The Retail Council of Canada says Ontario’s blue-box recycling program will cost companies $740 million in 2026 to run, nearly four times as much as when they shared the cost of curbside collection with municipalities before the program was privatized beginning in 2023.
The retail council is asking the provincial government to revamp the program to offset these costs for companies, which include any business or manufacturer whose materials end up in the blue box.
At fault, it says, is a regulatory framework that allows multiple organizations — called producer responsibility organizations or PROs — to oversee recycling on behalf of the companies that join the PRO. The PRO contracts out the processing of recycling on behalf of its members, and there are four operating in the province.
The council says the PROs are creating needless duplication of administrative and other tasks, which is adding millions to the cost of processing recyclables.
“Ontario came up with this. It’s like an experiment. Nobody in the world does it,” said Michael Zabaneh, the retail council’s vice-president of sustainability.
Meanwhile, the retail council warns, recycling rates have not increased and a target to expand collection to multi-residential buildings, as well as public spaces and parks, by 2026 won’t be met.
The retail council wants one producer responsibility organization to contract out the work to waste companies to process recyclables. Curbside collection is not a problem, according to the council, because it is already handled by just one PRO, Circular Materials.
The increased costs of curbside collection are ultimately passed on to consumers, according to the retail council, which estimates an Ontario family could pay $212 more for groceries a year, as an example of what those hidden fees could amount to.
“Retailers want to see progress toward ambitious but achievable recycling targets that steadily advance our system,” said Zabaneh. “For that to occur, we need a policy framework that allows for investment to happen,” he said, referring to the council’s belief that PROs won’t invest in recycling infrastructure because it will drive up costs for members.
The biggest PRO in the province, Circular Materials, agrees.
“In other jurisdictions in Canada, the single, not-for-profit PRO model has resulted in a streamlined approach that supports stability, efficiency and longer-term investments and innovation,” said Allen Langdon, the CEO of Circular Materials, in an email. “If Ontario maintains a multi-PRO system, costs will continue to increase, putting undue pressure on Ontario’s businesses and limiting progress toward important environmental goals.”
The retail council estimates it will take another $350 million to expand recycling and improve efficiency with new infrastructure to reach provincial recycling targets for paper, rigid and flexible plastics, metal, glass and beverage containers.
However, organizations such as the Mayors and Regional Chairs of Ontario (MARCO) say the system should stay as it is. The organization, which includes mayors and chairs of regional municipalities, represent 10.6 million Ontarians.
The group sent a letter to the Ministry of the Environment, Conservation and Parks in January advocating for the current program.
“Municipalities support the implementation of the blue-box program as planned and approved by the provincial government,” wrote MARCO chair Karen Redman, also regional chair of the Waterloo Region. She noted in her letter that any changes to the system, or to recycling targets, could affect municipalities that are still responsible for managing organics as well as litter and garbage disposal.
Municipalities “support maintaining a competitive marketplace for multiple producer responsibility organizations, strong collection targets, oversight and enforcement,” wrote Redman.
The provincial Ministry of the Environment, Conservation and Parks said in an email that it is continuing to monitor the implementation of the blue-box program as the responsibility for it transitions fully to producers by the end of the year.
“The ministry continues to hold consultations with key stakeholders to hear what is working and what can be improved with the framework and regulations,” according to the email. “The ministry is considering feedback on the blue-box regulation and the analysis is ongoing.”
The former provincial Liberal government passed the Resource Recovery and Circular Economy Act in 2016, which governs the system in place today. The move was also championed by the Conservative government.
Municipalities have been transitioning to the new PRO model in waves since 2023, with the final group transitioning by Dec. 31 this year.
The thinking behind privatization, or producer responsibility as it is more often called, is that it will drive innovation in recycling processes and packaging by making producers — the businesses that create or use the material that goes into the blue box — pay for the recycling program.
Before privatization, Stewardship Ontario, a not-for-profit organization, ran blue-box collection in the province with costs split equally between municipalities and producers. Stewardship Ontario would set recycling targets, but there was no enforcement around targets.
In the current system, recycling targets are enforced by the Resource Productivity and Recovery Authority, the regulatory body that enforces the act. RPRA is analyzing data on recycling rates, which are expected this year.
Peter Hargreave, an environmental consultant, said complaints about the old system are what drove the province to overhaul it. Hargreave said that some producers (the businesses that shared the cost with municipalities) didn’t like the monopoly.
“Producers were concerned that they weren’t being listened to and they wanted choice,” said Hargreave. “And so there was a push by producers for choice.”
Although some provinces such as Quebec have only one PRO, Hargreave said Alberta has multiple PROs as do some jurisdictions in the U.S.
Hargreave said he doesn’t believe the competing PRO model is responsible for the rising costs and that inflation and supply-chain shortages are to blame.
Additionally, expensive new equipment is needed, such as garbage trucks and processing facilities, to meet the demands of an expanded recycling program. For example, the Waste Management of Canada Corporation, which is one of Circular Materials’ contractors, is building two state-of-the-art recycling facilities in Ontario.
”I just don’t think that they’ve been able to appropriately articulate or provide evidence that this (model) is a problem,” said Hargreave of critics like the Retail Council.
