Yesterday’s post on Ontario’s eco fees generated quite a few emails and a couple of comments, and I promised to dig a little deeper into Stewardship Ontario. The main questions asked were who is Stewardship Ontario, who collects the money and where does it go. A long Friday night and a bottle of wine later, I have answers.
Who is Stewardship Ontario?
According to their 2009 Annual Report, Stewardship Ontario was incorporated as a ‘corporation witout share capital’ in 2003. All that means is they are a not-for-profit operation regulated by the Ministry of the Environment, but not a government agency.
Stewardship Ontario defines their business as:
Originally established in 2004 to serve as a financing organization mandated under the Waste Diversion Act to raise industry funds to reimburse municipalities for 50% of the costs of Blue Box recycling, Stewardship Ontario has since evolved into a reverse supply chain business. We are responsible for the end-of-life management of several materials including paint, batteries, solvents, oil filters, oil containers, antifreeze, pesticides, fertilizers and pressurized containers. The municipal hazardous and special waste program launched on July 1, 2008. 2009 marked the first full year of operation for that program.
While our financing mandate continues under the shared responsibility model for the recycling of residentially generated printed paper and packaging, our direct end-of-life management responsibilities have led to the acquisition of new competencies and the development of a new strategic direction. We are no longer just in the business of funding sustainability – we are in the business of doing it.
Quick summary, Stewardship Ontario was formed to take money from business and pass it municipalities to ‘support the blue box recycling program’ but has engaged in mission creep since its formation.
Who collects the eco-fees?
The language is slippery, but here is how it works. Stewardship Ontario collects revenue from businesses (‘stewards’) who sell any product on the fee schedule (pdf). The ‘eco-fee’ on a consumer’s receipt goes to the retailer, distributor or manufacturer to offset the levy. While technically the eco-fee goes to the entity that was charged by Stewardship Ontario, in reality there would be no need to charge consumers anything if it were not for the Stewardship Ontario programs.
This is how Stewardship Ontario can claim that eco-fees are not mandatory, but it’s a cynical argument that relies on the belief that businesses will not pass the cost to consumers. Perhaps some businesses don’t, but the furor in the press about the surprise appearance of the fees on customer’s bills tells the true story.
In 2009, Stewardship Ontario collected almost $100 million from Ontario businesses:
Where does the money go?
The chart suggests that Ontario municipalities are indeed double dipping, charging property taxes for garbage collection and collecting funding from Stewardship Ontario. No doubt local authorities would claim the need to raise property taxes if the back-end funds were unavailable, but the result is the same.
Only the way the cash leaves your pocket is different; as a tax payer or as a consumer.
The backlash against yet more fleecing of Ontarians has clearly caught Stewardship Ontario flat-footed, how else to explain the PR disaster now under way from their advice to stewards to ‘hide the fees’ to make ‘consumers none the wiser’?
This business needs to be folded. If municipalities need more cash to fund recycling programs, let them increase taxes and face their voters, stealth taxes are dishonest at best.