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Ontario waste handlers challenge pay rates

Jimmy McIsaac picks up garbage and recyclables on his route in Toronto on May 17, 2011.

Peter Power/The Globe and Mail

As Ontario heads into peak hazardous waste-recycling season, the province's waste handlers say they're fed up with a lack of progress in fixing a payment system imposed on them earlier this year – and warn a growing number of them could quit taking waste from municipalities altogether.

The issue, they say, is a report ordered by the provincial government that was supposed to lead to a fix – but offers little promise of the substantive change waste handlers had hoped for.

Until recently, municipalities contracted waste-management companies to handle their hazardous material, then submitted the bills to Stewardship Ontario, an industry-funded organization that reports to provincially mandated Waste Diversion Ontario. Beginning in January, haulers and processors became subject to a fixed rate, set and paid by Stewardship Ontario.

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Some service providers have complained the new rates don't accurately reflect their costs and could put them out of business. Already, the largest paint recycler in the province has left the program as a result of the change.

Stewardship Ontario maintains the new rates are reasonable and points out that six new players have entered the industry in recent months, even as other, more experienced companies, announce their plans to quit.

In response to the industry backlash, Ontario environment minister Jim Bradley ordered a review of the change. A copy of a confidential April 12 report by accounting firm KPMG, obtained by The Globe, notes that the change caused "significant upheaval" among haulers and processors, and criticizes Stewardship Ontario for poor consultations and a lack of transparency in explaining how it came up with the new rates. It adds that the change doesn't account for additional costs now borne by recyclers and a transfer of risk away from Stewardship Ontario.

Despite those concerns, it concludes that the new system "appears to be working," noting that all of the municipalities KPMG contacted still had a service provider.

Stewardship Ontario called the conclusion an endorsement of its new approach, and said it's working to improve on other issues the document raised. "We are pleased with how the incentive program has performed to date," spokeswoman Rula Sharkawi wrote in an e-mail.

But the association that represents waste-handling companies warned that the report could prompt members who have been indecisive so far to leave the program – just as spring and summer, the busiest seasons in hazardous waste recycling, are about to begin.

"There's a lot of service providers that are still servicing, and they're doing it reluctantly under the assumption that this review was going to provide a different framework for them going forward," said Rob Cook, chief executive officer of the Ontario Waste Management Association.

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"I think there will be business decisions for people to withdraw from serving the market in some cases."

Brent Bolger, owner of Brendar Environmental Inc., which operates in Kingston and Muskoka, said the new prices offer no incentive for him to invest further in municipal recycling.

"I've told [Stewardship Ontario] 'How can I bid to lose money on your program?'" he said.

Mr. Bradley said his ministry is examining the report's recommendations, but, "it's premature to say if the rate will change."

Waste Diversion Ontario, which oversees Stewardship Ontario, said it won't act on the report until the province issues instructions, but will keep watching the organization's performance.

The province's largest paint recycler, Hotz Environmental Services, which left the Stewardship program earlier this year, said there's nothing in the report to draw it back.

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"I don't think much has changed as far as we're concerned," Hotz Environmental vice-president Pam McAuley said of the report. "I guess 'disappointed' is a safe word to describe our reaction."

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About the Authors
Parliamentary reporter

Kim Mackrael has been a reporter for The Globe and Mail since 2011. She joined the Ottawa bureau Sept. 2012. More

Sean Silcoff joined The Globe and Mail in January, 2012, following an 18-year-career in journalism and communications. He previously worked as a columnist and Montreal correspondent for the National Post and as a staff writer at Canadian Business Magazine, where he was project co-ordinator of the magazine's inaugural Rich 100 list. More

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