Cost Funding under the new Recycling Legislation: A WASTE of time for Northern Ontario?

May 29, 2017 - A disagreement between the private industry association that funds municipal recycling programs and the municipalities that operates these programs has contributed to uncertainty about the financial sustainability of recycling in Ontario. New legislation that aims to reduce the amount of waste going to landfills in the province will attempt to overcome this problem by putting more discretionary power in the hands of the Minister of Environment and Climate Change. The Minister will have broad powers to determine the funding model of recycling programs in the province. But Northern Ontario communities need to be assured that province-wide mandates for waste management funding will take the unique problems faced by northern municipalities into account.

In 2002, Ontario set out to reduce the amount of waste being sent to landfills across the province by targeting 60% of overall waste for diversion from landfills to recycling programs. Since then, this “diversion rate” has stalled at around 50% for residential waste, and at just 15% for Industrial, Commercial, and Institutional Waste (ICI). In Northern Ontario, these figures are even lower.

A major obstacle to improving the performance of recycling programs over the past decade has been the way in which the producers association, Waste Diversion Ontario (WDO), funds municipal Blue Box programs. Municipalities reported performance data about their waste management systems to WDO under the Municipal Datacall. The Datacall is a clearing house where municipalities report the number of households served, the amount of materials collected, the amount of waste captured by the system, the amount of recyclable material put on the market, and the overall cost of the program. WDO uses Datacall reports to determine the cost of residential recycling programs and to distribute its share of funding. Over the course of the program, however, municipalities have complained that they had been shortchanged by some $233 million. In 2014 the dispute was partly settled by arbitration, but the issue has not been entirely resolved. According the arbitrator,there have never been detailed guidelines about what costs are eligible for funding by WDO.

In June of last year, the former Waste Diversion Act was replaced with the Waste-Free Ontario Act. The new legislation makes producers and importers of packaging and other materials in the province responsible for ensuring that their products do not end up in landfills and aims to improve both residential and ICI diversion rates. The legislation is a high level directive that allows the Minister of Environment and Climate Change to set specific regulations. As such, the Minister has wide discretionary powers. For example, provisions that set the rate of funding for Blue Box programs by industry at 50% has been replaced with a clause that allows the Minister to set the rate. A draft strategy released by the province last year stated that "if producers were made fully responsible for the Blue Box materials, municipal taxpayers could experience significant savings." It remains to be seen whether the province will in fact ask producers to pay more for

While municipalities across the province have lined up to voice their support for the overall objectives of the Waste-Free Ontario Act, many have flagged the specific problems of program funding as well as the use of Provincial Policy Statement. The Association of Municipalities of Ontario cautions that, “the municipal sector have seen mixed results in the use of Provincial Policy Statements under the Planning Act… it is critical to ensure that policy statements are drafted in a way that provides for enforceable measures.”

The decision to use Provincial Policy Statements to regulate municipal waste management could raise a red flag in Northern Ontario. Here the application of Provincial Policy Statements designed to contain growth in the South can have a negative impact on northern communities trying to encourage growth. Likewise, northern municipalities should be weary of policy statements that address the problems of larger urban centers while ignoring the unique problems of service provision in rural and remote population centers. The new Act will attempt to clarify what costs are entailed in waste management, but the Minister needs to make sure that uniform practices are introduced across the province. This includes parts of Northern Ontario where smaller tax bases and larger geographies make service provision a challenge. The costs of operating recycling programs in the North may differ significantly from the South.

The success or failure of the Waste-Free Ontario Act will depend on the ability of the Minister to take into account the needs of all communities in the province. Asking private industry to take on a greater share of the burden of reducing waste will incentivize this economic sector to play a larger role. But it is imperative that the assessment of program costs be done in a way that is open, accountable, and equitable. Otherwise else the same disagreements that plagued Blue Box funding will threaten the effectiveness of efforts to divert materials from landfills.

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