Waste Diversion Act Industry Consultation Workshop & Simulcast:

Building the Blue Box Program Plan

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Damian Bassett Stewardship Ontario

Welcome

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TODAY’S INSTRUCTIONS

• Remember: veterans and rookies alike in audience

• Participants listening on-line as well• Save question for Q&A at the end• Those on-line:

download slides and supporting documents e-mail questions to questions@stewardshipontario.ca

• Deadline for official comment extended to January 24th

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TODAY’S OBJECTIVE

• Today’s objective is to provide an overview of the key elements of the Blue Box Program Plan

• Plan will be posted on January 21st

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DRAFT PROGRAM PLAN

• Review key issues to be addressed in the plan

• Not yet approved by Stewardship Ontario Board

• Must also be reviewed and approved by WDO

• Final approval rests with Minister of Environment

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DISCHARGING YOUR OBLIGATIONS

• OPTION 1: Membership in Stewardship Ontario Discharge legal obligation

• OPTION 2: Industry Stewardship Plan Follows approval of Blue Box Program Review and approval of WDO required Meet or exceed Blue Box Program Subject to WDO and MOE fees Monitoring and reporting requirements

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PLAN DEVELOPMENT PROCESS INPUT

• Stewardship Ontario Board of Directors• Advisory Committees

Materials & Packaging Advisory Committee Printed Paper Subcommittee Data & Reporting Advisory Committee

• AMO/Stewardship Ontario Task Group• Public Consultation• Municipal Consultation• Industry Consultation• Website

Questions@stewardshipontario.ca Comments@stewardshipontario.ca

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KEY CONSULTATION MESSAGES

Industry• Lack of time to understand, prepare and

budget• Unclear what and when have to report and

pay• Levy formula complicated, weighting and

amounts have changed• Impact of non-compliance on first year

levies

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KEY CONSULTATION MESSAGES

Municipal• Process too slow, dollars need to flow

faster• Year 1 funds not enough• Effectiveness and Efficiency Fund is

too big• Not enough municipal control

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KEY CONSULTATION MESSAGES

Public• Target measures not high enough• Increased education and awareness

is a number 1 priority• More dollars needed for north, rural

and multi-family programs

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Gordon Day Stewardship Ontario

Definitions & de minimis Update

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BLUE BOX WASTE

• Regulation 2002.0351.e defines Blue Box Waste as:Waste that consists of any of the following

materials, or any combination of: paper, plastics, metal, glass, textiles.

• Definition is broad in scope, encompassing packaging, printed materials and a wide range of consumer products.

• Municipal blue box programs collect packaging and printed materials and do not generally collect consumer products.

• Blue Box Program Plan addresses only consumer packaging material and printed papers commonly found in household wastes.

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BRAND OWNERS• Brand owner or trade-mark owner defined as:

a) Packer-filler for products/title owner or publisher for printed paper in Ontario that result in Blue

Box Wastes; orb) Party that causes packaging or printed materials

that result in Blue Box Wastes; orc) Brand owner’s/publisher’s Ontario legal entity for

product packaging or printed materials imported to Ontario; ord) Where the brand owner whose legal entity is outside Ontario agrees to register with Stewardship Ontario and discharge their responsibility

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FIRST IMPORTER

• Where the brand owner/publisher does not have an Ontario legal entity, the legal obligation resides with first importer to Ontario: a) The first person to take possession of the product in Ontario.b) Except where brand owner outside of Ontario agrees to register and discharge responsibilities through Stewardship Ontario

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DE MINIMIS EXEMPTION

• Ministerial requirement for the program plan• Difficult to find balance between level

playing field and burden on small business• Current formula requires stewards to absorb

the 50% share of costs for materials exempted under de minimis rule

• Estimate impact of 2%-5% of tonnage• Estimate exemption of >30,000 small

businesses

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DE MINIMIS UPDATELevel 1 • Generators of Blue Box Waste exempt from

obligation if Ontario wholesale sales are below $2 million* in 2002

Level 2 • Generators with sales >$2 million in 2002 are

required to register with Stewardship Ontario• Stewards could be exempt if they generate

less than 15 tonnes* of packaging or printed paper in 2002

* Reviewed annually to assess impact

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DE MINIMIS FLOWCHART

Do you generate Blue Box Wastes in Ontario?

Exempted from financial obligations to Stewardship

Ontario for 2003.

Step 1

Were your Ontario sales $2 million or greater in

2002?

Did you generate >15 tonnes* of blue box

wastes in Ontario in 2002?

