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2017-2021
May 1, 2016
Tire Stewardship Program Plan
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Tire Stewardship Manitoba 2017-2021 Program Plan
Organization: Tire Stewardship Manitoba Inc.
Contact: Mr. Brett Eckstein, Executive Director
Address: 1791 Dublin Avenue, Unit B
Winnipeg MB R3H 1A9
Telephone: (204) 661-3242
Toll Free: (866) 724-5002
Fax: (204) 668-9704
E-mail: [email protected]
Website: www.tirestewardshipmb.ca
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Tire Stewardship Manitoba (TSM) is a not-for-profit corporation formed as a Producer
Responsibility Organization (PRO) to represent tire stewards in Manitoba. TSM
assumed responsibility for operating Manitoba’s tire stewardship program after
replacing government’s Tire Stewardship Board (TSB) on April 1, 2008. Manitoba’s tire
stewardship program has successfully integrated steward responsibility for all
designated types of tires and tubes sold in Manitoba, and the collection, recycling and
disposition of discarded tires in all regions of the province.
Through the strong support and effort of over 1500 program stakeholders that include
Manitoba’s tire recyclers, new tire retailers, motor and equipment dealers, generators,
and municipal partners, TSM continues to meet its primary objective to recycle all tires
available for recycling in Manitoba on an annual basis. The program’s two tire recyclers
maintain the capacity and ability to collect and recycle all of Manitoba’s discarded tires
effectively and efficiently. The strong relationship between TSM, recyclers, government
and stakeholders also provides a stable basis for building a sustainable tire stewardship
program.
The collection and processing of over 19,000 tonnes of discarded tires and tubes in
Manitoba creates approximately 70 full-time jobs and over $7 million in direct economic
activity annually. These tires are recycled into aggregate, crumb rubber, blast mats, and
moulded products or as markets require can be exported as a fuel supplement replacing
fossil fuel alternatives. Within the context of this plan, TSM will continue to work with
Manitoba’s tire recyclers to invest in and develop higher value tire-derived products
and create employment within the province.
The 2017-2021 Tire Stewardship Program Plan continues to build upon the significant
accomplishments of the TSM program and focuses on operating an effective, efficient
and sustainable tire stewardship program. Financial projections for the duration of this
plan do not indicate an increase in steward-fees given the assumptions made.
Therefore, without significant change to the existing program proposed, TSM is
applying to the Minister of Conservation and Water Stewardship for its third program
plan approval since 2007, to extend its mandate to December 31, 2021.
Executive Summary
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TSM Program Plan
Mission Statement:
Tire Stewardship Manitoba is a province wide agent of the Manitoba tire industry
committed to protection of the Earth’s environment and promotion of economic
benefit for Manitoba through the sustainable management of all tires and tubes in
Manitoba. (TSM Board of Directors, November 2007)
Tire Stewardship Manitoba’s (TSM) mandate is to implement an approved tire
stewardship program plan substantially in accordance with its intent, consistent with
the requirements of the Waste Reduction and Prevention Act, the Tire Stewardship
Regulation 2006, and the Guideline for Tire Stewardship, as approved and amended. To
fulfill its mandate, TSM will work with Manitoba Conservation and Water Stewardship
and all program stakeholders to achieve the following objectives:
Operate a program that addresses all tires and tubes in Manitoba.
Ensure timely, cost efficient collection of all discarded tires from all parts of the
province without user fees at the point of collection.
Ensure adequate recycling capacity to prevent build-up of backlogs of whole or
partially processed tires.
Promote economically viable end uses and market applications for tires.
TSM is a not-for-profit corporation formed to manage the tire stewardship program on
behalf of the tire industry stewards in Manitoba. TSM had its initial tire stewardship
program plan approved in 2007 and renewed in 2011 in accordance with the Tire
Stewardship Regulation 2006. Without significant change to the existing program
proposed, TSM is applying to the Minister of Conservation and Water Stewardship for
a five-year program plan renewal to extend its mandate to the end of 2021.
Program Plan Elements
Manitoba’s tire stewardship program operated by TSM includes the following main
elements:
Steward-fee based revenue system to make the program financially viable
Varying steward-fees according to tire type to avoid cross-subsidization
TSM collection of steward-fees directly from tire retailers
Collecting and recycling of all discarded tires and tubes
Board governance representing industry stewards
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Governance Model
A volunteer Board governs TSM and is composed of several directors representing the
following Member organizations:
Tire and Rubber Association of Canada
Retail Council of Canada
Western Canada Tire Dealers
Collectively, these organizations represent the international tire manufacturers, major
suppliers, and tire retailers in Manitoba. As of May 1, 2016, the TSM Board members
were:
Glenn Maidment
Tire and Rubber Association of
Canada
David Lamb
Tire and Rubber Association of
Canada
Joe Casciano
Retail Council of Canada
Kendale Penner
Western Canada Tire Dealers
Ken Essex
Western Canada Tire Dealers
Geoff Sine
Member-at-Large
A multi-stakeholder advisory committee also contributes to good governance of TSM
program operations. The committee is composed of representatives of recyclers,
municipalities, industry consumers and the provincial government. As of May 1, 2016,
the TSM Advisory Committee member organizations were:
Manitoba Motor Dealers Association
Association of Manitoba
Municipalities
Keystone Agricultural Producers
Manitoba Trucking Association
Western Equipment Dealers
Association
Reliable Tire Recycling
OTR Recycling
Green Manitoba
Manitoba Eco-Network
TSM is accountable to its stakeholders and the public for the collection, recycling and
environmentally sound disposal of all tires designated under the regulation. Through an
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open and transparent revenue system, TSM collects a steward-fee on the sale of new tires
from the retailer and these fees pay for collecting and recycling Manitoba’s discarded
tires in an environmentally responsible manner. All steward-fees collected are applied
by TSM to the operation and enhancement of Manitoba’s tire stewardship program. TSM
has developed board governance policies and procedures consistent with established
industry standards and is subject to an annual professionally conducted audit.
Consultation and Communication
TSM is committed to a consultation process that allows all interested parties and affected
industry stakeholders an opportunity to provide their valuable input toward the
development of the program plan. TSM’s consultation process involves inviting input
from key target audiences, including industry producers and other affected industries,
community organizations and environmental interest groups, local governments,
consumers and individuals to encourage those interested in responding with their
constructive perspectives and comments.
A summary of TSM’s program plan consultation is included in Appendix B: “What You
Told Us”.
Program Stakeholders
Manitoba Conservation and Water Stewardship
The provincial government requires industry to have an approved tire stewardship plan
according to the Tire Stewardship Regulation 2006, and monitors TSM’s annual
performance. TSM will continue to work with Manitoba Conservation and Water
Stewardship to ensure the achievement of the highest environmental standards and
economic value for Manitoba’s tire stewardship program.
Tire Stewardship Manitoba Inc.
TSM is composed of a board of directors that governs all aspects of the program. The
board conducts regular meetings, makes decisions on program direction, and produces
an annual report to demonstrate the program’s accountability to all stakeholders. TSM
will continue to operate with the goal of achieving exemplary and ongoing improvement
in board governance practices toward building an effective, efficient, sustainable and
well-governed producer responsibility organization.
Advisory Committee
Representatives from generators, collectors, recyclers, industry consumers and local
governments provide advice on program policy and operations. TSM will continue to
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support fully its multi-stakeholder advisory committee to ensure their ongoing
contribution to good governance of TSM program operations.
TSM Management and Administration
Management and Administration carry out the registration of retailers, generators and
recyclers as eligible participants in the program. They also collect steward-fees from
retailers to pay financial incentives to recyclers for the collection and recycling of
discarded tires. Management and Administration also oversee all other aspects of
program delivery and report on performance. TSM operates in accordance with the
highest standards in all relationships with program stakeholders, the environment and
the community. TSM fosters a climate that encourages innovation and diligence amongst
staff. TSM will continue to monitor, with the support of the program’s auditor,
management performance based on compliance with board governance policies,
administrative procedures and operations within the approved budget.
