Ontario's biggest paint recycler has informed Toronto and several Ontario municipalities that it will stop collecting recycled paint and paint cans in less than two weeks, saying new rates set by Stewardship Ontario, the arm's-length provincial government agency that runs its recycling programs, are "not financially feasible."
Industry sources say that Hamilton-based Hotz Environmental on Monday contacted the municipalities of Toronto, Peel and Niagara Region and possibly others to inform them it would cease service to them on Feb. 10, effectively pulling out of a new program that changed how waste-management firms are funded for removing and processing household hazardous waste.
"We are very concerned," said Norm Lee, director of waste management with the Region of Peel, the province's second-largest municipality. "This is a critical waste stream. My concern is they haven't resolved their differences [with Stewardship Ontario] and if they can't, it could lead to service disruptions."
Used paint and related products account for about half of all volumes of household hazardous recycled items in Ontario, and Hotz processes the vast majority of that volume, according to the Ontario Waste Management Association.
Last year, Stewardship Ontario informed the industry and municipalities that it would begin dealing directly with haulers and processors, issuing "incentive payments" based on the type and volume of waste hauled and processed, effectively removing municipalities as middle-men.
The problem, said Rob Cook, chief executive officer of the OWMA, is that the model Stewardship Ontario used to calculate the rates appears to be "simplistic" and doesn't reflect the way material is collected and passes through transfer stations. "Every service provider I'm aware of looked at the numbers and said, 'It's not reflective of my costs to deliver these services – it's way low,' " he said.
Stewardship Ontario spokeswoman Rula Sharkawi said the new incentive payment program was developed with input from service providers, industry associations and municipal groups and details were "diligently shared" at numerous forums throughout 2011.
Although she declined to comment about the Hotz situation, Ms. Sharkawi said "there will be zero service disruption at municipal depots."