NO

NO

NO

YES

YES

YES

Step 2

Step 3

Step 4

Obligated to contribute to Stewardship Ontario through

material levy on tonnes of blue box wastes in Ontario

for 2002

* >75 tonnes for newspaper publishers

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Derek Stephenson Stewardship Ontario

Year 1, Projections, Fees & Governance

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PROJECTED DATE OF OBLIGATION

• Plan submitted to Minister on 28 February 2003• 30 days review by Ministry with concurrent 30

days posting on Environmental Bill of Rights• Enabling Regulation March 31• Notification period of 60 days• Obligation date for stewards of June 1, 2003

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YEAR ONE MUNICIPAL PAYMENTS

• Total Net Municipal Program Cost in 2001 was $62,500,000

• Industry responsible for 50% of that total = $31,250,000

Date of Obligation = June 1, therefore:• 7/12’s Industry Obligation $18,229,167• CNA/OCNA In-kind Contribution $1,300,000• Total Municipal Payments $16,929,167

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OTHER PROGRAM IMPLEMENTATION COSTS

• Market Development program including- Green Procurement Program $100,000- Glass Market Development $475,000

• Waste Audits $250,000• Data Collection and Analysis $75,000• Financial/Engineering Audits $300,000• Best Practices $200,000• MOE Enforcement $100,000• WDO share of costs 0• Management & Administration $3,342,000• Total $4,842,000

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YEAR ONE OBLIGATION

• 7/12’s Industry Obligation $18,229,167• CNA/OCNA In-kind Contribution $1,300,000• Total Municipal Payments $16,929,167• Other Programs $4,842,000• TOTAL $21,771,167

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LEVY SETTING METHODOLOGY

• Three factors taken into consideration in calculating material specific levies: The recycling rate of each material The net cost to recycle each material An equalization factor reflecting costs

that would have been incurred if all materials recovered equally

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PROPOSED WEIGHTING AND RATIONALE

• Reviewed numerous weighting scenarios, changing each of the three factors

• Continuing to consult on flexibility of Equalization Factor Initial agreement on 15%

• An emphasis on recovery favours materials with higher recovery rates

• An emphasis on net cost favours materials with the lowest cost to manage

• Recommended balance is 42.5/42.5/15

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YEAR 1 MATERIAL SPECIFIC LEVIES

Yr. 1 Levy Yr. 1 Levycents/kg cents/kgw. Year 1 w. 95%

Compliance Compliance

Category Material Estimates Estimates

PRINTED PAPERPrinted Paper Newspaper 0.003 ¢/kg 0.003 ¢/kg

Magazines and Catalogues 0.10 ¢/kg 0.08 ¢/kgTelephone Books 0.08 ¢/kg 0.06 ¢/kgOther Printed Paper 0.10 ¢/kg 0.08 ¢/kg

Printed Paper Total 0.03 ¢/kg 0.03 ¢/kg

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YEAR 1 MATERIAL SPECIFIC LEVIESYr. 1 Levy Yr. 1 Levycents/kg cents/kgw. Year 1 w. 95%

Compliance Compliance

Category Material Estimates Estimates

PACKAGINGPaper Packaging Old Corrugated Containers 5.14 ¢/kg 3.67 ¢/kg

Old Boxboard 6.33 ¢/kg 5.70 ¢/kgPaper Packaging Total 5.72 ¢/kg 4.67 ¢/kgLaminant Packaging Gabletop 5.37 ¢/kg 4.76 ¢/kg

Paper Laminants 6.57 ¢/kg 5.10 ¢/kgPlastic Laminants 9.78 ¢/kg 6.50 ¢/kgAseptic Containers 5.37 ¢/kg 4.76 ¢/kg

Laminant Packaging Total 8.07 ¢/kg 5.78 ¢/kgPlastics PET bottles 7.14 ¢/kg 6.73 ¢/kg

HDPE bottles 7.97 ¢/kg 7.06 ¢/kgPlastic Film 10.01 ¢/kg 6.66 ¢/kgPolystyrene 9.29 ¢/kg 6.18 ¢/kgOther Plastics 9.43 ¢/kg 7.32 ¢/kg