New Tire and Vehicle Sellers
Tire retailers accept tires discarded by consumers and remit steward-fees to TSM. New
vehicle dealers remit steward-fees for each tire included with the new vehicle sale. TSM
will continue to represent and work with new tire and vehicle retailers as contributing
program members and primary ambassadors to the consumer. TSM also will continue to
work with our registered retail members to improve remittance procedures to manage
and reduce program costs while ensuring fairness and a level playing field for all those
selling new tires.
Generators
Generators of discarded tires include transportation companies and auto wreckers that
generate unwanted tires as part of their regular business. Generators that register with
TSM can have their tires collected from their place of business where service is available,
or may take their tires to a registered municipal landfill storage yard at no charge. TSM
will continue to locate all points of discarded tire generation in the province and ensure
they become registered collection points and receive service, at no charge; specific to the
characteristics and needs of the region in which they are located.
Local Governments
Local governments operate registered municipal landfill storage yards that accept
discarded tires from consumers, new tire and vehicle retailers and generators at no
charge. Municipalities receive TSM incentive payments to accept and appropriately store
discarded tires generated in Manitoba. This reduces the risk of fires and environmental
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hazards. TSM and local governments will continue to partner and work together to
ensure tires are stored appropriately, collection is provided as warranted and
unnecessary accumulation is avoided in rural, remote and historically under-serviced
areas of the province.
Collectors
Collectors are the recyclers themselves or haulers who enter into business relationships
with recyclers to pick up discarded tires from retailers and generators for delivery to
recyclers. This service where available is provided at no additional charge to the retailer
or generator. It is TSM’s intention to ensure timely, cost efficient collection of all
discarded tires and tubes from all parts of the province without user fees at the point of
collection.
TSM will also continue to address collection in rural, remote and historically under-
serviced areas through partnerships with local governments and service providers in
order to define service models to the specific characteristics and needs of each region.
Recyclers
Manitoba companies recycle discarded tires for use in tire-derived products or fuel
supplements. They also sell tire-derived products to markets in Canada and
internationally. They submit claims to TSM for collection and recycling incentives. As of
May 1, 2016, there are two recyclers: Reliable Tire Recycling and OTR Recycling.
Clearline Technologies is a registered manufacturer of tire-derived products. It is TSM’s
intention to continue working with recyclers to ensure adequate recycling capacity to
prevent build-up of backlogs of whole or partially processed discarded tires.
Consumers
Consumers purchase new tires from retailers. Most consumers leave their scrap tires
with the retailer for disposal. In addition, they purchase and use recycled tire products.
TSM will continue to operate a program that addresses all tires and tubes and provides
consumers with accessible disposal points at tire retailers and other generators
throughout Manitoba. TSM will continue its partnership with the Tire and Rubber
Association of Canada’s “Be Tire Smart Campaign” www.betiresmart.ca to provide
consumer education materials to extend tire life and reduce the generation of discarded
tires in Manitoba.
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Markets
Various domestic and international Markets purchase tire-derived products from
Manitoba recyclers for end-use, resale, or for further manufacturing into new products.
It is TSM’s intention to continue to promote economically viable end uses and market
applications for discarded tires, and further promote new product and market
opportunities for Manitoba recyclers through the Tire Recycling Innovations Grant. The
grant’s objectives and requirements were developed in consultation with recyclers,
research institutions and other industry and program stakeholders to ensure maximum
value for products derived from tires discarded in Manitoba.
In accordance with the Minister’s Guideline for a Tire Stewardship Program, TSM
subscribes to the following Tire Derived Product (TDP) hierarchy of discarded tire use.
Figure 1: Order of preference for use of discarded tires in Manitoba.
TDP1
TDP 2 TDP 3
TDF
Discarded tires use priority
TDP 1 – Includes operations that reduce tires to a highly processed form, typically to a crumb rubber and powder form for use in producing
new products with recycled rubber content (particle size up to 5/16” to 40 mesh and lower)
TDP 2 – Fabricated products made with at least 75% tire content (e.g. – blasting mats, traffic cone bases, etc.)
TDP 3 – Tire shred with particle size of normally 2 – 4 inches produced as an alternative to granular material
TDF – whole or shredded tires used as tire derived fuel (TDF) to supplement other fuels in industrial applications
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Annual Program Performance Summary
TSM is committed to complying with the following legislative and annual reporting
requirements.
Act and Regulation The Waste Reduction and Prevention Act, CCSM c W40; Tire
Stewardship Regulation, 2006; Guideline for Tire Stewardship 2006-01E.
Products Covered All tires and tubes. See Appendix A for details.
Tire Stewardship Program Plan Submitted May 1, 2016 for Minister’s approval.
ERFORMANCE TARGETS AND MEASURES SPECIFIED
Act and Regulation
Section 16(1) of the Tire Stewardship Regulation states “Within 120 days after the end of
the fiscal year, an operator must provide to the minister an annual report summarizing
the program activities of the operator in the fiscal year and containing audited financial
statements covering the program for the fiscal year.”
Guideline
Performance measures must be able to show both what is recovered and what is not.
May include: sale and recovery data, municipal waste composition study results,
surveys of public awareness, the amount of scrap tires and tubes collected by service
providers, number of collection points, proportion of product to be managed, according
to the principles of pollution prevention and 4Rs hierarchy. Measure, monitor and report
on program performance, including meeting designated material recovery rate targets.
Include total amount of product sold and collected, with recovery rate (or alternative
approach); amount of product collected and processed by region if possible.
Stewardship Plan and Approval Letter
Program to track public awareness (through public engagement, surveys); accessibility
(number of collection points); diversion rates and diversion per capita; consideration of
tire recycling hierarchy.
2014 PROGRAM PERFORMANCE SUMMARY
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INDICATORS
Operational Total material generated
Total material collected
Percent of material recovered
Total material collected per capita
Marketable products as percent of total tonnes of material recovered
Accessibility Population coverage
Percentage of Manitoba residents that have access to a collection site
Number of collection sites
Number of collection events
Number of participating municipalities
Awareness
Percentage of population aware of the Program
Communication efforts undertaken
Financial
Total program cost by volume
Recycling costs per tonne
Administrative costs per tonne
Stewardship Programs cost per tonne
Annual Audited Financial Statements
Operating Model
For every new tire sold in Manitoba a tire will eventually be discarded. Rather than
taking up space in our landfills and posing a risk to human health and the environment,
discarded tires are collected to be recycled into new products in environmentally
responsible ways. To manage discarded tires generated in Manitoba, tire sellers pay TSM
a steward-fee for new tires sold in the province. One hundred percent of fees collected
from stewards go towards the operation of the tire stewardship program.
Properly managed discarded tires reduce environmental risk and create jobs and
economic development in Manitoba. Manitoba’s tire-derived products are sold locally
and internationally. Tires can be used to make flooring products for agricultural,
recreational and industrial use. They are used for synthetic turf fields, rubberized
asphalt, blast mats, geo-technical projects, energy recovery and other applications.
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TSM’s program operating model is based on the requirements outlined in the Regulation
and Minister’s Guideline, as well as the historical, geographic and diverse character of
the province. From large urban centres to rural, remote, northern and First Nations
communities of the province, TSM must work with all stakeholders to ensure collection
and recycling capacity is matched to the province’s longer hauling distances, seasonal
access and relatively low discarded tire volumes compared to other markets in Canada
and North America.
TSM’s operating model is comprised of these two basic elements – Revenue System and
Rate Setting Process:
Revenue System
TSM has successfully implemented a retail-based funding model that is the only point
though the distribution chain that can ensure a level playing field, preserve the financial
integrity of the program, and be fair to all parties. TSM will continue to operate its
revenue system supporting variable rates based on the tire type sold that are remitted by
registered retailers to TSM.
