Slide 1

Presentation of Preliminary 2009 Fees for Blue Box Stewards

September 12, 2008

Joyce Barretto, CEO

Slide Slide 22

Welcome!Welcome!

In person ~6In person ~600

Webcast audience ~50Webcast audience ~50 slides advance automaticallyslides advance automatically enlarge slideenlarge slide volume controlvolume control email box for questions/comments email box for questions/comments

left of slide screenleft of slide screen use at any timeuse at any time

please include name & affiliationplease include name & affiliation

Archived webcast available Archived webcast available Volume control

Slide Slide 33

Today’s Agenda: Blue Box FocusToday’s Agenda: Blue Box Focus

Stewardship Ontario key updatesStewardship Ontario key updates Blue Box Program Plan overviewBlue Box Program Plan overview Preliminary stewards’ Blue Box fees for 2009Preliminary stewards’ Blue Box fees for 2009

questions & commentsquestions & comments

BreakBreak Proposed changes to 2009 Blue Box Rules Proposed changes to 2009 Blue Box Rules

& reporting requirements& reporting requirements questions & commentsquestions & comments

Concluding remarksConcluding remarks

Slide Slide 44

Stewardship OntarioStewardship Ontario

Industry Funding Organization (IFO) established Industry Funding Organization (IFO) established under the under the Waste Diversion ActWaste Diversion Act (2002) (2002)

Charged with developing, implementing & Charged with developing, implementing & managing two stewardship programs:managing two stewardship programs: Blue Box Program Plan (BBPP)Blue Box Program Plan (BBPP) Municipal Hazardous or Special Waste (MHSW) Municipal Hazardous or Special Waste (MHSW)

Program PlanProgram Plan

Slide Slide 55

Stewardship Ontario ProgramsStewardship Ontario Programs

20032003——Blue BoxBlue Box packaging & printed material introduced into Ontario packaging & printed material introduced into Ontario

(ON Reg. 273/02)(ON Reg. 273/02) managed through municipal recycling programsmanaged through municipal recycling programs

20082008——Municipal Hazardous or Special WastesMunicipal Hazardous or Special Wastes wide range of products (ON Reg. 542/06)wide range of products (ON Reg. 542/06) managed through municipal MHSW programs managed through municipal MHSW programs

& through commercial & institutional & through commercial & institutional collection programscollection programs

Slide Slide 66

2 Programs; 1 Organization2 Programs; 1 Organization

Distinctly different stewardship Distinctly different stewardship programs programs

Printed Paper & Packaging in Printed Paper & Packaging in municipal waste streammunicipal waste stream

residuals & related packaging residuals & related packaging that require separate that require separate managementmanagement

Material streams, collection & Material streams, collection & processing requirements & processing requirements & funding formulas differfunding formulas differ

Slide Slide 77

Blue Box Program HighlightsBlue Box Program Highlights

5 years successfully discharged members’ legal 5 years successfully discharged members’ legal obligations under obligations under Waste Diversion ActWaste Diversion Act (WDA); (WDA); stewards at 50% share of net program costs stewards at 50% share of net program costs

Keeping combined administration costs of Keeping combined administration costs of Stewardship Ontario & Waste Diversion Ontario Stewardship Ontario & Waste Diversion Ontario (WDO) under 5% of total program costs(WDO) under 5% of total program costs

Successful partnerships with municipalities to Successful partnerships with municipalities to improve effectiveness & efficiency of municipal improve effectiveness & efficiency of municipal Blue Box (BB) programsBlue Box (BB) programs

Slide Slide 88

Profile of Blue Box StewardsProfile of Blue Box Stewards

1,380 registered stewards in 20081,380 registered stewards in 2008

Fee contribution by sector Fee contribution by sector

Other ServicesOther Services1%1%

Durable Products Durable Products Manufacturers and Manufacturers and

DistributorsDistributors9% 9%

Manufacturers & Distributors of Consumables

46%

Printed MediaPrinted Media2%2%

Retailers & Distributors

42%

Slide Slide 99

Blue Box Steward ContributionsBlue Box Steward Contributions

Over first 5 years: Over first 5 years: $191M: direct cash payments $191M: direct cash payments

to municipalities to municipalities ~$7M: “In-kind” advertising ~$7M: “In-kind” advertising

space space $19.75M project grants to $19.75M project grants to

improve effective & efficiency improve effective & efficiency of municipal recycling of municipal recycling programs programs

Slide Slide 1010

Annual Tonnes of Annual Tonnes of Blue Box Material RecoveredBlue Box Material Recovered

Tonnes Recovered

Estimated Recovery Rate

2001 693,547 45%

2002 726,718 46%

2003 779,844 53%

2004 823,635 55%

2005* 786,947 57%

2006* 850,975 64%

2007* 865,969 63%

*Figures do not include wine & spirit containers on deposit in Ontario*Figures do not include wine & spirit containers on deposit in Ontario

