Ontario’s Waste-Free Ontario Act, 2016 enacted the Waste Diversion Transition Act, 2016 (WDTA) and the Resource Recovery and Circular Economy Act, 2016 (RRCEA). Both Acts were largely proclaimed in force on November 30, 2016.The WDTA provides for the continued operation and eventual wind up of Ontario's four existing waste diversion programs (Blue Box, Municipal Hazardous or Special Waste, Waste Electrical and Electronic Equipment, and Used Tires) and the wind up of the industry funding organizations that operate these programs. The RRCEA establishes a full producer responsibility scheme by providing for regulations that make producers environmentally accountable and financially responsible for recovering resources and reducing waste associated with their products and packaging.
On February 17, 2017, the Minister directed Ontario Tire Stewardship (OTS), the organization that operates the Used Tires program, to submit a plan to wind up the Used Tires program and then itself. OTS must submit its proposed wind up plan to the Resource Productivity and Recovery Authority (the Authority) by October 31, 2017 for review and approval, with the used tires waste diversion program to cease operation on December 31, 2018. The plan would need to address all aspects of the wind up the program, including dealing with its assets, liabilities, rights and obligations, as well as a comprehensive plan for winding up OTS itself.
The Ministry is proposing amendments to the cost recovery provisions of the Used Tires regulation made under the WDTA to support the development and implementation of a comprehensive wind up plan of the Used Tires program. The proposed amendments to the Used Tires regulation, if approved, would:
- Remove steward fee setting methodology provisions;
- Continue steward fees at current amounts until the Authority approves a wind up plan that would include new fee rules to govern during the wind up period proposed by OTS; and,
- Remove reconciliation provisions as of the date the regulation comes into effect.
1) Removing Steward Fee Setting Provisions
The fee setting provisions in the Used Tires regulation set out the methodology that OTS is required to follow when determining monthly fees payable by stewards for each class of tire. The current fee setting methodology was intended for ongoing program operations and was not intended to address the wind up phase of the Used Tires program. The removal of the fee setting methodology provisions in the regulation enable OTS to develop appropriate fee rules to apply during the wind up period, including fee rules to address any program surpluses and deficits, prior to ceasing operations. OTS would include the proposed rules in its wind up plan submitted to the Authority for approval, which can be approved where consistent with the Minister’s wind up direction.
2) Continuing Steward Fees at Current Amounts
The proposed regulation amendments would maintain all steward fees at the current rates set by OTS that came into effect on May 1, 2017 until the wind up plan is approved by the Authority and new fee rules would apply. The plan would include new fee rules proposed by the OTS for the duration of the Used Tires program, beginning when the plan and rules are approved by the Authority until the program ceases operations on December 31, 2018 as directed by the Minister. This amendment, if approved, would provide that fees are not raised before the proposed wind up plan and new fee rules are approved by the Authority.
3) Removing Annual Reconciliation Provisions
The reconciliation provisions of the Used Tires regulation are intended to reconcile any differences between the amount each steward pays in fees for their tires with the actual program costs for managing these tires for each calendar year. The current regulation requires that any overpayment be credited to stewards by June 15 or paid to stewards by June 30, eighteen months after the calendar year in which the steward originally paid the fees ends. Furthermore, any deficit is to be paid by stewards to OTS by June 30, six months after the calendar year in which the steward originally paid the fees ends.
The removal of these reconciliation provisions will eliminate reconciliation payments under the regulation for any surplus or deficit generated after the changes to the regulation take effect. If not removed, compliance with these requirements could significantly complicate the development and implementation of the wind up plan. If removed, any amounts owing to or by stewards from the time the proposed regulation is made, if approved, would be addressed in the wind up plan.