Rate Setting Process
TSM has developed policies for reviewing and setting collection, processing and
steward-fee rates to ensure the efficient, effective and sustainable operation of the tire
stewardship program. TSM’s approved program plan highlighted the need to address
three major rate-setting areas that may require adjustment from time to time: collection
incentives, processing incentives and steward-fees.
Steward-Fees
As the rates are sufficient to cover the entire costs of the program, it is TSM’s intention to
hold steward-fees at their current level for the duration of this proposed program plan,
as much as possible (Appendix A: Tire Stewardship Manitoba Schedule A, Tire
Definitions, Steward Fees and Interest Schedule Effective April 1, 2015). By policy, to
change the steward-fees, a stakeholder consultation and a minimum of a 90-day notice is
required.
Recycling Incentives
Recycling incentives encourage the appropriate storage, collection and processing of
discarded tires, as well as the manufacturing of new recycled tire products in Manitoba
in the following manner:
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The Municipal Scrap Tire Storage Incentive encourages local governments to
appropriately store Manitoba tires at their landfill transfer stations where they are
collected at no charge.
Collection Incentives encourage registered tire recyclers to collect Manitoba tires,
including loading, unloading, hauling and assuming liability for tires in their
possession.
Processing Incentives encourage registered recyclers to reduce whole Manitoba
tires into processed material for end sale or further manufacturing into recycled
tire products.
Manufacturing Incentives encourage registered manufacturers to manufacture a
greater amount of higher-value recycled products in Manitoba using Manitoba
processed material.
Incentives can depend on a variety of factors that recyclers may or may not have control
over. To safeguard against inefficient or poorly managed operations TSM will continue
to benchmark its recycling credits against other provincial tire recycling programs and
out-of-province recyclers to ensure its credits are in-line with comparable programs and
markets. TSM also conducts independent audits to monitor recycler profitability and
compliance.
TSM may adjust any of these four recycling incentives as necessary to ensure the
sustainable, effective and efficient storage, collection, processing and manufacturing of
discarded tires. By policy, TSM will provide 90-day notice to lower incentive rates. TSM
can raise rates immediately if warranted. Disagreements will be referred to the
Mediation and Arbitration Guidelines that form part of TSM’s recycler agreement which
are binding on both parties.
Budget and Rate Review Considerations
Given the assumptions made and based on the steward-fee, collection and processing
rates effective April 1, 2015, TSM financial projections indicate no steward-fee increase is
anticipated for the duration of the 2017-2021 Program Plan. Nevertheless, a 90-day notice
is required to reduce collection and recycling incentive rates. As such, adjusting for
increased volume and revenue, TSM will strictly adhere to the level of compensation for
collection and recycling in the program plan 2017-2021 financial forecast. TSM’s normal
practice is to review steward-fees and the rates of assistance on an annual basis.
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TSM PROGRAM PLAN 2017-2021 FINANCIAL FORECASTING
TSM strives to manage program finances in a manner to ensure efficient, effective and
sustainable program operations and the environmentally responsible recycling of tires.
Although there are many factors that can influence revenue and expenditure forecasting,
TSM has taken steps to manage finances to limit unexpected expenditures as much as
possible. Revenue trends are less predictable as consumer preferences for winter tires,
new car sales and economic growth can change financial outcomes from one year to the
next.
An increase in new tire sales is the most direct cause of an unexpected variance of
predicted revenue, particularly in the passenger/light truck (PLT) tire category. Winter
tire and new car sales can also create a larger gap between revenue and direct
expenditures as most often no scrap tires become available for recycling at the time of
sale. These factors add to the number of tires that are currently on the road, held in
storage for later use or in recyclers’ inventories. The collection and recycling of all tires
and tubes must be included in TSM’s financial planning.
Although the TSM Stabilization Reserve is restricted to managing the organization’s
finances, TSM has twice reduced the steward-fee on PLT tires from $4.50 to $4.00 to $3.75
since 2013 to adjust to market trends and growth in stabilization reserve holdings. Any
further change to steward-fees during the 2017-2021 Program Plan will depend on the
revenue generated and the cost of recycling tires.
TSM revenue also includes investment income generated from the stabilization reserve.
The investment income may add to the stabilization reserve or provide TSM with
revenue to avoid raising steward-fee rates when the revenue generated for specific tire
categories may not match recycling costs for those tires in any given year.
It is TSM’s intention to continue prudent fiscal and program policy measures to maintain
the stabilization reserve equal to annual program revenue as much as possible for the
duration of the 2017-2021 program plan.
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2017-2021 FINANCIAL PROJECTIONS
Financial Forecast Assumptions and Notes
1. TSM 2017-2021 Financial Projections based on TSM’s approved FY 2016 Budget.
2. Revenue estimates for FY 2017 to FY 2021 based on growth equal to 2% per year and TSM
Steward Fee Schedule A effective April 1, 2015.
3. Expenditure estimates for FY 2017 to FY 2021 based on growth equal to 1% per year and
TSM Recycling Incentives effective July 1, 2015.
4. TSM stabilization reserve results from an excess of revenues over expenditures from the
program’s contingency budget. TSM has restricted the reserve to manage the
organization’s finances. The amount, up to one-year’s revenue equivalent, is subject to
change at the discretion of the Board of Directors.
5. Forecast numbers may differ slightly due to rounding.
FY2017 FY2018 FY2019 FY2020 FY2021
TOTAL REVENUE 6,461,200$ 6,590,424$ 6,722,232$ 6,856,677$ 6,993,811$
TOTAL EXPENDITURES 6,718,000$ 6,785,180$ 6,853,032$ 6,921,562$ 6,990,778$
EXCESS OF REVENUE OVER EXPENDITURE (256,800)$ (194,756)$ (130,799)$ (64,885)$ 3,033$
RESERVE BEGINNING OF YEAR 6,199,644$ 5,942,844$ 5,748,088$ 5,617,289$ 5,552,404$
RESERVE END OF YEAR 5,942,844$ 5,748,088$ 5,617,289$ 5,552,404$ 5,555,437$
Appendix A, Tire Stewardship Manitoba Schedule A, Tire Definitions, Steward Fees and Interest Schedule Effective April 1, 2015
SECTION I: TIRE PRODUCT CATEGORIES INCLUDED (Steward Fee applicable)
Tire Type STEWARD FEE Definition
Passenger Tires, Small RV Tires and Light Truck Tires
Motorcycle, Golf Cart and All Terrain Vehicle Tires
Forklift, Small Utility and Bobcat/Skid Steer Tires 16.5” and under
$3.75 +
GST & PST
Passenger tires are designed for use on passenger cars, light trucks, small RVs and multipurpose passenger vehicles (MPVs), including sport utility vehicles (SUVs) and crossover utility vehicles (CUV's), and to comply with Canadian Motor Vehicle Safety Standard (CMVSS No. 109, 139).
The light truck tire category is tires designed for use on consumer or commercial light trucks, under 10,000 lbs. Gross Vehicle Weight, and comply with Canadian Motor Vehicle Safety Standard (CMVSS No. 119).
Codes found on the sidewall of light passenger and light truck tires are P (Passenger) and LT (Light Truck). Temporary spare tires are marked T (Temporary).
Includes all tires specifically designed for on/off highway motorcycles, motorcycle sidecars, motor bikes, mopeds, mini-cycles, golf carts and all terrain vehicles.
Includes pneumatic forklift tires, press-on solid tires, Bobcat/Skid Steer tires measuring 16.5” and under, as well as RV Trailer and utility trailer tires marked ST (Special Trailer).
Medium Truck Tires Rim Diameters from 15” to 24.5”
Wide Base Skid Steer and Loader Tires 17.5” rim and up
$9.00 +
GST & PST
Also commonly known as Commercial Truck Tires – Truck and Bus tires including Wide Base or Heavy Truck tires designed for truck/bus applications and Larger RV tires not marked "P or LT”. All of which comply with Canadian Motor Vehicle Safety Standard (CMVSS No. 119).
