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Stewardship Ontario under fire over hazardous-waste removal pricing plan

A city worker wheels a steel drum containing old pots of household paint at the household hazardous waste depot at Commissioners St. transfer station in Toronto on Wednesday February 1, 2012.Photo by Chris Young for The Globe and Mail

Chris Young/Chris Young for The Globe and Ma

Stewardship Ontario, the province's recycling agency that angered consumers two years ago by introducing poorly explained "eco-fees," has thrown Ontario's hazardous-waste recycling business into disarray by imposing a controversial new pricing plan.

The program, which has prompted at least two hazardous-waste transporters to pull their services, has left many municipalities scrambling to find new waste haulers. This creates another potential headache for the McGuinty government, already stung by controversies related to other quasi-government provincial bodies, including eHealth and Ornge.

Industry suppliers accuse Stewardship Ontario of using a heavy hand to distort the marketplace, ignoring their concerns. "What's happening in the [municipal hazardous waste]program now is an ongoing symptom of the legislative framework around waste diversion that brought us eco-fees," said Rob Cook, CEO of the Ontario Waste Management Association, which represents service providers.

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Meanwhile, Stewardship Ontario has assured municipalities that their hazardous waste will continue to be hauled away – albeit by new suppliers the municipalities will need to contact. Nervous municipalities are taking a wait-and-see approach.

"Our expectation is it will create a bit of a hiccup in how we're serviced by the industry," said Norm Lee, director of waste management with Peel Region. "Stewardship Ontario has created some change. Time will tell whether these changes are good or bad. I was happy with the old way."

Stewardship Ontario is a quasi-governmental body that was established under the 2002 Waste Diversion Act and is overseen by provincially mandated Waste Diversion Ontario but operates as a private, not-for-profit organization. It is funded by fees collected from manufacturers and retailers of recycled goods, and its board is stacked with private-sector representatives. Officially, it does not report to government. "It is a privately funded organization and it needs an industry-led resolution," said a spokesman for Environment Minister Jim Bradley.

Since 2008, Stewardship Ontario has used those fees to fund household recycling programs in Ontario, replacing taxpayer dollars. Prior to this year, municipalities entered into tendered contracts with recycling-service providers, then submitted the bills to Stewardship Ontario, which would reimburse them.

But on Jan. 1, Stewardship Ontario changed the way hazardous-waste haulers and processors were paid. Under its revised plan, Stewardship Ontario directly gives industry suppliers "incentive payments" based on the type and volume of waste hauled and processed.

The intent, said spokeswoman Rula Sharkawi, was to end the practice of different municipalities paying different rates, and create "an open and healthy marketplace" with standardized rates.

But in the past week, service providers have balked at the new fees they say were arbitrarily chosen by Stewardship Ontario, are too low and don't take into account the realities of their business, including the costs of moving through transfer stations.

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On Tuesday, the province's dominant paint recycler, Hamilton-based Hotz Environmental Services Inc., told its customers, including the City of Toronto, that it would stop hauling away recycled paint – which represents over 40 per cent of all hazardous waste collected in Ontario – and pressurized gas cylinders, saying it would incur significant losses under the new scheme. Hotz is one of only three approved processors of paint recycled in Ontario, handling the vast majority of the 11.2 million kilograms of paint and coatings recycled in 2010.

Kingston-based Brendar Environmental told The Globe and Mail it is also opting out, while Jason Hedges, vice-president of Peterborough-based Buckham Transport – which provides waste-hauling services to Kingston, London, Durham Region and Cornwall – said his company will "probably" pull out as well.

"They're price-setting from a monopoly perspective and arbitrarily saying that's what it is," said Brent Bolger, the owner of Brendar.

Although Stewardship Ontario says the pricing plan was developed with input from all stakeholders, industry suppliers and municipal representatives alike say they had little input into the new system.

The new fee structure is the latest in a string of gripes about Stewardship Ontario, including criticism by some municipalities that the organization has been slow to reimburse them, and doesn't cover all of their costs. Stewardship Ontario has also begun investing in early-stage companies in the Blue Box recycling business, moving beyond its mandate to develop, implement and operate recycling programs.

Gord Miller, the environmental commissioner of Ontario, said the Stewardship Ontario situation "is part and parcel of the problem" stemming from much-needed amendments to waste-diversion legislation that was shelved after the eco-fees debacle in July, 2010, when Stewardship Ontario began levying fees on consumers on a range of products, including rechargeable batteries and fire extinguishers. In the face of public outcry, then environment minister John Wilkinson directed Stewardship Ontario to shelve the fees.

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"We're left with a whole bunch of policy problems," Mr. Miller added. "The model needs to be refined," including a clarification of roles and responsibilities between the Ministry of the Environment and Stewardship Ontario's overseer, Waste Diversion Ontario. "Diversion from landfill is not going well; we're not meeting our targets."

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About the Author

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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