Slide Slide 1111

BBPP—A Continuous Improvement ProgramBBPP—A Continuous Improvement Program

Continuous Improvement FundContinuous Improvement Fund

Recyclers’ Knowledge NetworkRecyclers’ Knowledge Network

Market Development Market Development

Slide Slide 1212

Continuous Improvement Fund (CIF)Continuous Improvement Fund (CIF)

Agreement among Stewardship Ontario, WDO, Agreement among Stewardship Ontario, WDO, Association of Municipalities of Ontario (AMO) Association of Municipalities of Ontario (AMO) & City of Toronto to allocate 20% of stewards & City of Toronto to allocate 20% of stewards annual financial obligation to municipalities to:annual financial obligation to municipalities to: support diffusion of municipal BB recycling Best support diffusion of municipal BB recycling Best

PracticesPractices make strategic investments in collaboration with make strategic investments in collaboration with

municipalities toward improving system performancemunicipalities toward improving system performance reduce future net system costsreduce future net system costs

www.wdo.ca/cifwww.wdo.ca/cif

Slide Slide 1313

Recyclers’ Knowledge Network (RKN)Recyclers’ Knowledge Network (RKN)

Completely up-to-date online source of Completely up-to-date online source of municipal recycling informationmunicipal recycling information

User-friendly resource User-friendly resource for recycling ‘Best Practices’for recycling ‘Best Practices’

Likely future site for expanded Likely future site for expanded online recycler training online recycler training

www.recyclersknowledgenetwork.cawww.recyclersknowledgenetwork.ca

Slide Slide 1414

Market DevelopmentMarket Development

Overcome barriers to recycling—provide Overcome barriers to recycling—provide capacity & increase valuecapacity & increase value

GlassGlass──$2.5M investment paid by glass stewards$2.5M investment paid by glass stewards 8 projects including new glass processing plant8 projects including new glass processing plant

due to open October 2008due to open October 2008

$10M savings in glass processing over 5 years$10M savings in glass processing over 5 years

PlasticsPlastics─$2.4M investment paid by plastics ─$2.4M investment paid by plastics stewardsstewards details later in presentationdetails later in presentation

Slide Slide 1515

New Program Report: MHSWNew Program Report: MHSW

Phase 1 launch: July 1, 2008Phase 1 launch: July 1, 2008 300 stewards registered to date300 stewards registered to date

9 materials; 3 “return channels”9 materials; 3 “return channels” automotive, commercial, municipalautomotive, commercial, municipal

Double diversion rate of Double diversion rate of these materials within 5 yearsthese materials within 5 years

Phase 1 Materials

Paints & coatings Solvents Oil filters Oil containers Single use dry cell

batteries Antifreeze Pressurized

containers Fertilizers Pesticides

Slide Slide 1616

MHSW Phase 2MHSW Phase 2

Due March 2, 2009Due March 2, 2009 Materials:Materials:

all batteries, except lead acid batteries from vehiclesall batteries, except lead acid batteries from vehicles aerosol containers such as hair spray containersaerosol containers such as hair spray containers portable fire extinguishersportable fire extinguishers fluorescent light bulbs & tubesfluorescent light bulbs & tubes switches containing mercuryswitches containing mercury thermostats, thermometers, barometers, other measuring thermostats, thermometers, barometers, other measuring

devices that contain mercurydevices that contain mercury pharmaceuticalspharmaceuticals sharps, including syringessharps, including syringes

Slide Slide 1717

MHSW Phase 3MHSW Phase 3

Due August 31, 2009 Due August 31, 2009

Final phase of amended program includes Final phase of amended program includes addition of all other remaining materials addition of all other remaining materials (“Phase 3”) that meet definition of “municipal or (“Phase 3”) that meet definition of “municipal or hazardous waste” in provincial regulationhazardous waste” in provincial regulation

Slide Slide 1818

Wrap-UpWrap-Up

More informationMore information website: www.stewardshipontario.cawebsite: www.stewardshipontario.ca e-newsletter: e-newsletter: Need-to-KnowNeed-to-Know

Provide your opinion about today’s presentationProvide your opinion about today’s presentation form on tableform on table

Slide 19

Preliminary BBPP 2009 Fees

Derek Stephenson, Program Manager

Slide Slide 2020

TopicsTopics

Determining Stewards’ Fees for 2009Determining Stewards’ Fees for 2009 timeline; financial obligation to municipalities; program timeline; financial obligation to municipalities; program

delivery & administration costs; preliminary 2009 feesdelivery & administration costs; preliminary 2009 fees

Policy IssuesPolicy Issues fee-setting methodology; overcoming barriers to fee-setting methodology; overcoming barriers to

performance; managing 2008 surplus; BB containers performance; managing 2008 surplus; BB containers for Municipal Hazardous or Special Materials (MHSM)for Municipal Hazardous or Special Materials (MHSM)