FARM / AG TIRES
Free Rolling and Implement Rears 24” rim & under Rears 25” rim & over
$3.75 + GST & PST
$9.00 +
GST & PST
$30.00 + GST & PST
Includes free rolling farm and implement tires deemed for use on farm equipment. Tires are usually identified with the sidewall marking “IMP” Rears are designated with one of the following sidewall markings:
R-1/R-1W/R-2/R-3/R-4/HF1/HF2/HF3/HF4
Tire Type STEWARD FEE Definition
Small Off-the-Road
$60.00 + GST & PST
Includes OTR Mining, Earthmover, Construction, Grader, Industrial and Aircraft tires up to and including size 23.5 – 25 tires
Includes all Forestry (Skidder) Tires
Large Off-the-Road
$135.00 + GST & PST
Includes OTR Mining, Earthmover, Construction, Forestry, Industrial, Aircraft and other off-highway or on/off highway tires over size 23.5 – 25
For the purpose of determining eligible tire sizes within the tire type category, TSM will deem the following reference material as the reference authority - 2007 Tire and Rim Handbook of the Tire & Rim Association of the United States as amended from time to time.
THE STEWARD FEE IS A SUPPLY OF A TAXABLE SERVICE. TIRES SUPPLIED FOR USE ON FIRE TRUCKS AND AMBULANCES AND TIRES SUPPLIED TO FIRST NATIONS ARE NOT EXCLUDED FROM THE STEWARD FEE. Qualifying equipment and users may be eligible for GST & PST exemptions on the Steward Fee.
SECTION II: TIRE PRODUCT CATEGORIES EXCLUDED (Steward Fee not applicable)
The Tire Stewardship Regulation 2006 excludes tires not designed for powered vehicles (except for trailer tires which are designed to be towed by such a vehicle). Some examples of tires excluded from a steward fee are:
Tires designed for use on bicycles or wheelchairs;
Tires designed for use on a device designed to be moved by human power such as a wheelbarrow;
Tires purchased for use on motorized mobility aids designed for the transportation of persons with a physical impairment (seller must retain a copy of the sales invoice that certifies this use and includes the name, address, telephone number and signature of the purchaser);
Tubes that are manufactured for use inside a tire whether supplied with a tire or separately. Tubes will be managed by the program as part of a tire;
Tires that ordinarily have a retail value of less than $30.00. These tires will be managed by the program;
Recapped and retreaded tires;
Registered retailers who acquire new tires solely for the purpose of resale, provided they quote their TSM registration number to the retailer from whom they purchase the tire. However, if the tire is subsequently taken out of resale inventory and used for any business or personal use, retailers must remit the applicable Steward Fee; and
Retailers who ship to a non-resident to a location outside of the province. The retailer is required to retain documentation relating to the out-of-province delivery to substantiate non-remittance of the Steward Fee for that sale.
SECTION III: INTEREST
Interest charges will be applied at a rate of 1% per month (12.6825% annually) compounded monthly and calculated from the date the interest became payable.
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May 1, 2016
APPENDIX B:
“What You Told Us”
A summary of stakeholder responses to TSM consultation survey
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TSM Program Plan 2017-2021 Stakeholder Consultation “What You Told Us”
TSM is committed to a consultation process that allows all interested parties and affected industry stakeholders an opportunity to provide their valuable input toward the development of the 2017-2021 program plan. TSM’s consultation process involves inviting input from key target audiences, including industry producers and other affected industries, community organizations and environmental interest groups, local governments, consumers and individuals to encourage those interested in responding with their constructive perspectives and comments.
To facilitate this consultation process, members of TSM’s Stakeholder Advisory Committee comprised of representatives from generators, collectors, recyclers, industry consumers, environmental organizations, post-secondary institutions, local governments who provide ongoing advice on program policy and operations were presented a draft program plan consultation survey through a consultation meeting and provided assistance in developing the consultation process.
All registered TSM retailers and generators were provided the opportunity to comment on the Program Plan Survey that was posted on the TSM website at www.tirestewardshipmb.ca through our website survey and comment field. Consumers and the general public were notified to comment through point-of-sale information and a media release to local newspapers (Appendix I).
All Stakeholder groups, including the Advisory Committee, were notified of TSM’s application to renew our program plan and provided sufficient opportunity for their organizations to engage in consultation with their membership for both individual comment and formal response from their respective organizations. This public consultation period ran from January 28, 2016 to March 4, 2016.
In general, stakeholders commented on the stewardship program’s direction and renewal. Comments that were received by TSM from individual tire dealers, municipalities, tire recyclers, and groups or organizations representing local governments, industry, and environmental advocacy are replied to by TSM addressing specific concerns raised by individual stakeholders. All individual/stakeholder organization comments received and TSM replies are provided here in this “What You Told Us” and are sent to the Minister of Conservation and Water Stewardship when TSM submits its application for program plan renewal. TSM would like to thank all program stakeholders who participated and took the time to complete this Consultation Workbook Survey to provide their comments. What follows is the TSM Consultation Workbook that was provided to program stakeholders on the TSM website, Workbook survey results, TSM’s response to the survey results and comments from 42 respondents (Appendix II), TSM survey respondent reply letters (Appendix III) and 1 written submission (Appendix IV).
(Note: For ease of reference and to retain the integrity of each survey question asked, TSM’s response to survey results, stakeholder comments and written submission(s) are provided in each section and may be duplicated where stakeholder comments were similar or repeated from section to section.)
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Tire Stewardship Program Plan 2017-2021
1. Consultation Workbook Sign-In
Organization:
Contact Name:
Address:
Telephone:
E-mail:
Website:
You may sign-in to view consultation documents and answer the Workbook questions, and/or send written hard copy submissions to:
Mr. Brett Eckstein, Executive Director Tire Stewardship Manitoba Inc. 1791 Dublin Avenue, Unit B, Winnipeg MB R3H 1A9 204-661-3242 [email protected] www.tirestewardshipmb.ca
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Welcome to the TSM Stakeholder Consultation Workbook
TSM, a non-profit Producer Responsibility Organization (PRO) representing Manitoba’s new tire industry, is seeking a five-year program plan renewal extended to December 31, 2021. TSM recycles all tires and tubes available for recycling in Manitoba annually with the support of tire recyclers, new tire sellers, motor and equipment dealers, municipal partners and other scrap tire generators.
TSM’s financial projections remain positive and the program is not anticipating an increase in eco fees charged to tire sellers for the duration of the proposed plan. The goal of the Plan is to continue building upon the significant accomplishments of the TSM program and focus on operating an effective, efficient and sustainable tire stewardship program.
Your thoughtful consideration of the consultation document and reference material provided will assist TSM in preparing a new Plan for submission to government. TSM will collect and forward to government participants names, their comments and survey results in a “What You Told Us” document when it prepares and submits its 2017-2021 Stewardship Program Plan by May 1, 2016.
