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Ontario Tags Eco-Fees on Consumers’ Supermarket Receipts

Leon Kaye | Thursday July 15th, 2010 | 3 Comments

Is a fee still a tax?  And do they work for effective disposal of hazardous waste?  Consumers in the province of Ontario, Canada, are asking themselves now as they check out of their local supermarket.  Starting July 1, many products from fluorescent light bulbs to tires will generate an additional fee that is tallied at the bottom of receipts.

These “eco fees” cover the costs of recycling and disposing municipal hazardous waste.  Stewardship Ontario, the agency that collects the fees from retailers, uses the money for what it has named the Orange Drop program.

The fees coincide with Ontario’s new harmonized sales tax (HST), a new value added tax (VAT) system that replaced the province’s previous goods and services tax (GST), or actually, provincial sales tax.  Critics of the old GST system complained about the embedded and hidden taxes that burdened both consumers and businesses, as that tax had been imposed every step of production.   The new taxation scheme was introduced to reduce this inefficiency.

But expectedly, the taxes’ introduction has caused some confusion, angst, and anger among consumers.  Some consumers have complained that the same product incur varied eco-fees from different retailers.  Others are upset that the HST—which in Ontario is 13%–is applied to on top of the eco-fees.  Some Ontario residents pointed out that even if the charge amounts to a few pennies, the aggregate total in a province home to 12 million people would surely add up.

And to muddy the waters even further, Stewardship Ontario has given retailers the option to either roll the eco-fees into the cost of the products, or simply itemize them on the receipt.  And items that are deemed “eco-friendly” may—or may not—incur these fees.

The appearance of any lack of consistency or transparency is upsetting consumers, and now politicians are joining the fray.  One complaint is that the consumer is taxed, and not the producer, so manufacturers have no incentive to address the toxicity and carbon footprint of their products.

Stewardship Ontario has its tail between its legs, and has responded with a list of FAQs and myths that have been perpetrated by the media and consumers.  Some of the explanations are logical, and I personally would feel for any of its employees who have had to answer the phones and hear out fuming residents.  But the page’s tone have a “you should’ve known better” sheen on it, which will not help the agency’s cause on the public relations front.

So what are the lessons here?

Change will always cause belly-aching and hype that the government is piling on more oppressive taxes.  But transparency is also the key.  I remember when fees on plastic bottles increased, which caused some grumbling in the beginning, but in the long run have not seemed to curb bottled water consumption in California.  And so we just pay them.  It’s easy to see that tire disposal fee when you have your car serviced, and wonder if that charge is really accomplishing a safe disposal or reuse for those old items.  To that end, consistency is also important—why would retailers allowed to charge what they want and disclose the fees however they choose?

A larger question is whether adding fees really will dissuade consumers from curtailing their use certain products.  Is it possible that other methods beyond imposing fees would work?  Ontario’s experience is only giving us a case study of not what or how to do.  We need examples of what works and is effective.


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  • Ted

    Stewardship Ontario is the brainchild Ontario Liberals under Dalton McGuinty and initially established to serve as a financing organization mandated under the Waste Diversion Act to raise industry funds to reimburse municipalities for 50% of the costs of Blue Box recycling. It has evolved into an independent, unregulated end of life management organization of several products and materials.

    This new Eco Fee, Eco Tax or whatever they chose to call it is simply another huge money grab.

    What is all this nonsense about. For example, why is an Eco fee charged on a refillable propane cylinder, each time a cylinder is refilled and recycled to another consumer. Isn't the purpose of refilling a propane cylinder to enable it to live another day and keep them from the garbage heap. This isn't the end-of-life for a consumer recyclable product and thus it appears Stewardship is overstepping their own self stated mandate charging a recurring fee on such products.

    And here is what Stewardship Ontario has to say about it:

    “We have no authority over how stewards (a manufacturers) manage the fees within their operations – again, they may choose to absorb the cost of their fees into their product price or pass the cost on to retailers.”

    And Stewardship Ontario's definition of “stewards”:

    “companies (our stewards) that produce or distribute”

    Wow…. A fee set by manufacturers to recover costs charged them by Stewardship Ontario. It seem as if they can charge any fee on almost anything identified by Stewardship Ontario as being compliant. And yes… Stewardship Ontario's fee for a refillable propane container is $0.44 each time it refilled and recycled to the consumer? Home Depot added an additional $0.15 for an Eco Fee of $0.59.

    It appears as if this Eco Fee program is simply a huge money grab, unregulated and wide open for abuse.

    Stephane Dion soon discovered the wrath of consumer when he proposed similar fees. Likewise, I expect the Dalton McGuinty and the Ontario Liberals will soon feel the wrath of an Ontario electorate. Enough is enough. Screw me once… shame on you. Screw me twice… shame on me. Unfortunately McGuinty and his team has conspired and done it to us many times since 2003.

  • http://greengopost.com Leon K.

    Thanks for the comments – despite my several trips to Ottawa, I don't have a grasp on Ontario politics (probably b/c what goes on in Alberta is far more interesting and amusing) . . . the lack of consistency and transparency with this program is what seems so troubling . . . and taxing on top of a tax? I reached out to a couple friends there to get their perspective–and I'd say they are very eco-conscious–but they were clueless– I couldn't help but shake my head. All I can say is that I'd give the provincial MP an earful . . . LK

  • http://sayingitoutloud.wordpress.com Wendy Rudder

    It's interesting to me how much air-time this is getting. At worst, Stewardship Ontario picked a lousy day to roll out a program, and seems to have done it with a minimum of up-front consultation and retailer communication. More's the pity, because the premise behind the Orange Drop program is actually pretty sound. Other provinces in Canada, most notably British Columbia where I live, have had similar policy-based programs in place for years. The premise is simple – make producers and consumers jointly responsible for disposing of their products at the end of their useful life. This means the general taxpayer and local government don't offer “welfare for waste” in having to pay to dispose of toxic items in publicly funded landfills. Consumers hopefully make better choices about the products they buy, choosing ones that are easier to recycling, and buying just what they need to avoid having extras to dispose of. The biggest one – by making producers (through the non-profit organization) responsible for disposal, the intent is to get them to design and produce better products, that last longer, are less toxic and cost less to dispose of or recycle. The policy tool is called Extended Producer Responsibility and it works. Don't let a bad program launch colour the impression of a good policy tool.