Review of fees over past 5 yearsReview of fees over past 5 years

Slide Slide 2121

Timeline for Setting 2009 FeesTimeline for Setting 2009 Fees

August 1WDO informs Stewardship Ontario of stewards’ obligation for 2009

Sept 12 Stakeholder information session on preliminary fees

Sept 26 Deadline for comments to Stewardship Ontario

Oct 8 Stewardship Ontario Board review & set final fees

Oct 22 WDO Board approval of fees

Slide Slide 2222

Summary of Fee-Setting Summary of Fee-Setting

Fees comprised of:Fees comprised of: External costs charged to Stewardship Ontario:External costs charged to Stewardship Ontario:

50% of verified municipal net system cost50% of verified municipal net system cost including allocation to CIF & in-kind advertisingincluding allocation to CIF & in-kind advertising

projected WDO chargesprojected WDO charges projected Ministry of the Environment (MOE) enforcement costs projected Ministry of the Environment (MOE) enforcement costs

PlusPlus Costs directly incurred by Stewardship Ontario:Costs directly incurred by Stewardship Ontario:

projected administrationprojected administration projected program delivery costsprojected program delivery costs material-specific market development fees (if any)material-specific market development fees (if any) recovery of any shortfall or credit for any operating surplusrecovery of any shortfall or credit for any operating surplus

Slide 23

2009 Material-Specific Fee Calculations

Liz Parry

Slide Slide 2424

Largest Component of Fees Largest Component of Fees

Industry financial obligation to municipalities Industry financial obligation to municipalities represents 96% of feesrepresents 96% of fees

96%96%

Slide Slide 2525

Program Delivery & Admin & WDO ChargesProgram Delivery & Admin & WDO Charges

WDO Program WDO Program DeliveryDelivery0.5%0.5%

3.9%3.9%

NOTES: Program admin generally represents legal, accounting & office overheads as approved by NOTES: Program admin generally represents legal, accounting & office overheads as approved by WDO & Minister.WDO & Minister.

Program delivery refers to activities required to meet program objectives, such as monitoring Program delivery refers to activities required to meet program objectives, such as monitoring performance, allocating costs, increasing the efficiency of recycling programs, ensuring performance, allocating costs, increasing the efficiency of recycling programs, ensuring compliance, etc.compliance, etc.

SO Program Delivery

1.6%MOE MOE ComplianceCompliance0.1%0.1%

SO Admin1.2%

WDO Admin0.8%

Slide Slide 2626

Blue Box Material RecoveryBlue Box Material Recovery

Drop in overall reported recovery due to diversion of LCBO Drop in overall reported recovery due to diversion of LCBO containers now returned through deposit system.containers now returned through deposit system.

Recovery of remaining BB materials relatively flat Recovery of remaining BB materials relatively flat increased by about 2% in 2007 over 2006, compared to increased by about 2% in 2007 over 2006, compared to

4% to 7% in past years4% to 7% in past years population & households increased by about 3%population & households increased by about 3%

Overall recovery rate (excluding LCBO deposit containers) Overall recovery rate (excluding LCBO deposit containers) remains at about 63%remains at about 63%

Tonnes 2006 2007 Year Over Year Change

Overall Recovered 943,000 903,000 (40,000) -4%

Net of LCBO 851,000 871,000 20,000 2%

Slide Slide 2727

Municipal Obligation for 2009 Municipal Obligation for 2009

Obligation for 2009Obligation for 2009 $78.5M$78.5M

Obligation for 2008Obligation for 2008 $66.5M$66.5M

Difference (+18%)Difference (+18%) $12.0M$12.0M

Slide Slide 2828

$5

$10

$15$15

$20$20C

han

ge

in O

bli

gat

ion

($M

)

[1][1]$1.92M$1.92M

[2]$7.44M

[3][3]$0.31M $0.31M

[4]$9.26M

[5]($6.93M)

[1][1] Adjustments for incorrect reporting in previous year.Adjustments for incorrect reporting in previous year.[2][2] Smaller deduction for wine & spirit containers remaining in BBPP.Smaller deduction for wine & spirit containers remaining in BBPP.[3][3] New capital costs: increased investment in system.New capital costs: increased investment in system.[4][4] Increased operating costs: fuel surcharges; new contracts reflecting investment Increased operating costs: fuel surcharges; new contracts reflecting investment

in system; increased recovery in recent previous years; shifting mix of materials.in system; increased recovery in recent previous years; shifting mix of materials.[5][5] Higher commodity prices do not offset costs given: 3 year averaging of revenue Higher commodity prices do not offset costs given: 3 year averaging of revenue

small shift to less valuable mix of materials.small shift to less valuable mix of materials.

