Arbitration Hearings to Decide 2014 Blue Box Funding: Industry shirks costs at taxpayer expense

TORONTO, April 22, 2014 /CNW/ - Ontario municipalities are seeking their rightful share of industry funding for Blue Box recycling programs through an arbitration hearing that launches today.

The Association of Municipalities of Ontario (AMO), representing municipalities with a Blue Box program and the City of Toronto, are jointly going in to arbitration with Stewardship Ontario (SO), an industry group that represents companies that make or sell paper, packaging and other products that go into a Blue Box recycling bin.

Since 2003, provincial law has required the industry group to pay municipalities for 50 per cent of Blue Box program costs.  Property taxes and Toronto residential user fees cover the other half. 

"If industry stewards don't pay their half of the Blue Box program, property taxpayers will pay more," said AMO President Russ Powers.

Program costs are not defined specifically, so the industry's share is generally agreed upon through negotiation, based on cost data reported by municipalities, recycling market rates and other factors.  In 2013, the two sides were unable to come to an agreement.

Stewardship Ontario is arguing that they should pay at least $15 million less than their full 50 per cent obligation, based on their own financial models of what recycling should cost. Municipalities argue that the law is based on real, not theoretical, costs – and those costs have been rising.

"It used to be your Blue Box was filled with cans, paper and glass.  Today, it's filled with different kinds of plastics and excessive packaging that are more expensive to recycle," Powers said.  "Burying recycling costs on property tax bills provides no incentive for improved packaging and products.  The best way to bring recycling costs down is for industry to change their packaging and products".

The arbitrator has agreed the arbitration is to be open to the public, given the taxpayer dollars at stake.  More than 30 hearing dates have been set between today and July 2014, with a decision expected by October 2014.

AMO is a non-profit organization representing almost all of Ontario's 444 municipal governments.  AMO supports and enhances strong and effective municipal government in Ontario and promotes the value of municipal government as a vital and essential component of Ontario and Canada's political system.

SOURCE: Association of Municipalities of Ontario

Brian Lambie, AMO Media Contact, 416-729-5425, [email protected]; Follow AMO on Twitter: @AMOPolicy