Ontario orders sweeping review of hazardous waste recycling program

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Ontario's Environment Minister has ordered a sweeping review of the body that oversees hazardous waste recycling in the province, including an examination of Stewardship Ontario's finances and its newly established incentive pricing program.

Stewardship Ontario reports to the provincially mandated Waste Diversion Ontario and collects fees from producers of hazardous materials such as paints and batteries, which it uses to pay for downstream recycling.

The not-for-profit corporation, which angered consumers two years ago with the failed introduction of "eco-fees" on some products, has been under fire again in recent weeks after it imposed a new fee structure to pay transporters and recyclers of hazardous waste.

At least two companies had threatened to pull their services, saying the new prices were too low to keep them in business.

Some municipalities also said Stewardship Ontario was already underfunding their hazardous waste recycling programs before the change, prompting concerns they might have to reduce recycling services to the public.

The ministry initially said it wouldn't get involved in the dispute, calling for an "industry-led resolution." Stewardship Ontario is an industry-funded organization and is not directly accountable to the provincial government.

But on Thursday, Environment Minister Jim Bradley said he was directing Waste Diversion Ontario, the provincially mandated overseer of Stewardship Ontario, to undertake the review because Ontarians are not recycling as much as they could be.

"It's tied up an awful lot in disputes over who's going to pay what," Mr. Bradley said. "I think we have to address that to get to a point where we're going to move forward substantially on [waste]diversion."

Until recently, municipalities in Ontario were responsible for negotiating their own hazardous waste recycling contracts with independent businesses, and submitted their bills to Stewardship Ontario.

But the corporation announced last fall that it would take the contracts out of the municipalities' hands and instead pay hauling and recycling companies a fixed fee for their work.

Stewardship Ontario argued that the move would encourage competition. But it was instead accused by industry players of distorting the market and not listening to input from municipalities or waste companies.

The province instructed Waste Diversion Ontario to review the new pricing plan to determine whether it is unfairly influencing the marketplace.

Mr. Bradley said he also wants to see an overhaul of Waste Diversion's board, so its composition is "based on skills as opposed to those that simply have interests in the field."

Waste Diversion Ontario CEO Michael Scott said he welcomed the changes to the board's structure, adding it's something his organization had asked for before the last provincial election.

The agency will be charged with conducting a detailed review of Stewardship Ontario's budget and expenditures, as well as its efficacy in diverting waste from landfills and incinerators. It will also conduct a similar review of the bodies that oversee electronics and tire recycling in the province.

"I'm optimistic that they can come up with the kind of information we need, the kind of guidance that will get us back into the direction we need to go," Mr. Bradley said.

He will also require Stewardship Ontario to collect fees at the end of each quarter, based on the actual costs of recycling materials instead of a projected cost, in response to concerns by recycling advocates that the old system didn't encourage increased recycling.

A release from the corporation said it had exceeded recycling targets over the past three years and was facing a budget shortfall because the ministry asked it to hold off on increasing industry fees. It said the change in funding for service providers was intended to "divert the maximum amount of waste in a financially responsible way."

Both recycling firms and municipalities welcomed the announcement as a positive first step. "You have no idea how happy [this news]made me," said Ottawa Councillor Maria McRae, who chairs the city's environment committee. "This is music to my ears."

Waste's chain of command

Corporations answer to Waste Diversion Ontario

Stewardship Ontario is a not-for-profit corporation that's responsible for the province's blue box and hazardous waste recycling programs. It collects fees from companies that manufacture and sell paint, batteries and other products, and uses the money to help pay for those items to be collected and recycled.

The corporation isn't funded by the provincial government and doesn't report to it. Instead, Stewardship Ontario is overseen by Waste Diversion Ontario, an arm's-length agency that manages the province's recycling programs.

Stewardship Ontario submits regular reports to the agency detailing the fees it paid to service providers and how much waste was diverted from landfills and incinerators.

Two other stewardship bodies, Ontario Tire Stewardship and Ontario Electronic Stewardship, also report to Waste Diversion Ontario.

In turn, Waste Diversion Ontario is accountable to the provincial Ministry of the Environment.

Thursday's instructions from Environment Minister Jim Bradley require Waste Diversion Ontario to change the composition of its board to include more experts on recycling and review the way all three stewardship bodies pay for waste diversion.

- Kim Mackrael