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GFL’s bright green trucks collect half of Toronto’s waste and recycling, in a contract first awarded when Ontario Premier Doug Ford’s brother, Rob Ford, was the city’s mayor.The Globe and Mail

Waste industry giant GFL Environmental Inc. has launched a bid to exert more influence over Ontario’s planned privatized blue-box regime, creating a new organization under the province’s rewritten recycling rules and purchasing an industry association that tracks recycling data.

GLF said Tuesday it was creating a new organization called the Resource Recovery Alliance that would participate in the province’s blue-box overhaul, which aims to hand the control and cost of the existing system to the private sector over the next few years. The company also said it had acquired the Canadian Stewardship Services Alliance, or CSSA, an entity originally set up as a data portal by an array of companies to track their recyclable waste.

Both moves raised alarms for some large producers of recyclable waste, such as retailers and pop bottlers, who have also been working on their own plans for the transition to Ontario’s new recycling system and warn that GFL could end up with an unfair advantage under the new rules.

But Patrick Dovigi, GFL’s chief executive officer, says his announcement on Tuesday is not an attempt to take over Ontario’s new recycling regime. He said contracts for future curbside collection or processing of the province’s recyclables would still be subject to competition.

Ontario’s Progressive Conservative government is moving blue-box recycling across the province from a splintered, municipally run system – 50-per-cent funded by the producers of the waste – to a concept known as “extended producer responsibility,” or EPR.

Under the new regime, the province sets recycling targets but requires the industry that actually creates the waste – retailers, pop bottlers, plastic producers – to run the system and cover all its costs. It is similar to systems already in place in British Columbia and in Europe.

Ontario’s new regulations require the private sector to create “producer responsibility organizations,” or PROs, to co-ordinate the new system. Major retailers, beverage and plastic companies have been working on establishing a not-for-profit PRO, in an effort co-ordinated by the Retail Council of Canada. They say it would put out collection and recycling contracts across the province for competitive bids.

Ontario unveils producer-pay recycling system, but with lower targets

But on Tuesday, Vaughan, Ont.-based GFL – which has grown by leaps and bounds over the past decade to become one of North America’s largest waste collection and processing companies – publicly announced its own PRO, called the Resource Recovery Alliance. GFL says the new PRO will be “vertically integrated within GFL’s service offerings.” The company says the new initiative will help it expand in the United States, where jurisdictions are also considering switching to EPR.

Some critics warn that if a PRO run by a waste hauler came to dominate the new system, it could hand itself contracts without competitive bidding. And the resulting higher prices for recycling services would end up baked into higher prices for consumer products. (One estimate already pegs the cost of Ontario’s new system at about $600-million, or double its current price tag.)

“It’s a wealth transfer from consumers of products to the waste-management company, to GFL,” said Usman Valiante, a recycling expert who is advising companies involved in the creation of the competing PRO. “When you go to buy your box of Cheerios, well, in there would be an undue profit margin that goes to GFL.”

A clock is ticking on the process, which must see producers sign up with PROs within just weeks, with the transition to the new system set to start in 2023. Under Ontario’s regulations, a PRO or group of PROs that has two-thirds of the producers of recyclables (measured by weight) signed up can set the rules for the provincewide system. If GFL were to win over two-thirds, critics warn, it would essentially mean handing the province’s recycling system to one giant waste hauler.

In an interview, Mr. Dovigi dismissed these concerns, saying he does not foresee his new PRO dominating the system. He said the company decided to set up its own PRO after hearing from some waste producers who were concerned the new regime would be controlled by the large grocery chains. He said he expects there to be multiple PROs that will have to work together.

He also said producers who sign up with his PRO would form a board that would oversee the competitive awarding of contracts. And he added that GFL already performs the equivalent role of a PRO now for all of B.C., under its EPR regime.

“We can work collaboratively all together to make it work. I think [our initiative] was just making sure that there’s another seat at the table that can voice concerns or issues that needed to be addressed,” Mr. Dovigi said.

Denis Goulet, president of Miller Waste Systems Inc., a competitor of GFL’s which collects garbage and recycling in municipalities across Ontario, said his company also considered setting up its own PRO – but decided against it.

“In discussions with numerous stakeholders, we couldn’t find a way to play both roles without creating a conflict of interest,” Mr. Goulet said, adding that he was confident that all players in the new system want an open, fair and competitive market.

GFL’s bright green trucks collect half of Toronto’s waste and recycling, in a contract first awarded when Ontario Premier Doug Ford’s brother, Rob Ford, was the city’s mayor.

In a slide deck sent to waste producers about its plans in May and obtained by The Globe and Mail, GFL says its five recycling hubs in Ontario can already handle half of the province’s recyclables. Mr. Dovigi was invited to speak at the government’s virtual media conference unveiling the final form of its blue-box regulations last month.

GFL, which has been pitching its PRO idea to waste producers for weeks, now has what some say is another key advantage: It also announced Tuesday it had made a deal to acquire the Canadian Stewardship Services Alliance, or CSSA, an entity originally set up as a data portal by an array of companies to track their recyclable waste in B.C., Manitoba, Saskatchewan and Ontario. The move has producers fuming.

In a statement, the president and CEO of the Retail Council of Canada, Diane Brisebois, said the CSSA “was created as a not-for-profit organization to support producers; it was not created for the profitability of one company.”

She said her and other industry organizations were still studying the implications of the deal, including the “transfer of the ownership of our members’ confidential data and the acquisition of the assets that producers have invested in over the last decade.”

Spokespeople for Ontario’s recently appointed Environment Minister, David Piccini, and the Premier’s office did not respond to requests for comment.

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