The Ontario government is abandoning a plan to return millions of dollars in surplus recycling fees, paid by consumers, to tire manufacturers, who would have been free to spend the money at their own discretion.
Instead, the $34 million surplus will be paid out to private companies that manage recycling for tire manufacturers to offset higher costs associated with a provincial increase in the tire recycling target, which the province abruptly raised to 80 per cent from 65 per cent, last month.
Industry experts say the money is urgently needed to clear a backlog of hundreds of thousands of used tires that can no longer be stored safely at tire dealers and garages.
The backlog stems from a slowdown in recycling after the province lowered the recycling target to 65 per cent at the start of 2025, a change the government has never fully explained.
“We’re in favour of the money going to the processors to get this done,” said Adam Moffatt, executive director of the Ontario Tire Dealers Association, which represents more than 500 tire dealers, distributors and retailers across the province.
How a policy reversal created a crisis
After the target was cut, producer responsibility organizations, known as PROs, which manage recycling on behalf of tire manufacturers, scaled back tire collection and processing, leaving hundreds of tire retailers unable to get their used tires picked up from their lots.
Moffatt said his association has seen little sign that recycling has picked up since the province raised the target back up.
“We are meeting with the PROs and the Resource, Productivity and Recovery Authority (which oversees recycling) to better understand implementation timelines,” he said in an email. “However, at this point, we have not been provided with any concrete plans, and we are not seeing a substantial increase in tire collection activity.”
The surplus money that will be used to clear the backlog, about $34 million, accumulated under the former Ontario Tire Stewardship, which managed recycling for tire manufacturers, importers, and other “producers” until 2018, when a new system of competing PROs was brought in under government legislation.
The surplus money has been held by a court-appointed liquidator pending a dispute with the Canada Revenue Agency that has now been resolved.
In a letter to the liquidator sent at the beginning of October, Environment Minister Todd McCarthy directed that the surplus funds be paid out to PROs that could prove they had collected and processed tires above the 65 per cent threshold and up to the new 80 per cent target, calculated as a proportion of the total weight of tires sold by a tire producer in Ontario.
The liquidator and RPRA will hold joint public consultations with the industry and stakeholders to work out a mechanism to disperse the money, but even with the abbreviated process, the funds are unlikely to flow before early next year.
RPRA will also verify that tires are being collected and processed before the funds go out.
McCarthy’s letter also carried an “expectation” that tire producers should not pass the increased cost of reaching the new 80 per cent target on to consumers.
However, one of the largest PROs in the province, eTracks, had already announced it was raising the recycling fee it charges its tire producers, which is typically passed down to consumers, to $8.50 a tire, one of several increases the company has made since 2025, when the fee was $4.50.
“We communicated our customer fee increase in accordance with a required 90-day notice period, first communicating the amount during a 1:30 p.m. customer webinar on Oct. 1,” said Melissa Carlaw, the vice-president of communications and sustainability for eTracks, hours before McCarthy’s letter was released.
“We will adjust the eTracks proposed fee increase as needed as further details are provided on funding to meet the increased targets,” said Carlaw in an email.
Moffatt, of the OTDA, said it might be time for the province to step in and review whether the fees “are transparent, reasonable, and whether additional government oversight is needed.”
“Consumers need to understand that tire recycling fees are not government fees or taxes,” Moffatt said in an email. “The government neither mandates them nor sets their amounts. PROs charge producers for their services, and those costs are passed down by producers through the supply chain to consumers.”
