In late December, the Resource Productivity and Recovery Authority (RPRA) approved Stewardship Ontario (SO)’s Blue Box Program Transition Plan, subject to certain conditions, including the deferral of the Material Cost Differentiation (MCD) Methodology.  Read the approval letter.

The plan details how the Blue Box Program will be wound up by December 31, 2025 in order to transition it to Ontario’s new extended or individual producer responsibility regulatory framework and outlines how SO itself will be dissolved soon after. The plan also includes an implementation plan; timelines; financial plan and budgets; promotion and education plan; data management plan; and other considerations.

In approving the plan, the Authority assessed the plan to ensure compliance with the requirements of the Waste Diversion Transition Act, 2016 and the Minister’s directions and consistency with the Authority’s wind-up guide.

The Authority imposed the following six conditions as a stipulation of its approval of the plan:

1. Prior to the implementation of the Material Cost Differentiation (MCD) methodology, SO is required to:

  • develop a proposal, to the Authority’s satisfaction, to further mitigate the increase of InKind funding to municipalities and First Nation communities as a result of the adoption of the methodology until the program winds up
  • develop a plan, to the Authority’s satisfaction, to address stakeholder concerns about potential impacts of the methodology on competition in the market for resource recovery services under the Resource Recovery and Circular Economy Act, 2016

2. SO shall ensure its Code of Conduct applies to all SO staff and develop a plan by February 15, 2021, to the satisfaction of Authority staff, to ensure measures are in place at the staff level to further mitigate conflict of interest

3. SO is required to develop a plan by May 31, 2021, to the satisfaction of Authority staff, to ensure data retained outside of its enterprise resource planning system is managed in a secure manner and destroyed following wind up of the Blue Box Program

4. SO is required to develop a plan by September 15, 2021, to the satisfaction of Authority staff, to maintain or minimize reduction in program performance during the wind-up process

5. SO is required to update the plan as required to address operational and implementation issues and as directed by Authority staff

6. SO shall provide any information identified by Authority staff that it requires to perform its mandated duties

In the Transition Plan, Stewardship Ontario proposed to use MCD as a new input to fee-setting to provide better and more reliable data on the cost impacts of each material in the recycling system. Other Blue Box programs in Canada have already started the process of replacing the Activity Based Costing (ABC) Methodology with MCD and have set 2021 steward fees using the Four-Step Fee Methodology and a 50/50 blend of the MCD and ABC methodologies.

Stewardship Ontario took the same approach in its proposed Transition Plan. They presented the 2021 steward fee schedule at the Annual Steward Meeting (ASM) while highlighting that it was still subject to approval as part of RPRA’s review and consultation on the Transition Plan.

With RPRA’s condition to defer MCD, they had to recalculate 2021 fees using the Four-Step Fee Methodology and ABC Methodology alone, without MCD. Stewardship Ontario encourages you to review the new, approved 2021 steward fee schedule.

Stewardship Ontario will be reviewing RPRA’s reasons for the deferral of MCD and will be responding with a plan that aims to implement MCD in 2022.

The Authority has also approved the Continuous Improvement Fund’s wind-up plan and changes to its governance structure, which was included, by reference, in SO’s wind-up plan. Read the approval letter.

In August 2019, the Minister of the Environment, Conservation and Parks directed SO to wind up the Blue Box Program. SO submitted their wind-up plan to the Authority by the August 31, 2020 deadline.

Between September 30 and November 10, 2020, the Authority consulted on the plan with municipalities, First Nation communities, stewards, and other interested stakeholders. Visit the consultation page of the Authority’s website to learn more about the consultation process and to read the consultation report summarizing the stakeholder feedback received and how the Authority incorporated the feedback in its approval.

During the transition period, SO will continue to operate the Blue Box Program without disruption and the Authority will continue to oversee SO and its operation of the Blue Box Program and monitor the implementation of the approved wind-up plan and its conditions.

Visit SO’s website for information on the implementation of the wind-up plan or if you have any questions, please email Stewardship Ontario at consultation@stewardshipontario.ca.

Source: RPRA
Source: Stewardship Ontario