Taxpayers hit with $18 million bill to pay for eco-fee fall-out-Toronto Star

Moira Welsh
Staff Reporter
The Toronto Star

Ontario taxpayers have been hit with an $18 million bill for the province’s bungled eco-fee program. 

The Ministry of Environment stopped the program last summer after public outrage over eco fees added to bleach and other household chemicals created a public relations nightmare for a government heading into election mode. 

Liberals blamed the mess on Stewardship Ontario, which operated the government-mandated recycling program and has now sent the ministry a bill demanding $18.6 million in costs for the cancelled program. 

Environment minister John Wilkinson confirmed that the ministry is auditing Stewardship Ontario’s claim.

“We are open to reimbursing them,” Wilkinson said.

Stewardship Ontario is a private industry funded organization created by government order to manage recycling programs on behalf of its 1,500 members, businesses that make and sell the designated products.

The aim was to create an industry-funded program that would educate consumers on where to dispose of household hazardous waste and track the waste to make sure of its proper disposal.

The onus was on the consumer to take the item to a designated drop off location, mostly municipal depots, or drug stores for pharmaceutical waste. Examples included batteries, leftover medication, unused bottles of bleach or corrosive
toilet bowl cleaners.

Two ministry auditors were in the Stewardship Ontario offices last Friday when the Star met with chief executive officer Gemma Zecchini, who defended the $18.6 million bill.

Zecchini said her organization, which also runs the Blue Box program, spent two years creating the recycling programs for household hazardous waste — as directed by the ministry.

Stewardship Ontario operates on fees paid by its industry members, like Clorox Canada and drug manufacturer Apotex Inc.

It could not charge members’ fees for the new recycling program until it officially began on July 1 and was only in operation a few weeks before the program was put on hold for a review, Zecchini said.

The start-up expenses were paid from a line of credit and now the organization wants its money back, she said.

“I wish we could have had a more fruitful discussion between Stewardship Ontario and the (environment ministry) so they didn’t have to cancel,” Zecchini added.

When the eco fees were quietly added to products last July 1 — the same day the HST began — consumers were outraged at the extra charge on their bill. Fees ranged from pennies to dollars in stores like Home Hardware and Lowes, while some retailers charged nothing. Other stores hid the fees in the overall price of the goods.

It was a gift to opposition parties. They had a heyday, attacking the Liberals for doubling up on taxes with eco fees and the 13 per cent HST.

Within weeks, environment minister John Gerretsen was fired. The tainted program was placed “under review” until October, when the new minister, Wilkinson, announced the eco-fee program was gone.

The bill from Stewardship Ontario to taxpayers includes a charge of $8 to $10 million for research and development of the programs; legal fees; marketing campaigns, and the purchase of a $3 million computer system designed to track an array of household hazardous waste materials through the recycling process.

A separate fee of $8.6 million covers the payments that Stewardship Ontario made to the municipalities that collected recycled materials since the cancellation. The ministry asked Stewardship Ontario to continue managing the collection — now paid by government dollars — until it finds a replacement program.

Before last summer’s eco-fee flop, the provincial government made numerous announcements about its progressive recycling policies, starting with the “phase one” household waste program for paint, solvents and anti-freeze started in
2008. Stewardship Ontario still operates this program.

It pushed forward with plans for a second phase (including used needles medication and fluorescent light tubes) that was supposed to begin on July 1.

The ministry wanted to ramp up recycling, Zecchini said, so it pushed Stewardship Ontario to add a third phase, (bleach, corrosive cleaners and contact cement) at the same time.

It was the eco fees on those additional third phase products that created the uproar, she said. Stewardship Ontario was harshly criticized for not explaining eco fees to consumers, who did not understand why they had to pay them.

“It was counter-intuitive for people to pay a fee for the safe disposal of bleach, when they plan to use up the chemical and throw the empty container in the blue bin,” she said.

If taxpayers are taking a hit, so too are the province’s recycling programs, environmentalists say.

The Toronto Environmental Alliance called the ministry’s decision to start over “throwing out the baby with the bathwater.”

“Yes, there were problems with some of the eco fees,” said spokeswoman Emily Alfred, “but the rest of the program made enormous progress.”

If the ministry doesn’t replace pharmaceutical recycling with another industryfunded program, it will return to the old drop off program for needles and pills in voluntary drug stores – a major set back, said Usman Valiante, an environmental
business consultant.

“We need take this off the taxpayer and get programs that work with the least cost to consumers. That is the challenge for government,” Valiante said.

Rick Smith, executive director of Environmental Defence, sent a letter to the environment minister warning of the need for a new industry-funded program for needles, prescription drugs and natural health products.

“It would be unconscionable to allow waste pharmaceutical and biomedical waste products to enter the waste dream or to be disposed of down the drain and into our drinking water where an existing effective approach for diverting these materials from the environment is readily available,” Smith wrote on March 21.

Stewardship Ontario’s program increased the amount of pharmaceuticals gathered –including biomedical waste, like needles from HIV and chemotherapy patients, Zecchini said.

In another example, Waste Diversion Ontario (another private organization mandated by the government to oversee Stewardship Ontario and other private programs for tires and electronic waste) is now negotiating a single source  contract with the Rechargeable Battery Recycling Corporation Canada (RBRCC).

It is proposing to collect both single use and rechargeable batteries if it gets the contract.

The non-profit battery collection group, which already operates in the United States, Ontario and British Columbia, has faced criticism for the low number of batteries it gathers. It puts voluntary collection boxes in some retail stores.

Zecchini said Stewardship Ontario used the Rechargeable Battery Recycling Corp. last year, but it only collected 71,000 kilograms of its 453,000 kilogram target.

Joe Zenobio, the corporation’s executive director, disputed those numbers, saying his organization didn’t get access to some collection points and “the confusion in the marketplace didn’t help.”

Under pressure from environmental groups to get back on track, the government recently issued a request for proposal to create a replacement program. Environment minister Wilkinson said the new system will have a strong
consumer focus.

“People want to do the right thing,” he said, “but they want to have confidence in
the programs.”

From her office overlooking St. Clair Ave. and Yonge St., Zecchini said last summer’s public relations fiasco didn’t allow a debate over the role consumers play in keeping chemicals out of landfill.

“We’ve lost the dialogue around what it means to be a citizen and participate in an ecologically responsible manner in society.”

As Originally Published: Taxpayers hit with $18 million bill to pay for eco-fee fall-out