2006 to 2007

change in obligation$12.00M

Factors leading to Increased ObligationFactors leading to Increased Obligation

Slide Slide 2929

Material-Specific Increases (1)Material-Specific Increases (1)

All fee rates increase with overall increase in All fee rates increase with overall increase in financial obligation to municipalitiesfinancial obligation to municipalities

Change in obligation affects materials differently Change in obligation affects materials differently due to fee-setting formuladue to fee-setting formula type of material: easier-to-recycle materials have type of material: easier-to-recycle materials have

higher recovery rates & lower cost to manage have higher recovery rates & lower cost to manage have relatively lower fee ratesrelatively lower fee rates

commodity value: higher revenues lower net cost for commodity value: higher revenues lower net cost for that material which results in a lower feethat material which results in a lower fee

Slide Slide 3030

Material-Specific Increases (2)Material-Specific Increases (2)

Therefore, the material-specific changes Therefore, the material-specific changes primarily relate to:primarily relate to: relative quantity of material recoveredrelative quantity of material recovered affect of commodity prices on the costaffect of commodity prices on the cost relative percentage of each material recovered relative percentage of each material recovered

(recovery rate)(recovery rate)

Fee rates are affected by amount of material Fee rates are affected by amount of material introduced into Ontario marketintroduced into Ontario market

Slide Slide 3131

Factors Contributing to Increase in ObligationFactors Contributing to Increase in Obligation

MaterialTonnes

RecoveredNet

CostRecovery

Rate

Tonnes Reported

by Stewards

Result

Printed Paper Relatively large increase

Paper Packaging ▬ ▬ ▬

In line with overall increase

PET ▬ In line with overall increase

HDPE Relatively small increase

Other Plastics Relatively small increase

Steel ▬ ▬ Relatively small increase

Aluminum ▬ ▬Relatively large increase in credit

Glass ▬ Relatively small increase

Slide Slide 3232

Base Fee RatesBase Fee Rates

(50.00)(50.00)

0.000.00

50.0050.00

100.00100.00

150.00150.00

200.00200.00

CNA/OCNA News

Other News

Other Prin

ted Paper

OCC & OBB

Other Paper P

ackaging

PET bottles

HDPE bottles

Other Plastic

sSteel

Aluminum F&B

Other Aluminum

Clear Glass

Coloured Glass

Fee

Rat

e ($

/to

nn

e)

2008 Fee Rates

2009 Preliminary Fee Rates AfterCredit of Operating Surplus

Slide Slide 3333

Preliminary Stewards’ Fee Rates for 2009Preliminary Stewards’ Fee Rates for 20092008 Fees 2009 Preliminary Fees

 Material Fee Rates (¢/kg) Fee Rates (¢/kg)1 Fees ($)2

CNA/OCNA Newsprint 0.148 0.133 $347,022

Other Newsprint 0.764 1.332 $1,961,184

Other Printed Paper 2.182 3.373 $4,820,385

OCC & OBB 7.252 8.115 $20,975,849

Other Paper Packaging 12.534 13.696 $5,651,483

PET Bottles 11.238 12.560 $6,069,735

HDPE Bottles 11.135 11.406 $2,539,465

Other Plastics 18.449 18.990 $26,523,822

Steel 4.744 4.955 $2,849,038

Aluminum Food & Beverage (2.215) (3.116) ($834,143)

Other Aluminum Packaging 5.095 5.912 $188,593

Clear Glass 3.529 3.758 $2,860,223

Coloured Glass 3.976 4.537 $419,707

Total Blue Box Program Fees2,3 $66,605,943 $74,372,363

CNA/OCNA In-Kind Contribution $1,829,057 $3,396,7451. 1. Fees are not final pending on-going review of stewards' reports expected to result in higher reported tonnes before fees are finalized in October.  Therefore Fees are not final pending on-going review of stewards' reports expected to result in higher reported tonnes before fees are finalized in October.  Therefore

total Blue Box program costs would be spread over a larger base of tonnes, tending to reduce fee rates.total Blue Box program costs would be spread over a larger base of tonnes, tending to reduce fee rates. 2. Fee rates include a $4.9 M credit (6%) for the projected operating surplus for 2008 (after the restricted reserve) that is attributable to each material2. Fee rates include a $4.9 M credit (6%) for the projected operating surplus for 2008 (after the restricted reserve) that is attributable to each material3. Total Program fees includes financial obligation to municipalities of $78.5M & projected program delivery & administration costs.3. Total Program fees includes financial obligation to municipalities of $78.5M & projected program delivery & administration costs.

Slide 34

Fee-Setting Policy Considerations

Guy Perry

Slide Slide 3535

Key Policy ConsiderationsKey Policy Considerations

Annual review of fee-setting methodologyAnnual review of fee-setting methodology

Market development investmentsMarket development investments

Allocation for 2008 surplus feesAllocation for 2008 surplus fees

Minimizing future surplusesMinimizing future surpluses

Reconciling containers managed under both BB Reconciling containers managed under both BB & MHSW Programs& MHSW Programs

Slide Slide 3636

Fee-Setting Methodology Fee-Setting Methodology

Changes made to factor weightings for Changes made to factor weightings for 2008 fees2008 fees in 2007, changes were made to dis-aggregate fee in 2007, changes were made to dis-aggregate fee

rates for plastic & paper packaging rates for plastic & paper packaging

Agreement to review weightings annuallyAgreement to review weightings annually No change recommended for 2009 No change recommended for 2009

reasons:reasons: significant system cost increasesignificant system cost increase allow time for recent changes to work through systemallow time for recent changes to work through system implementing plastics market development initiatives implementing plastics market development initiatives

