Canadian Tire Says 'Back to the Drawing Board' on Latest Round of Eco-Fees

Retailer to suspend charging new eco fees that were rolled out on July 1, 2010

TORONTO, July 19 /CNW/ - For some years, many retailers have charged visible fees up front to help recycle obviously complicated products like televisions or tires. A few years ago, the Government of Ontario worked with retailers and companies to set up a recycling organization called "Stewardship Ontario" to oversee and pay for the recycling of both ordinary and toxic waste, including the blue-box program. They were also tasked to run the recycling of everyday hazardous materials like cleaning products.

In 2008, Stewardship Ontario rolled out a test program on select hazardous products and most retailers in the province listed the eco-fees on the customer's receipt. Most people accepted these fees, understanding that disposing of products like paint or varnish would cost a little more than ordinary newspaper.

On July 1, 2010, Stewardship Ontario rolled out an updated version of its hazardous products recycling program, effectively charging retailers and manufacturers eco-fees on thousands of new and additional products. At Canadian Tire Corporation, Limited (CTC, CTC.a) this affected 8,700 products.

The roll out of this program was poorly handled by all involved. For this reason, effective July 20, 2010, Canadian Tire has suspended charging any of the new eco fees that were rolled out on July 1, 2010 until a better system can be developed with Stewardship Ontario and the Government of Ontario.

The Government of Ontario's agency responsible for recycling - Waste Diversion Ontario - set up a very complicated fee for 'materials' instead of 'products' - meaning that two similar brands of cleaning products could have two different eco-fees depending on slight variations in their ingredients. Even more confusing - the 'interpretation' of these fees is left up to each retailer - meaning that 5 different retailers may charge 5 different eco-fees for the exact same product - all depending on how they interpret the very complicated fee structure.

For their part, Stewardship Ontario did not do a good job in preparing Ontarians for these new fees. They did not properly communicate why the fees exist or the importance of safely recycling these hazardous products. Stewardship Ontario did not provide answers to the many questions customers and the media had in the face of fees that nobody understood.

For our part, Canadian Tire did not do a good job of implementing the fees - largely because of how complex they are. Although we quickly fixed any incorrect fees, we still have customers every day asking us why two nearly identical products have different fees. We don't have good answers - because the program itself isn't built to be intuitive for either customers or retailers.

Some companies make everyday hazardous products - some companies sell them - customers buy them and ultimately throw them out or recycle them. In that spirit, everyone has to pay their share to protect our environment and our landfills from seeping toxic and hazardous waste.

We are concerned in the face of this botched roll-out of July 1st fees that the most politically-expedient and short-term solution is to 'ban fees for consumers'. That would be the wrong move. Customers should be able to make informed purchases - and be able to pick the products they buy based on a number of factors, including how much it costs to recycle the product.

Canadian Tire supports environmentally responsible business practices and has always promoted transparency with our customers. Many fees and taxes are imposed on retailers every year - some we pay ourselves and some we pass along to customers where it makes sense. If consumers pay for recycling fees up front - as they do now on many products - we believe they should know and understand what they're paying. They should never have to pay for hidden fees - deliberate or otherwise.

Canadian Tire has contacted the Government of Ontario and Stewardship Ontario and offered to work with them to refine the program for hazardous materials and make sure it makes sense for everyone. In the meantime, we will not pass along these latest costs to customers until they make sense and can be explained.

ABOUT CANADIAN TIRE

Canadian Tire Corporation, Limited (TSX: CTC.a, CTC), is one of Canada's most shopped general retailers with 480 Canadian Tire stores across the country. Our core retail and automotive operation is strengthened by PartSource, an automotive parts speciality chain; Canadian Tire Petroleum, one of the country's largest independent retailers of gasoline; Mark's "Clothes That Work," a leading retailer of men's, women's and work apparel; and, Canadian Tire Financial Services, which has issued over five million Canadian Tire MasterCard credit cards. More than 58,000 Canadians work across Canadian Tire's organization from coast-to-coast in the enterprise's retail, financial services and petroleum businesses.

For further information: Amy Cole, 416-544-7655, (m) 416-997-9825, [email protected]; Adrienne Alexander, 416-480-3507, (m) 416- 432-4405, [email protected]