Plastics Total 8.90 ¢/kg 6.79 ¢/kg26

YEAR 1 MATERIAL SPECIFIC LEVIES

Yr. 1 Levy Yr. 1 Levycents/kg cents/kgw. Year 1 w. 95%

Compliance Compliance

Category Material Estimates Estimates

PACKAGINGFerrous Food & Beverage Cans 4.18 ¢/kg 3.70 ¢/kg

Aerosols 4.18 ¢/kg 3.70 ¢/kgPaint Cans 4.18 ¢/kg 3.70 ¢/kg

Ferrous Total 4.18 ¢/kg 3.70 ¢/kgAluminum Aluminum Cans -6.84 ¢/kg -6.84 ¢/kg

Aluminum Foil -3.31 ¢/kg -3.74 ¢/kgAluminum Total -6.39 ¢/kg -6.45 ¢/kgGlass Food and Beverage - Flint 4.22 ¢/kg 3.74 ¢/kg

Food and Beverage - Coloured 4.42 ¢/kg 3.92 ¢/kgLCBO - Flint 0.00 ¢/kg 0.00 ¢/kgLCBO - Coloured 0.00 ¢/kg 0.00 ¢/kg

Glass Total 2.27 ¢/kg 2.01 ¢/kg

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LEVIES TOO HIGH OR TOO LOW

• Total levies received from stewards will be compared with levies calculated for each specific material category If the levies received are greater than required, the

excess will be credited back to stewards on the next installment and the assumed de minimis/compliance rate estimate changed

If the levies received are less than required, the assumed de minimis/compliance rate will be decreased with additional fees requested from stewards on the next installment

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PROJECTED RECOVERY SCENARIOS• Natural Growth: Recovery Rate stays at 45%• 50% Scenario: Recovery Rate increases to 50% with

individual recovery rates set for each material Table 6.2.1Estimate of Future Program Recovery Quantities

Actual Recovery Natural 50% Natural 50% Natural 50%Category Tonnes Rate Growth Recovery Growth Recovery Growth Recovery

Paper Packaging Total 133,527 50.5% 139,700 159,700 143,900 164,500 50.5% 57.7%Laminant Packaging Total 1,945 1.5% 2,100 5,000 2,100 5,100 1.5% 3.8%Plastics Total 26,339 15.8% 27,500 34,000 28,400 35,000 15.8% 19.4%Steel Total 32,582 48.0% 34,100 41,700 35,100 43,100 48.0% 58.9%Aluminum Total 10,875 38.7% 11,300 14,100 11,700 14,600 38.6% 48.2%Glass Total 102,552 58.2% 107,300 118,700 110,400 122,200 58.1% 64.3%

TOTALS 699,255 45.0% 731,400 814,700 753,200 839,200 45.0% 50.1%

*All estimates rounded to the nearest 100 tonnes.Natural Growth scenario represents growth equivalent with increases in population50% scenario represents growth in tonnes such that 50% of all recyclable materials generated are recovered (not equal by category).

Recovery Ratesin ProjectionsQuantity Recovered is in Tonnes

2001 20062004

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FIVE YEAR COST PROJECTIONS

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WHY COULD COSTS INCREASE?

• Population and household growth• Increased waste generation rates• Increased material recovery rates

Increased promotion New recycling approaches

• Weak revenue forecasts• Expiry of existing municipal contracts• Inclusion of municipal indirect costs

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COST CONTROL ELEMENTS

• 50/50 cost sharing• Municipal funding allocation formula• Audits of municipal costs and programs• Audits of stewards reports• 10% Effectiveness and Efficiency Fund

program investments and incentives engineering audits promotion of best practices

• Market development program• Spreading WDO/Stewardship Ontario program

costs across other designated waste streams

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GOVERNANCE

• Members All obligated stewards

• Directors Representative of “sectors” of members

• Principle “He who pays, plays”

• Founding Board Associations representing obligated stewards from

WDO Board

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GOVERNANCE

• Future Board Approximately 20 directors Put in place to fairly represent contributions by

obligated stewards

• Committees of the Board Future structure Audit

• Meeting frequency To date: as required

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KEY DATESJanuary 21 – Draft plan presented to WDO Board and posted 24 – Final date for industry comments to draft plan 29 – WDO Board revisions to 1st draft planFebruary 6 – Stewardship Ontario review of draft plan 11 – Revised draft plan submitted to WDO 18 – WDO Board meeting to finalize plan 28 – Final plan submitted to Minister. Posted to

EBR for 30 days comment

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KEY DATES

March

31 – Projected approval date for Minister with Regulation

June

1 – Industry’s obligation begins 60-90 days after promulgation of Regulation

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BREAK

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Steve Savage BDO Dunwoody

Demo: On-line Data Management & Reporting

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Question Period

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Thank You

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