Slide Slide 3737

Market Development InvestmentsMarket Development Investments

For some materialsFor some materials——barriers to increasing barriers to increasing recovery & to lowering cost of recyclingrecovery & to lowering cost of recycling

Provision to include additional material-specific Provision to include additional material-specific fees to overcome barriersfees to overcome barriers paid by stewards of affected materialspaid by stewards of affected materials

Initial focus on glass ($2.5M)Initial focus on glass ($2.5M)——years 2 & 3years 2 & 3

For 2008, $2.4M market development fees to For 2008, $2.4M market development fees to increase plastics recyclingincrease plastics recycling—plastics —plastics stewardsstewards

Slide Slide 3838

2-Track Blue Box Plastics Plan2-Track Blue Box Plastics Plan

1)1) Optimize recovery of highest value plastics via BBOptimize recovery of highest value plastics via BB ““All Bottle Plus” demonstrations (potential 15% lift)All Bottle Plus” demonstrations (potential 15% lift) conducted initial demonstration in Brockville in Juneconducted initial demonstration in Brockville in June follow-up research underwayfollow-up research underway

2)2) Technology investment opportunities for range Technology investment opportunities for range of plasticsof plastics REOI to RFP for range of solutionsREOI to RFP for range of solutions REOI used to ensure activities provide best return for stewardsREOI used to ensure activities provide best return for stewards issued REOI in June, interviews in July-Augustissued REOI in June, interviews in July-August developing next steps to RFPdeveloping next steps to RFP

Slide Slide 3939

Market Development Fees for 2009Market Development Fees for 2009

Recommendations:Recommendations: no additional market development fees for 2009no additional market development fees for 2009 Board to undertake strategic review of Board to undertake strategic review of

Stewardship Ontario market development Stewardship Ontario market development needs across all materialsneeds across all materials

Slide Slide 4040

Management of Surplus for 2008Management of Surplus for 2008

Projected 2008 surplus available: $4.9MProjected 2008 surplus available: $4.9M new stewards foundnew stewards found penalties & interestpenalties & interest conservative budgetingconservative budgeting

Recommendation:Recommendation: continue with current policy of:continue with current policy of:

maintaining restricted reserve of $3.5Mmaintaining restricted reserve of $3.5M

apply remaining surplus to reduce fees in apply remaining surplus to reduce fees in following yearfollowing year

Slide Slide 4141

Minimizing Surplus for 2009 (1)Minimizing Surplus for 2009 (1)

Not possible to project with 100% accuracy total Not possible to project with 100% accuracy total quantity of BB material in next program yearquantity of BB material in next program year

Current practice is to divide projected current Current practice is to divide projected current year costs by steward reported tonnes in year costs by steward reported tonnes in previous yearprevious year no allowance made for projected growth or change in no allowance made for projected growth or change in

material mix, due to lack of data material mix, due to lack of data

Slide Slide 4242

Minimizing Surplus for 2009 (2)Minimizing Surplus for 2009 (2)

Consideration given to alternative of Consideration given to alternative of incorporating projected modest growth rates into incorporating projected modest growth rates into estimates of obligated material likely to be estimates of obligated material likely to be reported next yearreported next year resulting in lower fee rates ($/tonne)resulting in lower fee rates ($/tonne) not recommended at this time—still no clear not recommended at this time—still no clear

generation trends & risk of financial shortfallgeneration trends & risk of financial shortfall

Board support to continue with Board support to continue with current practice current practice

Slide Slide 4343

Blue Box Containers for MHSMBlue Box Containers for MHSM

Addendum to MHSW Program Request Letter states:Addendum to MHSW Program Request Letter states:

““Potential fees should…not [apply] to a different program Potential fees should…not [apply] to a different program developed by WDO (i.e. Municipal Hazardous or Special developed by WDO (i.e. Municipal Hazardous or Special Material containers managed under the blue box Material containers managed under the blue box program).”program).”

MHSM fees:MHSM fees: effective July 2008 with payments commencing Octobereffective July 2008 with payments commencing October fees effective for 18 months—2008 & 2009fees effective for 18 months—2008 & 2009 synchronized with BB fee-setting in 2010synchronized with BB fee-setting in 2010

Some BB stewards will pay fees both for BB containers Some BB stewards will pay fees both for BB containers & for MHSM& for MHSM

Slide Slide 4444

Reconciliation of Costs for MHSM ContainersReconciliation of Costs for MHSM Containers

Program in which fees paid will reflect market in Program in which fees paid will reflect market in which majority of MHSM sold (residential vs IC&I) which majority of MHSM sold (residential vs IC&I) & sector through which majority of containers & sector through which majority of containers managed (BB vs MHSW)managed (BB vs MHSW)

Identifiable costs incurred to manage BB containers Identifiable costs incurred to manage BB containers within MHSW program will be reimbursed by BB program within MHSW program will be reimbursed by BB program & vice versa& vice versa

