For decades, Tepperman’s, a family-owned furniture chain in Windsor, has been sending monthly letters to its VIP customers and producing weekly flyers.
It’s a strategy that company president Andrew Tepperman says has been key to bringing in customers.
And for years, the furniture retailer paid anywhere from $42,000 to $75,000 annually to Stewardship Ontario, the now-defunct organization that once managed recycling on behalf of so-called “producers,” the companies and organizations whose packaging or material ended up in the Blue Box.
But last year, in the wake of provincial legislation that downloaded the entire cost of the Blue Box on to producers — moving away from a shared-cost model with municipalities — Tepperman’s got a bill for more than $700,000. The year before, the company was charged more than $500,000.
“When it comes down to a private family business like us, it hurts a lot,” said Tepperman of the downloading, “versus if you’re a Coca-Cola or somebody.”
Tepperman said he has had to borrow money to cover the recycling costs.
“And I’m going to have to pay interest on that over the next couple of years to pay it off to pay into this program, which is punishing us,” he said. “It makes no sense.”
Tepperman has so far refused to pass on the cost to consumers, but it might be the only solution for hundreds of other companies who find themselves in a similar situation due to estimates that show the cost of residential recycling has gone through the roof.
The Retail Council of Canada anticipates the Ontario Blue Box program will cost $850 million this year based on information from its members who pay into the program, up from $172 million in 2022, when all municipalities were still paying their half.
Circular Materials, the administrator of Ontario’s privatized program — which has been phased in over a number of years — didn’t respond to questions from the Star about why costs for the Blue Box have gone up.
Circular’s CEO Allen Langdon said in an email that his organization is working closely with producers and government to reduce costs of the Blue Box program and that it is “committed to ensuring both efficiency and effectiveness in delivering the program.”
For Tepperman, who has reached out to his local Conservative MPP, Andrew Downie of Windsor–Tecumseh, there doesn’t seem to be much recourse.
Downie “understood our frustration,” said Tepperman, “but was unable to do anything in terms of finding a phase-in financial approach or funding to help offset the initial shock.”
The Star reached out to Downie, but he didn’t comment for this story.
One expert believes the staggering increase in cost is the result of a perfect storm, a transition to privatized recycling that took place amid increased inflation, looming tariffs, supply chain issues and a labour shortage.
“All the things that add to costs for procurement,” said environmental consultant Peter Hargreave, as new companies, called Producer Responsibility Organizations, began to take over privatized recycling on behalf of producers, a role once held by Stewardship Ontario.
Producers can try to get the best price from whatever PRO they choose to manage their recycling, but Hargreave said he believes there are only a few PROs operating Blue Box programs in the province, meaning there is little choice.
The retail council says it thinks there are other nefarious actors to blame for the increased costs, namely “free riders,” an industry term used to describe companies or organizations that contribute material to the Blue Box but don’t pay their fair share.
“Since 2022, average producer recycling costs in Ontario have risen upwards of 500 per cent, not because recycling has improved,” said Michael Zabaneh, the council’s vice-president of sustainability in an email, “but primarily because free-riders are forcing responsible companies to absorb the cost.”
Under Ontario’s privatized program, producers are required to register with the Resource Productivity and Recovery Authority (RPRA), which oversees recycling in the province, and report the weight of packaging or other recyclable material they put on the market.
Zabaneh says that reported weight is decreasing.
“More than 35 per cent of the packaging and paper that companies used to report have suddenly disappeared post-transition,” he said. “In short, this is a major compliance problem, and enforcement needs to scale.”
How much of that decrease could be due to “free riders” isn’t known.
The RPRA does investigate complaints of “free riders” and in 2024, it closed 248 cases.
But unless a business is hit with a compliance order or penalty, the results are confidential because many of the companies investigated by RPRA may not meet the definition of a producer, meaning they contribute below the minimum threshold that would require them to pay into the system.
Another 1,287 cases remained open that year, but RPRA said the cases involved “small producers representing a small fraction of the total tonnage,” meaning the agency doesn’t believe the producers are contributing a substantial amount of material to the Blue Box.
The RPRA also said it is working with a number of registered producers who have yet to join a PRO, which means they aren’t paying into the system.
The agency is considering releasing the names of those producers as part of an enforcement initiative that could also result in compliance orders and potential administrative penalty orders, which are fines. Producers who eventually join a PRO will have to pay for their tonnage retroactively.
Hargreave said “free-riders” have been a long-standing source of complaint, dating back to when Stewardship Ontario was still in charge.
But he said it’s more likely that the reported weight of material in the Blue Box has gone done as producers turn away from glass and other comparatively heavy packaging — because they are charged for recycling by weight — to more and more plastic, which is lighter but arguably harder to recycle.
That runs counter to the idea behind producer responsibility — that by shifting the financial burden for residential recycling to manufacturers, brand owners and retailers, it will encourage those producers to design packaging that is more easily recyclable to save money.