Current Approved Plan/TSM Annual Reports
You can start your submission by reviewing the current approved Tire Stewardship Program Plan 2012-2016 and TSM Annual Reports below, or if you are already familiar with the TSM program and how it operates click the Next button below to skip ahead:
TSM Tire Stewardship Program Plan 2012-2016 http://greenmanitoba.ca/umedia/program_plans/tsm_program_plan_2012-2016_april_27_2011_final.pdf TSM Annual Report 2014 http://www.tirestewardshipmb.ca/wp-content/uploads/tsm_annual_report_2014-web.pdf TSM Annual Report 2013 http://www.tirestewardshipmb.ca/wp-content/uploads/tsm_annual_report_2013_web.pdf TSM Annual Report 2012 http://www.tirestewardshipmb.ca/wp-content/uploads/15981_tsm_annual_report_2012_final_lores.pdf TSM Annual Report 2011 http://www.tirestewardshipmb.ca/wp-content/uploads/TSM-2011annualreport_fin_NEW_WEB.pdf TSM Annual Report 2010 http://www.tirestewardshipmb.ca/wp-content/uploads/TSM-2010annualreport_final_WEB1.pdf TSM Annual Report 2009 http://www.tirestewardshipmb.ca/wp/wp-content/uploads/tsm-2009annualreport_web_s.pdf TSM Annual Report 2008 http://www.tirestewardshipmb.ca/wp/wp-content/uploads/tsm_2008_annual_report.pdf
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Section One: TSM Program Governance
TSM’s mandate is to implement an approved tire stewardship program plan consistent with the requirements of: The Waste Reduction and Prevention (WRAP) Act found here: https://web2.gov.mb.ca/laws/statutes/ccsm/w040e.php The Tire Stewardship Regulation 2006 found here: http://web2.gov.mb.ca/laws/regs/current/_pdf-regs.php?reg=222/2006 The Guideline for Tire Stewardship found here: http://www.tirestewardshipmb.ca/wp-content/uploads/guideline_for_tire_stewardship_2006-01e1.pdf Minister’s Stewardship Plan Approval Letter found here: http://tirestewardshipmb.ca/wp-content/uploads/2012-2016_TSM_Program_Plan_Approval_Letter.pdf
TSM Mission Statement:
Tire Stewardship Manitoba is a province wide agent of the Manitoba tire industry committed to protection of the Earth’s environment and promotion of economic benefit for Manitoba through the sustainable management of all tires and tubes in Manitoba. (TSM Board of Directors, November 2007)
TSM Program Objectives
The TSM program will:
• Operate a program that addresses all tires and tubes sold in MB; • Ensure timely, cost efficient collection of all discarded tires and tubes from all parts of the province without user fees at the point of collection; • Ensure adequate recycling capacity to prevent build-up of backlogs of whole or partially processed tires and tubes; and • Promote economically viable end uses and market applications for tires and tubes.
TSM Program Plan Elements
Main elements of the TSM plan include:
• Financially viable eco fee based program revenue system; • Varying eco fees by tire type to avoid cross-subsidization; • TSM collection of eco fees directly from tire sellers; • Collecting and recycling of all discarded tires and tubes; and • Board governance representing industry stewards.
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TSM Governance Model
The governance model consists of a volunteer Board that governs TSM and is comprised of several directors representing its Member organizations. Collectively, these organizations represent the international tire manufacturers, major suppliers, and tire retailers in Manitoba.
The model also includes a multi-stakeholder advisory committee that contributes to good governance of TSM program operations. The committee is composed of representatives from generators, collectors, recyclers, industry consumers, local governments, environmental groups and post-secondary institutions and the provincial government.
Question and Comment
TSM’s Mission Statement, Program Objectives and Program Plan Elements are required to carry out TSM’s legislated mandate. TSM’s Governance Model was developed to respect product stewards’ responsibility and recognize the significant role stakeholders play in the ongoing operation of Manitoba’s tire recycling program.
2. Do you agree that the tire recycling program operated by TSM represents and respects the various program stakeholders and their interests?
Answer Options Response Percent Response Count
Strongly Agree? 52.8% 19 Agree somewhat? 33.3% 12 Disagree somewhat? 0.0% 0 Strongly Disagree? 5.6% 2 No Opinion 8.3% 3
answered question 36 skipped question 6
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3. Comments:
Do you agree that the tire recycling program operated by TSM represents and respects the various program stakeholders and their interests?
Strongly Agree?
Agree somewhat?
Disagree somewhat?
Strongly Disagree?
No Opinion
i. I feel that Landfills are required to store, handle, and clear areas for tires. The revenue generated does not cover the cost of maintaining the area.
ii. As an operator of a waste site the program has lived up to its mandate iii. We have to place many many many calls to have our tires picked up. They say they'll come but don't, they don't answer, they say
they'll come "so sorry" but don't, over and over again. iv. It will only work properly if tires and tubes are collected from tire retailers in a timely manner v. Scrap tires are collected in a designated area at the City of Thompson's landfill to be loaded onto semi trailers and shipped to
processing facilities. There are no issues or concerns, this seems to working great! Thanks
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TSM Response to Stakeholders’ Survey Results, Comments and Written Submission(s) Regarding Section One: TSM Program Governance
86.1% of survey respondents were mostly satisfied and agreed that the tire recycling program operated by TSM represents and respects the various program stakeholders and their interests. TSM is a not-for-profit Producer Responsibility Organization (PRO) and collects fees from stewards on the sale of all new tires in Manitoba ensuring that those who generate scrap tires have their tires collected and recycled in an environmentally and fiscally responsible manner.
In accordance with its approved program plan, TSM continues to meet its financial targets while responsibly managing all tires that are available for recycling. TSM’s main goal is to provide Manitobans with a comprehensive, sustainable, effective and efficient tire recycling program. Following some improvements made by TSM and processors to the collection system, there were virtually no complaints in 2015 to TSM about scrap tire collection/stockpiles or that scrap tires are not being managed responsibly. In this regard, TSM is compliant with fulfilling its obligations under The Tire Stewardship Regulation (2006); Minister’s Guideline and approved Tire Stewardship Program Plan that provides for the recycling of all tires available for recycling on an annual basis.
Many of the specific issues raised by stakeholders regarding TSM managing stakeholder interests were discussed thoroughly during both government and tire industry consultations with program stakeholders beginning in 2004 through the introduction of the current regulation in 2006 and the approval of the TSM program plan in 2007 and its 2011 renewal. The TSM Board is composed of organizations which represent tire manufacturers and the importer/sellers who in order to legally sell tires in Manitoba pay steward-fees to TSM to operate an approved tire recycling program on their behalf. Consumers, while they are an important sector of the tire market, are not Stewards under the regulation and TSM’s approved Program Plan.
The steward-fee is a supply of a service by TSM to the tire seller. The tire seller is responsible for the tires they introduce into the market and remit the steward-fees to TSM. This creates a level playing field to ensure those who import or sell tires in Manitoba contribute to the funding of the program.
Tire Stewards in Manitoba are represented by their respective regional or national organizations who nominate individuals to serve on the board of directors, in accordance with TSM’s corporate by-laws. These same organizations may also nominate individuals to serve on any other tire recycling program board to which they are members in other provinces. TSM places no residency restrictions on a director’s credentials to serve.
TSM created a voluntary Advisory Committee by invitation for other stakeholders to source information and provide advice on policy. TSM may seek advice or information from any individual, stakeholder group or government and any individual, stakeholder group or government may provide TSM with advice or information. TSM places no restrictions on any advisory committee member credentials to serve.
Consumer groups, recyclers and other interests are represented on the stakeholder advisory committee that can provide advice to TSM for establishing fees and the operating model. These groups do not participate on the TSM board to avoid their specific or special interests conflicting with the broader responsibility for decision-making to set fees or operate the program.
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Section Two: TSM Market and Product Development
Over 1.2 million discarded tires and tubes equaling 15,500 tonnes of material are recycled annually in Manitoba and sold as aggregate, crumb rubber, blast mats, and manufactured products or exported as a fuel supplement. TSM’s support of the tire recycling industry creates approximately 70 full-time jobs and $7 million in direct economic activity annually. TSM promotes economically viable end uses and market applications, through:
• Program processing and manufacturing incentives; • Tire Recycling Innovations Grant (TRIG) to promote new product and market opportunities for Manitoba recyclers; and • Community Demonstration Grant (CDG) for communities and not-for-profit organizations to support local projects that use Manitoba recycled tire
products. TSM Product Markets 2010-2014
Year TDP1 Crumb/
Manufactured
TDP2 Fabricated
TDP 3 Tire-Derived Aggregate
(TDA)
Tire-Derived Fuel (TDF)
Manitoba Export to USA
2014 7% 29% 64% 0% 0%
2013 5% 19% 75% 0% 1%
2012 5% 21% 72% 0% 2%
2011 6% 15% 76% 0% 3%
2010 3% 18% 75% 0% 4%
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Question and Comment
TSM is responsible for establishing Market Development incentives that ensure the recycling of all Manitoba generated tires and tubes. Although TSM is able to recycle all tires and tubes available for recycling annually the markets for most products remain fragile and underdeveloped. TSM is working with government and other stakeholders to support the purchase of, and advocacy for Manitoba’s tire-derived products.