Measurable recovery of BB containers within MHSW Measurable recovery of BB containers within MHSW program will be credited to BB program & vice versaprogram will be credited to BB program & vice versa

Ensure administrative simplicity, transparency & Ensure administrative simplicity, transparency & minimize arbitrary allocationsminimize arbitrary allocations

Slide Slide 4545

2009 BB Fees for MHSM Containers2009 BB Fees for MHSM Containers

BB containers which contain MHSM will continue to pay BB containers which contain MHSM will continue to pay BB stewards’ fees in 2009BB stewards’ fees in 2009

BB containers for paint, solvents, antifreeze, pesticides & BB containers for paint, solvents, antifreeze, pesticides & fertilizers sold into consumer marketfertilizers sold into consumer market

will pay 2009 BB feeswill pay 2009 BB fees

Oil containers, specifically designated as MHSW will not Oil containers, specifically designated as MHSW will not pay BB fees in 2009pay BB fees in 2009

no BB stewards fees for oil containers in 2009no BB stewards fees for oil containers in 2009 credit for BB fees for oil containers July-December 2008credit for BB fees for oil containers July-December 2008 stewards may apply for an adjustment to their 2008 Steward’s stewards may apply for an adjustment to their 2008 Steward’s

ReportsReports send email to send email to pgill@stewardshipontario.capgill@stewardshipontario.ca

Slide 46

Review of Blue Box Program Plan Fees Over 5 Years

Slide Slide 4747

Determining Financial ObligationDetermining Financial Obligation

0.00.0

20.020.0

40.040.0

60.060.0

80.080.0

100.0100.0

120.0120.0

140.0140.0

160.0160.0

180.0180.0

200.0200.0

20032003 20042004 20052005 20062006 20072007 20082008 20092009

Program Year

Net

Sys

tem

Co

st (

Mill

ion

s o

f $)

Reported Net System Costs Including Costs for Ontario Deposit Containers

Reported Net System Costs

WDO Approved Net System Cost for Setting Fees

Slide Slide 4848

Program Administration Program Administration

Program administration has been less than 5% as required.

0.00%0.00%

1.00%1.00%

2.00%2.00%

3.00%3.00%

4.00%4.00%

5.00%5.00%

6.00%6.00%

2003/20042003/2004 20052005 20062006 20072007 20082008 20092009

Ad

min

istr

atio

n a

s a

Po

rtio

n o

f T

ota

l P

rog

ram

Co

st

Combined SO & WDO Admin

WDO Admin

SO Admin

Program Year

Slide 49

Summary & Next Steps

Derek Stephenson

Slide Slide 5050

Preliminary 2009 FeesPreliminary 2009 Fees

External costs charged to Stewardship Ontario:

Verified municipal net system cost$78.5M

(includes allocation to CIF & in-kind advertising)

Projected WDO charges $0.8M

Projected MOE enforcement costs $0.1M

PlusPlus

Costs directly incurred by Stewardship Ontario:

Projected program administration $1.4M

Projected program delivery costs $1.8M

Material-specific market development fees none

—Board to review strategic needs & options pending

Credit shortfall for operating surplus -$4.9M

Total $77.7M

Slide Slide 5151

CommentsComments

Deadline: September 26Deadline: September 26 consultation slides & detailed calculations posted on consultation slides & detailed calculations posted on

Stewardship Ontario website Stewardship Ontario website

Send comments to: Send comments to: comments@stewardshipontario.cacomments@stewardshipontario.ca

Board will review comments & finalize fees Board will review comments & finalize fees on October 8on October 8

WDO Board consideration & approval of fees WDO Board consideration & approval of fees on October 22 on October 22 note fees no longer require Minister’s approvalnote fees no longer require Minister’s approval

Slide 52

Questions & Comments

Slide 53

Break

Slide 54

Proposed Changes to 2009 BBPP Rules

Paul Gill

Slide Slide 5555

Key ChangesKey Changes

Annual date changesAnnual date changes

Clarification changeClarification change——designation of stewardsdesignation of stewards

Publishing names of notified companiesPublishing names of notified companies

New material reporting categoriesNew material reporting categories

Slide Slide 5656

Annual Date ChangesAnnual Date Changes

Change addressed in sections: Change addressed in sections: Section 1 – defines year for basis of Steward’s ReportSection 1 – defines year for basis of Steward’s Report Appendix B – Appendix B – Form of Steward’s ReportForm of Steward’s Report Appendix C – Payment ScheduleAppendix C – Payment Schedule

Slide Slide 5757

Designation of Stewards (1)Designation of Stewards (1)

Revise order of First Importer & FranchisorRevise order of First Importer & Franchisor

Current Rules

Section 2 (1) Brand Owner

Section 2 (2) First Importer

Section 2 (3) Franchisor

2009 Rules

Section 2 (1) Brand Owner

Section 2 (2) Franchisor

Section 2 (3) First Importer

Slide Slide 5858

Designation of Stewards (2)Designation of Stewards (2)

