A person shops in the beverage aisle at a grocery store in Toronto, on Nov. 22, 2022.Carlos Osorio/Reuters
Ontario Environment Minister David Piccini withdrew plans this week to introduce legislation to block a beverage industry group from imposing tax-like recycling fees on non-alcoholic drink containers sold in the province, after receiving assurances the levies would not be tacked onto customer receipts.
The minister had last month condemned industry plans to impose fees of up to three cents for each can, bottle and drink box to cover some of the costs of recycling, starting June 1 – and he warned he could block them.
The conflict is the latest wrinkle as the province moves to a new “extended producer responsibility” recycling system meant to be designed, run and paid for by the private sector – but with more ambitious targets set by the government.
Three sources familiar with the government’s plans say Mr. Piccini was prepared to follow through on his threat and put a bill before the legislature this week that would have authorized the government to draft regulations to control the “communication” of recycling fees under the new system. The Globe and Mail is not identifying the sources as they were not authorized to speak publicly about the plans.
But the plan changed after discussions with representatives from the Retail Council of Canada, which acts for the major supermarket chains and has raised concerns about the fee, and the Canadian Beverage Association. The sources say Mr. Piccini agreed not to bring in new legislation, after assurances – but no formal agreement – that the beverage-container fees would not be passed onto customers as visible add-ons on their receipts.
Meanwhile, the sources also say the government has left the door open to scrapping this plan altogether and replacing it with a deposit-return system, as is common in other provinces and in use in this province for alcoholic beverages.
The advocacy group Environmental Defence argues this is the only way to hit the government’s aggressive target of an 80-per-cent collection rate for beverage containers by the end of the decade. Quebec is expanding its existing deposit-return system.
The industry group behind the disputed beverage fees, the Canadian Beverage Container Recycling Association (CBCRA), says the revenue would cover the creation of a new recycling system for containers tossed out in municipal buildings and public areas and bring in about $80-million a year.
How the new fees are paid, if they are not imposed on shoppers’ receipts, is now expected to be left up to negotiations between retailers and beverage producers. It remains possible that the fees will be built into higher prices paid for by consumers.
Mr. Piccini’s office issued a statement saying the minister expected beverage companies to “mitigate any additional costs on consumers” using new technology or other innovation.
“Ultimately, it is our expectation that these large beverage producers pay for the cost of recycling and not impose any new fees on consumers,” the statement reads.
The CBCRA has maintained that it is up to retailers to decide whether to pass its fees onto consumers on receipts.
In an e-mailed statement this week, Ken Friesen, executive director of the CBCRA, said his group would “continue to engage” with the government. The non-profit group, which has representatives of PepsiCo, Coca Cola Canada Bottling and Tim Hortons on its board, points to its similar program in Manitoba, which it says has been a success. The bulk of the beverage industry in Ontario had been expected to sign onto the program.
Ontario grocers fear a backlash against new fees, with consumers already reeling from inflation and food price hikes. Retailers are also concerned that the fees would collect millions of dollars from consumers even before the new recycling system is rolled out. But the retail sector is not unanimously opposed to the notion of add-on fees.
Michelle Wasylyshen, a spokeswoman for the Retail Council of Canada, said retailers still have “unresolved concerns” about the CBCRA’s plans. She said the council’s goal was to “ensure that any impact to consumers is minimal” and that the program delivers environmental benefits worth its costs. She said retailers will work with suppliers “to ensure fees or price increases are reasonable.”
In a letter to the Environment Minister last month, obtained by The Globe, a senior executive with the owners of grocery chain Sobeys says it supported Mr. Piccini’s declaration against the fees and would not impose them on its customers.
Mohit Grover, senior vice-president of innovation and sustainability for Empire Co. Ltd., which owns Sobeys Inc., said Sobeys supports covering the costs of the new recycling system “collectively by all producers in the province.”