4. Do you agree that TSM’s Market Development approach is on the right path to effectively recycle all tires generated while strengthening markets for higher-value products in Manitoba?
Answer Options Response Percent Response Count
Strongly Agree? 50.0% 17 Agree somewhat? 35.3% 12 Disagree somewhat? 5.9% 2 Strongly Disagree? 0.0% 0 No Opinion 8.8% 3
answered question 34 skipped question 8
5. Comments:
i. This (2015) is the first year that our tires were picked up when we called. There has to be a market for the product or everybody gets backed up. This causes extra cost maintaining and clearing areas for the tires.
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TSM Response to Stakeholders’ Survey Results, Comments and Written Submission(s) Regarding Section Two: TSM Market and Product Development
85.5% of survey respondents were mostly satisfied and agreed that TSM’s Market Development approach is on the right path to effectively recycle all tires generated while strengthening markets for higher-value products in Manitoba. TSM can agree with the stakeholder’s comments that there is a marked improvement in scrap tire collections, as we achieved a record 19,242 tonnes of material for a 91% diversion rate with zero generator complaints registered with the TSM office.
TSM also agrees with the stakeholder comments and their rationale for building stronger markets. This is why TSM is working with government and other stakeholders to support the purchase of, and advocacy for Manitoba’s tire-derived products and strengthen fragile and underdeveloped markets.
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Section Three: Program Performance Indicators
TSM is committed to complying with all annual reporting requirements, set out by regulation and guideline. In addition to an annual report on program activities and audited financial statements, the following key indicators are used to report on program performance:
TSM Key Performance Indicators Indicator Operational Total material generated
Total material collected Percent of material recovered Total material collected per capita
Accessibility Population coverage Number of collection sites Number of collection events Number of participating municipalities
Awareness Percent of population aware of the program Communication efforts undertaken
Financial Total program cost by volume Operational costs per tonne Administrative costs per tonne Stewardship programs cost per tonne
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Question and Comment
TSM is committed to complying with all annual reporting requirements, set out by regulation and guideline.
6. Do you agree that the Key Indicators required by government are sufficient to report on the annual performance of Manitoba’s tire recycling program?
Answer Options Response Percent Response Count
Strongly Agree? 48.4% 15 Agree somewhat? 38.7% 12 Disagree somewhat? 3.2% 1 Strongly Disagree? 0.0% 0 No Opinion 9.7% 3
answered question 31 skipped question 11
7. Comments:
Do you agree that the Key Indicators required by government are sufficient to report on the annual performance of Manitoba’s tire recycling program?
Strongly Agree?Agree somewhat?Disagree somewhat?Strongly Disagree?No Opinion
i. The collection sites should be able to post their inventories as up until last year the amount picked up per year was less than the amount taken in.
ii. Operational, Admin, and Stewardship financials should also include gross calculations (cost) per dept AS WELL as cost per tonne. iii. To me it seems to cover all bases iv. It does not take into account unserviced areas and municipalities.
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TSM Response to Stakeholders’ Survey Results, Comments and Written Submission(s) Regarding Section Three: TSM Program Performance Indicators
87.1% of survey respondents were mostly satisfied and agreed that the Key Indicators required by government are sufficient to report on the annual performance of Manitoba’s tire recycling program.
The Municipal Scrap Tire Storage Incentive is paid to registered municipal landfill operators to collect and appropriately store tires on behalf of their residents. The incentive was never intended to cover the entire cost of storage, but to provide further encouragement to municipalities to engage in the voluntary program. Additional benefits such as the avoided cost to municipalities if they were to landfill tires, as well as the free removal of tires by TSM must also be considered. Scrap tire collection sites are to first contact TSM registered collectors to accurately report their tire inventories and request a pick-up, as stated in our policies and procedures documents. TSM tested an online inventory system that fell into disuse due to lack of generator interest.
Stakeholders have provided comments that there is a marked improvement in scrap tire collections as Manitobans achieved a record 19,242 Tonnes of material (14.8 kg per capita) for a 91% diversion rate with zero generator complaints registered with the TSM office in 2015. TSM continues to seek improvements to the collection system to reach rural, remote and historically underserviced areas of the province. In 2015, TSM was also able to remove over 1400 scrap tires from the northern community of St. Theresa Point via ice-road. TSM’s intent is to expand this service in the coming years to other northern remote communities with limited transportation access.
It should be noted that program expenses have risen and fallen in a number of areas at different rates of increase and decline over the course of eight years to meet Program Plan performance objectives set out by the Minister’s Guideline for Tire Stewardship. Revenue has also grown as the number of tires sold and scrap tire volume continues to increase at varying rates. The revenue from steward-fees has increased due to an increase in volume, not an increase in the actual fee. As such, TSM has increased tire recycling fees charged to stewards for large agricultural tires and small and large off-the-road tires on one occasion, lowered the passenger light truck tire fee on two occasions and maintained the medium truck tire fee at the same rate since the program’s inception, to better reflect the cost of recycling these tires and generate sufficient revenue to manage program finances.
Expenditures have risen as the program has grown and matured to meet its objectives. Many of these costs had been budgeted lower in the early days of the program, as the emphasis was developing basic program administration. Later budgets began to grow to emphasize market development, community projects, public education and enhance corporate expertise. As TSM’s program has matured costs have begun to stabilize.
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Section Four: TSM Operating Model
TSM’s program operating model is based on the requirements outlined in the Regulation and Minister’s Guideline; and the historical, geographic and diverse character of the province. It is comprised of these two basic elements – a Revenue System; and a Rate Setting Process. Revenue System - Retail-based funding model to ensure a level playing field, preserve the financial integrity of the program, and be fair to all parties; and variable rates based on the tire type sold that are remitted by registered retailers to TSM. Rate Setting Process - TSM has developed policies for reviewing and setting collection, recycling and eco-fee rates to ensure the efficient, effective and sustainable operation of the tire stewardship program. Three major rate-setting areas that may require adjustment from time to time are: transportation credits, recycling credits and the retail Eco Fee. Eco-Fees As the rates are sufficient to cover the entire costs of the program, it is TSM’s intention to hold these fees charged to new tire sellers at their current level for the duration of this proposed program plan, as much as possible. Transportation Incentives The transportation incentives were initially set using the national survey of transportation costs conducted by Transport Canada as a baseline. TSM will make adjustments as necessary to ensure sustainable, effective and efficient collection of discarded tires. TSM also conducts independent sustainability audits to monitor collector profitability. Recycling Incentives Recycling incentives are dependent on a variety of factors that recyclers may or may not have control over. To safeguard against inefficient or poorly managed operations TSM will continue to benchmark its recycling credits against other provincial tire recycling programs to ensure its credits are in-line with comparable programs elsewhere. TSM also conducts independent sustainability audits to monitor processor profitability Budget and Rate Review Considerations Based on the eco-fee, collection and recycling rates effective April 1, 2015, TSM financial projections remain positive through to the end of this proposed business plan. Given the assumptions made, no eco-fee increase is anticipated for the duration of the 2017-2021 Program Plan. TSM’s normal practice is to review eco-fees and the rates of assistance on an annual basis.
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Question and Comment
TSM’s program operating model is based on legislated, stakeholder and region specific requirements.