Modify Modify Section 2 (3)Section 2 (3) In the event that there is no Brand Owner or In the event that there is no Brand Owner or

Franchisor, a First Importer is designated as a Franchisor, a First Importer is designated as a steward…steward…

clarify that a steward is only designated as a First clarify that a steward is only designated as a First Importer if a Brand Owner does not existImporter if a Brand Owner does not exist

No changes to designation of a stewardNo changes to designation of a steward

Slide Slide 5959

Publishing Names of Notified Companies Publishing Names of Notified Companies

Change addressed in section 10 (6):Change addressed in section 10 (6): Stewardship Ontario may publish on its website the Stewardship Ontario may publish on its website the

names of those persons to whom, in 2008 and 2009, names of those persons to whom, in 2008 and 2009, it sent written notice of how to obtain a copy of the it sent written notice of how to obtain a copy of the Rules pursuant to the Waste Diversion Act 2002Rules pursuant to the Waste Diversion Act 2002

aid stewards in identifying their obligationaid stewards in identifying their obligation

Slide 60

Proposed New Material Reporting Categories for 2009

Slide Slide 6161

Background (1)Background (1)

Stewards report kilograms of designated BB Stewards report kilograms of designated BB wastes they introduce into the Ontario market & wastes they introduce into the Ontario market & manage as municipal waste manage as municipal waste 24 sub-categories of packaging & printed materials24 sub-categories of packaging & printed materials

Stewards report on methodology used, Stewards report on methodology used, deductions, brands & additional commentsdeductions, brands & additional comments

Continued packaging innovation leading to Continued packaging innovation leading to introduction of new materials & packaging formatsintroduction of new materials & packaging formats differential recycling & management costsdifferential recycling & management costs

Slide Slide 6262

Background (2)Background (2)

May 2008 letter from AMO highlighted “problem May 2008 letter from AMO highlighted “problem packaging”packaging” non-recyclable & contaminants, difficult to identify & non-recyclable & contaminants, difficult to identify &

sort, and large sizessort, and large sizes used to support AMO position paper on revised BB used to support AMO position paper on revised BB

funding funding

Stewards concerned about differences in Stewards concerned about differences in reporting requirements between Stewardship reporting requirements between Stewardship Ontario & Ontario & ÉÉco Entreprises Quco Entreprises Quéébec (bec (ÉÉEQ)EQ)

Slide Slide 6363

Objectives of Proposed ChangesObjectives of Proposed Changes

Track packaging changes that may impact Track packaging changes that may impact program costs & recovery performanceprogram costs & recovery performance

Provide additional data to better inform Provide additional data to better inform Board decision-making on emerging policy Board decision-making on emerging policy & program issues& program issues

Promote greater harmonization of stewards Promote greater harmonization of stewards reporting requirements in Ontario & reporting requirements in Ontario & QuQueebecbec

Board commitment to monitor impact of Board commitment to monitor impact of steward feessteward fees

Slide Slide 6464

Current Plastic Sub-CategoriesCurrent Plastic Sub-Categories

PET bottles 12.560 ¢/kg

HDPE bottles & jugs 11.406 ¢/kg

Polystyrene

18.990 ¢/kg

for each of these materials

Other rigid plastics

LDPE/HDPE film

Plastic laminant

Natural & synthetic textiles

Slide Slide 6565

Summary of Proposed ChangesSummary of Proposed Changes

Biodegradable plastic film & biodegradable Biodegradable plastic film & biodegradable rigid containers rigid containers

Plastic containers >5 litresPlastic containers >5 litres

LDPE/HDPE carry-out bagsLDPE/HDPE carry-out bags

Request additional information from stewardsRequest additional information from stewards

Slide Slide 6666

Biodegradable Plastic Film Biodegradable Plastic Film & Rigid Containers (1)& Rigid Containers (1)

Proposed additionsProposed additions biodegradable plastic film biodegradable plastic film biodegradable rigid plastic containersbiodegradable rigid plastic containers

Rationale for collecting this informationRationale for collecting this information not addressed in original BBPP because not on the not addressed in original BBPP because not on the

marketmarket growing usage by brand owners & retailersgrowing usage by brand owners & retailers

carry-out film bags, service packagingcarry-out film bags, service packaging

continued…

Slide Slide 6767

Biodegradable Plastic Film Biodegradable Plastic Film & Rigid Containers (2)& Rigid Containers (2)

Rationale, Rationale, continued …continued … considered a contaminant to conventional plastic film considered a contaminant to conventional plastic film

& rigid container recycling& rigid container recycling need to quantify amount entering marketplaceneed to quantify amount entering marketplace

Impact/challenges to stewardsImpact/challenges to stewards limited number of stewards affected, but growinglimited number of stewards affected, but growing

Slide Slide 6868

Plastic Containers >5 Litres (1)Plastic Containers >5 Litres (1)

