September 17, 2021
The new Hazardous and Specialty Products (HSP) Regulation in Ontario is driving up manufacturing costs with new consumer eco fees for a wide range of products, says the Canadian Paint and Coatings Association.
Those eco fees are already higher than other jurisdictions in Canada and no evidence is provided that substantially increasing costs will produce better waste recovery outcomes, CPCA says. Those increased costs will be passed on to Ontario consumers. All this comes at a time when inflation in consumer costs are at a 20-year high and raw material supplies for manufacturers range from 20 to 100 percent higher than before the pandemic.
The Ontario paint and coatings recycling program has been recognized as one of the most successful in Ontario, consistently meeting or exceeding annual targets. It annually recovers enough leftover paint in Ontario to paint more than 220,000 average-sized homes. However, new regulations recently announced by the Ontario government show regulatory costs have skyrocketed to almost 400 percent more than those paid in 2019 for paint recycling. Oversight under the delegated Resource Productivity and Recovery Authority (RPRA) has increased from 10 to 50 staff in four years with annual operating costs rising more than 300 percent in that time. The trend is expected to continue as the agency spends more on unnecessary and expensive IT costs for information already provided by industry, CPCA says.
The paint industry’s regulatory fees for a normal operating year for the paint recycling program (2019) were $325,000, representing 30 percent of the regulator’s fees. This contrasts with the proposed new regulatory fees approved by RPRA on August 24, 2021, for the paint program. Those regulatory fees are $1.1 million and must be paid before year-end 2021. This represents 58 percent of the total regulatory fees charged under the new HSP regulation for nine product categories, representing close to a 400 percent increase for paint recycling.
The Ontario HSP regulation is the latest manifestation of what has been a seven-year transition from the Waste Diversion Act (WDA) to the Resource Recovery and Circular Economy Act (RRCEA), CPCA says. The latter Act was inherited from the previous government in Ontario, but fully embraced and supported by the current government. Implementation of the regulations under the new Act worsened in terms of increasing red tape and costs for manufacturers. These costs are expected to increase further over the next several years with more duplication of effort and higher eco fees for Ontarians.
Industry fully supports product stewardship and waste recovery and has proven that over the past 12 years in Ontario with the paint program alone recycling more than 53,000 tonnes of leftover paint. However, 400 percent increases in regulatory costs paid for in eco fees by consumers without any clear prospect of better waste recycling outcomes is untenable. It is something that was not expected from this Ontario government. It is time for arbitrary fee-setting approaches and complicated regulations to cease under the government’s commitment to reduce red tape and be truly open for businesses that create high-paying jobs in Ontario.