8. Do you agree that TSM’s Operating Model preserves the financial integrity of the program and is fair to all parties?
Answer Options Response Percent Response Count
Strongly Agree? 43.3% 13 Agree somewhat? 40.0% 12 Disagree somewhat? 10.0% 3 Strongly Disagree? 3.3% 1 No Opinion 3.3% 1
answered question 30 skipped question 12
Do you agree that TSM’s Operating Model preserves the financial integrity of the program and is fair to all parties?
Strongly Agree?Agree somewhat?Disagree somewhat?Strongly Disagree?No Opinion
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9. Comments:
i. The revenue generated to a landfill by the sale of the tire does not cover the cost of maintaining the stacks of tires and keeping the area clear.
ii. Because of the low cost of oil recently (and future projections), shouldn't the transportation incentive reflect a lower operating expense? And if so, shouldn't the fees be reduced accordingly?
iii. It is important that we can keep the rates at least the same preferably lower. iv. I believe when it comes to the handling of any waste, fees are a necessity. The fact that TSM is able to operate without an increase in
fees is a credit to the program v. Difficult to charge a tax on particular tires that you won't then pick up.
vi. How about paying us for collecting the fees, since your letter says it created over 70 fulltime jobs, what about us as for collecting the fees for you! The Tire stewardship does not even supply a envelop or $1.00 stamp, It's just costing me money!!!
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TSM Response to Stakeholders’ Survey Results, Comments and Written Submission(s) Regarding Section Four: TSM Operating Model
80.3% of survey respondents were mostly satisfied and agreed that TSM’s Operating Model preserves the financial integrity of the program and is fair to all parties.
In 2015, TSM received zero complaints from the 1501 registered collection sites regarding scrap tire collection services. TSM does not tender for transportation services as the collection incentives paid cover program elements transportation companies do not necessarily provide. TSM originally paid a single incentive that the processor did not receive until the tire was collected, processed and sold. TSM split the incentive into two parts to provide processors with cashflow and reward them for collecting the tire and assuming liability for it. Processors are also paid an additional incentive when they process and sell the recycled product.
The collection incentive is provided to assist processors with collecting tires. This function includes loading and unloading, hauling and assuming ownership of the tires and the aforementioned liabilities that ensue. Processors are free to tender the transportation component of their operations, and routinely use private haulers and local labour to load where it is cost effective to do so.
Although TSM looks at transportation rates among other elements it is not the sole factor in determining the collection incentive. This is not a fee for transportation service but an incentive for collection that is Goods and Services Tax (GST) exempt. To consider a change in this model to a fee for service would expose TSM to paying an additional 5% for tire collection, and potentially change Canada Revenue Agency’s view on the processing incentive as well. This would not be a wise program management decision that could potentially cost the program hundreds of thousands of dollars in additional administration and recycling expense.
TSM sets incentives for processing by benchmarking and comparing to other programs across Canada and our nearest tire recyclers, as well as conducting sustainability audits of processors. TSM does use a professional accounting firm to conduct both sustainability and compliance audits that are in accordance with generally accepted accounting principles. However, as TSM has separate contractual relationships with individual processors, TSM is not able to disclose more detailed information regarding these audits.
With the drop in world oil and local fuel prices, TSM has also reduced its transportation fuel surcharge to zero. The low cost of oil has also impacted the recycled rubber markets as some products are now cheaper to make from virgin, rather than recycled sources.
The Municipal Scrap Tire Storage Incentive is paid to registered municipal landfill operators to collect and appropriately store tires on behalf of their residents. The incentive was never intended to cover the entire cost of storage, but to provide further encouragement to municipalities to engage in the voluntary program. Additional benefits such as the avoided cost to municipalities if they were to landfill tires, as well as the free removal of tires by TSM must also be considered.
Scrap tire collection sites are to first contact TSM registered collectors to accurately report their tire inventories and request a pick-up, as stated in our policies and procedures documents. TSM tested an online inventory system that fell into disuse due to lack of generator interest.
The steward-fee is a supply of a service by TSM to the tire seller. The tire seller is responsible for the tires they introduce into the market and remit the steward-fees to TSM. This creates a level playing field to ensure those who import or sell tires in Manitoba contribute to the funding of the program.
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Section Five: TSM 2017-2021 FINANCIAL FORECASTING
TSM manages program finances in a manner that ensures efficient, effective and sustainable program operations and the environmentally responsible recycling of tires; and limits unexpected expenditures as much as possible. Revenue and discarded tire trends are becoming less predictable through the trends in winter tire and new car sales as well as economic growth that can change financial outcomes from one year to the next. The stabilization reserve of one year’s revenue is restricted to liabilities for tires currently on the road. TSM has twice reduced the eco fee on passenger/light truck tires (from $4.50 to $4.00 to $3.75) since 2013 to adjust to market trends and growth in stabilization reserve holdings. Any further change to eco fees during the 2017-2021 Program Plan will ultimately depend on the revenue generated and the annual cost of recycling tires and tubes. It is TSM’s intention to continue prudent fiscal and program policy measures to maintain the stabilization reserve equal to annual program revenue as much as possible for the duration of the 2017-2021 program plan. Question and Comment TSM’s financial objectives are to manage program finances in a manner that responsibly operates the tire recycling program; limit unexpected expenditures through prudent fiscal and program policy measures; and maintain the stabilization reserve equal to annual program revenue.
10. Do you agree that TSM maintain the financial stabilization reserve to address future liabilities without increasing eco fees?
Answer Options Response Percent Response Count
Strongly Agree? 66.7% 20 Agree somewhat? 13.3% 4 Disagree somewhat? 6.7% 2 Strongly Disagree? 0.0% 0 No Opinion 13.3% 4
answered question 30 skipped question 12
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11. Comments:
Do you agree that TSM maintain the financial stabilization reserve to address future liabilities without increasing eco fees?
Strongly Agree?
Agree somewhat?
Disagree somewhat?
Strongly Disagree?
No Opinion
i. Not sure it's necessary to have a LARGE reserve fund. How long has the stewardship had a reserve, and how much? ii. Nobody likes surprises. I believe in maintaining a reserve so nobody gets hit with one of unforeseen costs.
iii. We have to place many many many calls to have our tires picked up. They say they'll come but don't, they don't answer, they say they'll come "so sorry" but don't, over and over again. It might be a good idea to use more of the money to pick up the used tires more often.
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TSM Response to Stakeholders’ Survey Results, Comments and Written Submission(s) Regarding Section Five: TSM Financial Forecasting
80% of survey respondents were mostly satisfied and agreed that TSM maintain the financial stabilization reserve to address future liabilities without increasing eco fees.
TSM revenue may increase year over year as more tires are sold more revenue is generated. Most years, fewer tires are recycled than are sold resulting in a surplus of funds. The funds are placed in the TSM Stabilization Reserve that is restricted to meet the financial obligations of the organization. Government restricts the reserve to equal one year of TSM program revenue.
The Reserve has grown over the last several years for two important factors: winter tires and new vehicle sales have increased revenue, with no material offsetting scrap tire cost. Sooner or later these tires will be scrapped and the fees TSM collects and held in the reserve over the last few years will be needed.
For 2015 TSM had reduced its reserve by $1.4 million to meet program obligations. TSM conducted a sustainability audit of its processors, which concluded they were not investing sufficiently in their capital equipment. The audit suggested TSM may need to provide increased collection and processing credits to keep them sustainable. TSM has yet to pay for $1.31 million in processor held scrap tire and product inventory, and has also forecasted a $300,000 operating deficit and drawdown on the reserve in 2016.
Excluding the $3.75 fee on passenger/light truck (PLT) category tires, the reduction of any other fee specific to any given tire type to manage the Stabilization Reserve doesn’t support the findings of the program’s analysis of the cost of recycling all tires in Manitoba, that shows the cost of recycling these tires is not less than the applicable fee. The reserve was funded by PLT category tire fees alone and further reductions first would be applied to PLT fees to be fair, more accurately reflect the cost of recycling each tire type and bring stability to the province-wide tire recycling program operated by TSM.
