Some Ontario retailers have introduced thousands of new eco-fees in response to a significant expansion of the province’s hazardous wastes program, and they are not going over well with consumers.
Eco-fees are charges added to the cost of a product at the checkout, like a sales tax. The fees range from a penny to over $6 per item, and are being applied on 7,000 or more items, including batteries, pharmaceuticals, aerosol containers, antifreeze, drain cleaners and other corrosives, spot removers and other irritants, fertilizers, fire extinguishers, fuels and other flammables, fluorescents, moth balls and other leachate toxics, thermometers and other mercury containing devices, oil containers, oil filters, paint and coatings, pesticides, pressurized containers, metal powders and other reactives and adhesives and other toxics.
All of these products are toxic, especially when they are simply dumped into landfills. They end up, almost inevitably, contaminating the water table. Under the expanded Orange Drop program, the province plans to divert 26,000 tonnes of these toxic wastes from landfills over the next year.
This effort, like all Ontario recycling efforts, is being run by Stewardship Ontario, a consortium of manufacturers and first-importers of these goods. This agency is funded by stewardship fees paid by its members, the manufacturers and first importers.
Eco-fees were created as a way of letting consumers know how much is being invested in efforts to recycle used products, and keep hazardous chemicals out of the ground and water. Ideally, an eco-fee would cover the cost associated with recycling the product it applied to.
Eco-fees have actually been around since 2008, when they were introduced for electronic products (computers, TVs, etc.) and paint.
The retailers say eco-fees are set by Stewardship Ontario and that the eco-fees they collect go to Stewardship Ontario. But it’s not quite so direct.
In fact, Stewardship Ontario says it has nothing to do with eco-fees. “We are not involved, in any way, in the setting or collection of eco-fees,” says Stewardship Ontario on its website. “The eco-fee is determined by the manufacturer or retailer.”
Stewardship Ontario has set fees it charges stewards (its members, the manufacturers and first-importers of recyclable items), but leaves it up to the manufacturer and retailer to translate that into the eco-fee.
The kicker in the mix is that there is no one looking over the shoulders of retailers and manufacturers to make sure they are charging the proper amounts, on the proper products. Stewardship Ontario has left all the responsibility for eco-fees with retailers and manufacturers.
And eco-fees do not go to Stewardship Ontario, at least not in the same way HST collected in stores goes directly to Revenue Canada.
Stewardship Ontario (more on this agency in accompanying article) collects stewardship fees from manufacturers and first-importers, not from retailers. The manufacturer or first-importer then recovers that stewardship fee when it sells the products involved to a retailer. The retailer uses the eco-fee it collects to recover what it paid to the manufacturer or first-importer (who has already paid Stewardship Ontario).
Here’s an example of how it works:
A manufacturer (Manufacturer) makes 1,000 one-litre jugs of anti-freeze, and sells them to a retailer (Retailer) for $1,000. Manufacturer now has to pay a stewardship fee of 12¢ per litre ($120 on an order of 1,000 litres) to Stewardship Ontario (which handles anti-freeze in the Orange Drop hazardous waste recycling program). So Manufacturer and Retailer make a deal: Retailer will pay $1,120 for the anti-freeze, and recoup the extra $120 by charging its customers a 12¢ per litre eco-fee. Manufacturer, meanwhile, will get its $1,000 for the anti-freeze it made, and send $120 to Stewardship Ontario.
Controversy
When eco-fees applied to just a few items, they didn’t seem to be a problem. But with the greatly expanded list of products being handled now – in an almost endless number of sizes and variations – the issue has exploded into consumer consciousness. And it hasn’t helped at all that a number of retailers have been caught charging inflated eco-fees.
The controversy has prompted Minister of Environment John Gerretsen to tell Stewardship Ontario to “put in place the necessary audit and compliance systems to ensure consumers are not over charged”.
This assertion that Stewardship Ontario is responsible for eco-fees directly contradicts what Stewardship Ontario has been saying about its role (“We are not involved, in any way, in the setting or collection of eco-fees.” and “The eco-fee is determined by the manufacturer or retailer.”).
Michael McKinnon
Late Friday, after almost ten days of silence on the matter, Stewardship Ontario announced that it was working with the government to come up with a solution to the problem, but it offered little detail on what that solution might entail. It did suggest that the Consumer Protection Act could be used to go after retailers who charged excessive eco-fees.
Comments on this entry are closed.