Proposed additionsProposed additions PET bottles >5 litresPET bottles >5 litres HDPE bottles & jugs >5 litresHDPE bottles & jugs >5 litres Other rigid plastic containers >5 litresOther rigid plastic containers >5 litres

Rationale for collecting this informationRationale for collecting this information large packaging formats fill recycling containers large packaging formats fill recycling containers

& collection vehicles faster, leading to increased & collection vehicles faster, leading to increased collection costscollection costs

continued…

Slide Slide 6969

Plastic Containers >5 Litres (2)Plastic Containers >5 Litres (2)

Rationale, Rationale, continued …continued … some containers lost to disposal under some existing some containers lost to disposal under some existing

MRF configurationsMRF configurations >5 litre based on feedback from operators>5 litre based on feedback from operators AMO & Toronto discussing a ban or deposit on large AMO & Toronto discussing a ban or deposit on large

PET water containersPET water containers

Impact/challenges to stewardsImpact/challenges to stewards limited number of stewards & products affectedlimited number of stewards & products affected stewards may not be able to identify & report productstewards may not be able to identify & report product

by sizeby size

Slide Slide 7070

LDPE/HDPE Carry-Out Bags (1)LDPE/HDPE Carry-Out Bags (1)

Proposed additionsProposed additions LDPE/HDPE carry-out bags LDPE/HDPE carry-out bags optional field for bag unit countoptional field for bag unit count

Rationale for collecting this informationRationale for collecting this information Ontario Plastic Bag Task Force MOU with Minister to Ontario Plastic Bag Task Force MOU with Minister to

reduce single-use plastic bagsreduce single-use plastic bags Stewardship Ontario providing reporting & analysis for Stewardship Ontario providing reporting & analysis for

Task ForceTask Force

weight & bags/capita are being trackedweight & bags/capita are being tracked

continued…

Slide Slide 7171

LDPE/HDPE Carry-Out Bags (2)LDPE/HDPE Carry-Out Bags (2)

Rationale, Rationale, continued …continued … provides valuable & comparative information for the provides valuable & comparative information for the

Task Force Task Force

Impact/challenges to stewardsImpact/challenges to stewards large number of stewards have carry-out bagslarge number of stewards have carry-out bags retailers typically source bags from suppliers retailers typically source bags from suppliers

separately from other plastic film applicationsseparately from other plastic film applications many retailers currently split out plastic bags in their many retailers currently split out plastic bags in their

Steward’s ReportsSteward’s Reports

Slide Slide 7272

Additional Information from Stewards (1)Additional Information from Stewards (1)

Proposed additionProposed addition text box for steward to enter waste reduction text box for steward to enter waste reduction

initiativesinitiatives

Rationale for collecting this informationRationale for collecting this information allow stewards to provide information on what the allow stewards to provide information on what the

company is doing to:company is doing to: reduce packaging materialsreduce packaging materials

select easier to recycle materialsselect easier to recycle materials

utilize recycled contentutilize recycled content

continued…

Slide Slide 7373

Additional Information from Stewards (2)Additional Information from Stewards (2)

Rationale, Rationale, continued …continued … recommendation from Report to Minister: recommendation from Report to Minister:

Assessment of Stewards Actions in Response to Assessment of Stewards Actions in Response to Stewardship Ontario FeesStewardship Ontario Fees

monitor industry packaging & material trendsmonitor industry packaging & material trends support analysis of potential revisions to existing fee-support analysis of potential revisions to existing fee-

setting methodology if program costs increasesetting methodology if program costs increase

Impact/challenges to stewardsImpact/challenges to stewards steward choice to participate or notsteward choice to participate or not

Slide Slide 7474

Proposed New Material Reporting Sub-CategoriesProposed New Material Reporting Sub-Categories

PET bottles12.560 ¢/kg

PET bottles > 5 Litres

HDPE bottles & jugs11.406 ¢/kg

HDPE bottles & jugs > 5 Litres

Polystyrene

18.990 ¢/kg

for each of these materials

LDPE/HDPE film

LDPE/HDPE film carry-out bags*

Plastic laminant

Other rigid plastic

Other rigid plastic > 5 Litres

Biodegradable rigid plastic containers

Biodegradable plastic film

Natural & synthetic textiles

*Optional carry-out bags unit total*Optional carry-out bags unit total

Slide Slide 7575

Comment PeriodComment Period

Please review draft “Proposed Rules & New Please review draft “Proposed Rules & New Material Reporting Categories for 2009”Material Reporting Categories for 2009” comment on additionscomment on additions

Comments due September 26Comments due September 26 put “put “Proposed Rules & New Material Reporting Proposed Rules & New Material Reporting

CategoriesCategories” in subject field ” in subject field email to: email to: customerservice@stewardshipontario.cacustomerservice@stewardshipontario.ca

Slide 76

Questions & Comments

Slide Slide 7777

Wrap-UpWrap-Up

Email questions/comments about presentation Email questions/comments about presentation content by Friday, September 26content by Friday, September 26 customerservice@stewardshipontario.cacustomerservice@stewardshipontario.ca

Slide 78

Thank You!