On July 7, 2017 the City of Toronto, the Association of Municipalities (AMO), the Regional Public Works Commissioners of Ontario (RPWCO), the Municipal Waste Association (MWA) as well as Stewardship Ontario (SO) submitted a joint letter requesting support for beginning the transition to a Circular Economy for Paper Products and Packaging (PPP) in Ontario. In response, the new Minister of Environment and Climate Change (MOECC) Chris Ballard wrote a letter to SO and the Resource Productivity and Recover Authority (RPRA) providing official direction for developing a proposal for an amended Blue Box Program Plan (BBPP). This effectively began what will be an intensive and complex process of transitioning the Blue Box Program, including modifying established roles and responsibilities of various stakeholders.
The Minister’s letter and the accompanying addendum to SO and RPRA outlines his expectations for the amended BBPP proposal, which largely affect three types of stakeholders: municipalities, stewards, and agencies. While the amended BBPP will also impact private service providers, they are not mentioned in the scope of the Minister’s letter.
What does this mean for Municipalities?
Municipalities will have a choice, to accept SO’s terms and transition, or be considered a non-transitioned municipality, allowing Municipalities to be fully self-determinant. At the outset of the addendum, the Minister’s letter acknowledges that pursuant to an agreement between SO and each transitioned municipality, “SO would provide services for residential PPP supplied by stewards to Ontario residents and covered under the BBPP.” The amended BBPP must outline how and when this responsibility would be moved from transitioned municipalities to SO.
For transitioned-municipalities, there will be new requirements to be addressed by SO including:
- Increased diversion rate target of 75% for PPP materials supplied to transitioned-municipalities. This will require all affected municipalities to increase local diversion in order to meet the provincial target.
- Material specific management targets
- Expansion of the defined materials covered in the BBPP
Non-transitioned municipalities refer to those that have not entered into an agreement with SO, and maintain the responsibility to provide waste management and collection services:
- Non-transitioned municipalities are eligible for reimbursement under s.11 of the Waste Diversion Transition Act, 2016 (WDTA) based on the municipality’s verified net cost operating costs.
Eligible costs to be included in the calculation of municipal net cost will be defined in the amended BBPP.
What does this mean for Stewards?
Since the inception of the Blue Box program in Ontario, stewards (producers) have provided up to 50% of the funding through stewardship fees assessed on individual material types and paid to SO. The new Act however, is promoting competition in a new way that may afford alternative avenues to SO for Stewards to meet their obligations.
Stewards could also see a number of changes in their roles and responsibility in the Ontario market, including:
- A new definition for obligated Steward that looks at expanding the current definition:
“Producers are brand holders and/or others with a commercial connection to designated products and packaging in Ontario, such as first importers, wholesalers, retailers, and e-tailers.”
- The shift to full Extended Producer Responsibility (EPR), which will begin to adjust the obligation from the current 50%, shared with the municipalities to 100% producer responsibility;
- Increased recycling target of 75%;
- Expansion of the obligated material list to include paper products, primary packaging, convenience packaging, and transport packaging, as defined in the Resource Recovery and Circular Economy Act (RRCEA); and
- A new arrangement established with Canadian Newspaper Association (CNA)/Ontario Community Newspaper Association (OCNA) members to ensure these can meet their EPR obligation for old newsprint (ONP) without cost to transitioned-municipalities.
How will this change the role of Stewardship Ontario?
Stewardship Ontario will experience a role change with both phases of the transition. As indicated above, for transitioned-municipalities, SO will provide the contract management for the collection and sorting of recyclables. This is a marked change from the existing program operation, whereby municipalities organize their own collection and waste management services and are reimbursed for eligible costs, as verified by the Municipal Datacall.
The Minister has also called on SO to implement new tools to encourage or dissuade producers from using difficult to manage materials. RPRA and SO will need to develop additional methods to reduce PPP related waste. This includes encouraging the use of recovered resources in the manufacturing of a material and reducing the amount of difficult to recover material on the market by discouraging its’ use with tools such as steward rules and fee setting mechanisms.
The transition of the Blue Box Program in Ontario is expected to occur in two phases, the first phase will include a shift from the current program structure to that of the arrangement laid out in the WDTA. While SO takes this role on, it is important to note the Minister has prescribed that the amended BBPP must:
- Establish a mechanism to support a fair and open marketplace for Blue Box services under the WDTA;
- Not create barriers to competition in the second phase of transition that will result in individual producer responsibility under the RRCEA; and
- Describe how contracts held by SO for the collection and management of PPP will be managed upon the wind up of the Blue Box Program to enable competition once materials are regulated under the RRCEA
Recently, Stewardship Ontario announced a Stakeholder and Indigenous Peoples Engagement and Communications Plan for the Development of the Proposed Amendment to the Blue Box Program Plan, available here. This consultation is the next step toward developing an Amended BBPP.
The Minister’s direction calls for an amended BBPP that would significantly change the current BBPP, from level of steward responsibility to the way the program(s) are administered. The next phase will likely focus heavily on municipal and steward consultation in preparation for drafting the amended BBPP. However, the Minister’s direction includes some prescriptive requirements that will likely remain unchanged, notwithstanding a lack of timeline for the implementation: the shift from 50% responsibility to 100% EPR; the new provincial diversion target of 75% and material specific targets; and the introduction of competition in Ontario PPP Stewardship programs.