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October 2004

Ontarioi Packaging Fees Jump Again

Companies using paper packaging and those using paper inserts will see their Ontario packaging fees double in 2005, from those set for the first five months of 2004.

Stewardship Ontario (SO), which is responsible for ensuring that 50% of municipal Blue Box recycling costs are reimbursed by industry, has announced proposed 2005 fees that are 26% higher than its fees for the second half of 2004.

Fees for the “other printed papers” category were increased 1,200%; paper packaging fees went up 50%, and plastics up another 75%. Industry has seen the reported Blue Box program “costs” jump from $61 million (2001-2002) to $118 million (2003 costs), based on datacall surveys. Obligated companies must also make up for the small companies - those that sell less than $2 million CDN - and for any shortfall expected, which could total between $1.5 million and $2.2 million for this year.

The reason printed papers was going up so much was because it gets mixed into newsprint, but does not bring in the same amount of income that ONP does, officials said.

As of late August, SO had collected about 90% of the fees it needs to meet its 2004 goal, with 2,484 “stewards” registered so far. Of that, 1,416 are liable for packaging fees. Of the total, 300 registered but have not paid fees, while 2,000 have not responded to notices from SO.

Based on negotiations with the municipalities, SO had only reimbursed cities for 36% of costs for the first five months of 2004; 44% for the second half, so the new proposed fees represent the full 50% of what was owed for 2005.

SO is finding that it over-estimated the amount of packaging put on the market in Ontario. Once real reports were in, officials found that industry is placing about 100,000 tons less of packaging material on the market than thought. Moreover, they said there was over-reporting of aluminum and under-reporting of plastic and paper in many instances.

Many companies expressed extreme concern over the fact that SO has no control over costs, and that the effects of the “efficiency fund” may not be felt for many years.

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