, a reduction for others, and modest impact on fees for a third group. Here is the estimated breakdown based on our understanding and application of the new methodology:
- Paper packaging such as boxboard, corrugated cardboard, and cartons (gable top, aseptic) fees are likely to see modest increases of between 1% – 5%.
- Fees are projected to be going down for steel cans (~53%), aluminum food and beverage cans (~200%), glass bottles and jars (~4%), and all of the printed paper categories (~20% to 80%). If you are a steward who is predominantly in these categories, you have some good news.
- However, stewards who report predominantly plastics are in for a huge shock with significant increases in PET (~60%), HDPE (~40%) and all other plastics (~20%).
While the potential changes in fee rates was raised by Stewardship Ontario in October of 2016, it is expected that many food and consumer goods manufacturers, and retailers will have some surprises and questions when the 2018 fees are publicized later this year.
If your organization has questions about how to optimize its Steward’s Report or has concerns about over-reporting, our team of experienced consultants at Reclay StewardEdge can help. For more information contact Gordon Day – email@example.com