The recycling fees for some tire types are the same in some provinces, lower in a few and are much higher in other provinces because the enabling program mandates are different. For example, rates can be similar because the mandates of some programs allow for the gradual reduction of cross-subsidization by tire type and for harmonization between programs where appropriate. In other programs the revenue system is adjusted annually to eliminate cross-subsidization of tire types entirely, which can often result in much higher rates for some tires than in Manitoba. Given the flexibility in rate setting provided in Manitoba, TSM has been fair to all stakeholders in managing the tire stewardship program and has shown it will lower steward fee rates when conditions warrant.
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Section Six: Plan Summary and General Comment
TSM as a non-profit Producer Responsibility Organization (PRO) is seeking a five-year program plan renewal extended to December 31, 2021. TSM recycles all tires and tubes available annually and is supported by tire recyclers, new tire sellers, motor and equipment dealers, municipal partners and other scrap tire generators. TSM’s financial projections remain positive for the duration of the proposed plan and no increase in eco fees charged is anticipated. After reviewing the consultation documents and answering Workbook questions you may provide additional comments below:
12. Comments:
i. My knowledge of the program is limited and better left to the people running it. As far as I am concerned, I think it is running fairly smooth and has been fair with me. The only concern I have ,I addressed in #5. It has bothered me from the beginning and I only went through this survey hoping to address it if possible. I hope you actually think about it and take it into consideration when making up your next multiple year plan. Thanks in advance.
ii. There has been a noticeable improvement in service from Reliable Tire this past 2 years. In previous years, it was nearly impossible to get our collected tires removed. Now, they are calling us begging for tires! A welcome turnaround for the tire recycling industry. Kudos to Reliable Tire!!
iii. I am very impressed with the work of TSM including efforts to provide service to remote areas. Keep up the good work. iv. Again as an operator, I have been very pleased with the program and how it takes care of our Facility. If I have one suggestion, I would like
to see a little more help financially with the collection of tires on rims. v. We have to place many many many calls to have our tires picked up. They say they'll come but don't, they don't answer, they say they'll
come "so sorry" but don't, over and over again. vi. I think the program is a great idea and absolutely essential but as a tire retailer very disappointed at the service received and refusal to
take larger tires and any tubes at all to date. Furthermore, when arrangements for pick up are made they have never turned up even close to on time or even picked up all of the units available. This situation needs to addressed.
vii. We have enjoyed our relationship with TSM to date. After reviewing information gathered at the MARR conference, it was agreed they were on the right path. They have showed innovation and creativity to recycling tires in Manitoba. As with all industries they will need to keep these qualities to remain competitive.
viii. I am sick and tired of working for nothing for you guys, You should pay us a $2.00 Dollar a tire commision, for doing your dirty work for you!
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TSM Response to Stakeholders’ Survey and Written Submission(s) Regarding Section Six: Plan Summary and General Comments
Manitoba’s approach to tire recycling is proven to be effective in managing all tires and tubes in the most cost effective way for consumers, industry and government. As this consultation shows, well over 80% of stakeholder survey respondents are mostly satisfied and agree with how their industry program operates the tire recycling program in our province. TSM does not support any recycling model that is designed to eliminate the notion of program steward fees entirely from designated products by placing sole responsibility on manufacturers. This would effectively hide from consumers the cost of recycling, let alone make enforcement of steward responsibilities and a level playing field nearly impossible in Manitoba. This is why in Manitoba the steward fee is a supply of a service by TSM to the tire seller. The tire seller is responsible for the tires they introduce into the market and remit the steward fees to TSM. This creates a level playing field to ensure those who import or sell tires in Manitoba contribute to the funding of the program.
Stakeholders have provided comments that there is a marked improvement in scrap tire collections, as Manitobans achieved a record 19,242 Tonnes of material (14.8 kg per capita) for a 91% diversion rate with zero generator complaints registered with the TSM office in 2015. TSM continues to seek improvements to the collection system to reach rural, remote and historically underserviced areas of the province. In 2015, TSM was also able to remove over 1400 scrap tires from the northern community of St. Theresa Point via ice-road. TSM’s intent is to expand this service in the coming years to other northern remote communities with limited transportation access.
The idea that design-for-the-environment can be applied to tires to reduce recycling costs is currently unattainable and also not a change TSM would recommend. Tires can and are designed to last longer but making them easier to recycle is a challenge for the industry in providing the safest product possible. We do support the notion for design-for-the-environment to the extent that product manufacturing is less impactful and wastes are eliminated. TSM agrees that tires should be re-used or recapped whenever possible, however lower cost new tires can impact this market.
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APPENDIX I: Media Release
FOR IMMEDIATE RELEASE January 28, 2016
TIRE RECYCLING SEES RESULTS, SEEKS PUBLIC OPINION _ _ _ _
Manitobans’ opinions on tire recycling plan wanted
Tire Stewardship Manitoba (TSM) is asking the public for their opinions on extending the nonprofit scrap tire recycling program’s mandate until 2021. As part of its commitment to broad consultation, TSM is seeking feedback on its program plan from the public prior to March 4, 2016. “We continue to make progress recycling all scrap tires generated in Manitoba but seek public feedback for improving our program,” states Brett Eckstein, who is the executive director of TSM. The organization replaced the government’s Tire Stewardship Board in April 2008. “Every scrap tire available in Manitoba is now recycled in Manitoba,” reports Eckstein. While protecting the environment, over 1.2 million tires are recycled annually into aggregate, crumb rubber, fabricated and manufactured products creating over 70 fulltime jobs and $7 Million in direct economic activity. Eckstein says the organization can build an even stronger program with the public sharing their ideas before TSM asks Manitoba Conservation and Water Stewardship to approve its recycling plan. A public opinion survey is available online at www.tirestewardshipmb.ca, by email: [email protected], or the TSM office at (204) 661-3242, Toll Free (866) 724-5002. About Tire Stewardship Manitoba Tire Stewardship Manitoba (TSM) is a nonprofit corporation formed to manage the scrap tire recycling program on behalf of tire sellers in Manitoba. It is committed to protection of the earth’s environment and promotion of economic benefit for Manitoba through the sustainable management of all scrap tires and tubes in Manitoba. Contact: Brett Eckstein, (204) 661-3242
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APPENDIX II: Survey Respondents
Terri Reimer RM of Portage la Prairie Lanny McInnes Retail Council of Canada Robert Pohl The Portage la Prairie Regional Landfill Authority Inc Dave Roy Roy’s Ashern Tire Dustin Silver Auto Care Nadine Gapka, CAO RM of Yellowhead Grady Stephenson Town of Carberry Jordan Willner Town of Snow Lake Eldon Wallman City of Steinbach Glenn NDT Canada Matt Veldhuis Western Equipment Dealer Association
Curt Belton Manitoba Eco-Network Don Addison Stonewall Tire Blake Paterson Mazergroup Ltd. Miki Li 88 AUTO INC. Peter Schroedter OTR Recycling Corp Lorne Charney Whitemouth-Reynolds Waste Management Facility Lucie Maynard RM of Stuartburn Gavin van der Linde Association of Manitoba Municipalities Nettie Weiss Weiss Auto Debbi RM of Springfield James Poole Interlake Supply Centre Ltd. Jasmine Gould RM of Pipestone
Ardice Sandale Automotive & Fabrication Lucie Maynard RM of Stuartburn Amanda Davis Roblin Auto Body & Painting Ltd Dan Gagné Town of Altona Billie Jo Thompson Thompson Recycling Centre Teresa Olson RM of Grahamdale Kim Link Sokal Industries A. Toews LGD of Pinawa Barb Bramwell RM of Argyle Jim Dowsett RM of Killarney - Turtle Mountain Brandi Wermie, CPA, CMA Reliable Tire Recycling Terry Shaw Manitoba Trucking Association Anonymous Respondents (7)
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APPENDIX III: Survey Respondent Reply Letters
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APPENDIX IV: Written Submission(s)
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