Product Stewardship Solutions Canadian Paint Stewardship Programs - Overview and Financing Systems: Template or Tangent? Product Stewardship Institute Paint Dialogue Seattle September 19, 2007 by Mark Kurschner, President Product Care Association

About Product Care An industry managed product stewardship association Managing multi material and multi provincial stewardship programs: Governance of Product Care: Membership divided into sectors by material type (paint, flammables etc) Board of 10 members, industry only, also divided into sector elected, sector + board approval required for sector specific issues Product Care and its board have evolved as products added Members are manufacturers, distributors, major retailers (brand owners and first importers)

Product Care’s programs British Columbia: paint (1994) and other Household Hazardous Waste (HHW) (1997) Nova Scotia: paint (2002), managed in partnership with Resource Recovery Fund Board Saskatchewan: paint (2006) Saskatchewan: e-waste (2007) – Product Care appointed program manager to SWEEP – Saskatchewan Waste Electronic Equipment Program, Canada’s first industry managed e-waste program Other Paint Stewardship Programs: Quebec: Eco-peinture, BC:Tree Marking Paint Stewardship Program, Paint Programs in development Manitoba: paint and HHW (2008?) Ontario: HHW (2008?) New Brunswick: Paint (2008?)

How it works collection system transportation processing/recycling communications risk management administration - fees!

Collection system in BC program Product Care operates 100+ depot system, individual depot contracts approx. 50% are municipal sites Product Care also operates infill one day “events” in NS the province wide “Enviro Depot” system is used (depots for beverage container return and other recycling) and some participating municipalities in SK the province wide SARCAN depot system is used (70 sheltered workshop - beverage container return depots, also manage electronics waste) In QC, several retailers also accept return to retail collection system transportation processing/recycling communications risk management administration

Transportation/Consolidation all programs use reusable bin systems pick up frequency varies from several times a week to several times a year. programs contract trucks to pick up full bins, drop off empty bins from depots management of logistics / transportation: In BC, Product Care manages transportation. In SK, NS, transportation managed by collection system. In QC transportation managed by processor. must comply with federal Transportation of Dangerous Goods regns. database system used for tracking consolidation points used to reduce transportation costs and build full loads collection system transportation processing/recycling communications risk management administration

Processing / Recycling collection system transportation processing/recycling communications risk management administration In BC, Product Care manages central bulking facility In SK, NS, QC bulking contracted out For BC and SK, recycling solutions include paint reprocessing, latex in cement/concrete, solvent extraction, for asphalt use, fuel blending, metal and plastic recycling etc., “no landfilling” In NS bulking managed by Paint Recycling Company, then shipped to Laurentide (QC) for reprocessing In Quebec, bulking and reprocessing managed by Societe Laurentide (QC) Reuse: Product Care operates “at depot” and “central paint exchange” reuse programs in BC and SK R & D: two year latex paint in concrete study just completed

Communications collection system transportation processing/recycling risk management administration Communications the challenge – targeting - long product obsolescence cycle - several years between purchase and disposal Product Care’s experience includes: consumer oriented web page, 800# hotline, municipal mailouts, calendars, point of sale material – brochures, stickers on cans point of return promotion (cross marketing)

Environmental Risk Management Objective: To protect program, brandowners, directors, consumers, the environment Tools: environmental impairment national insurance policy insurance reserve fund established development of good management practices, depot guidelines system wide manifest and tracking system due diligence reviews of depots, transporters and recyclers require certificates of disposal, only use reputable recyclers collection system transportation processing/recycling communications risk management administration

Administration Identifying and recruiting brandowners and first importers maintaining database management of member reports and fee remittances - program is funded by “eco fees” paid by members to the program based on unit sales in the province online reporting system now available multi provincial approach provides administrative convenience for members (one stop, common product lists, single audit) member audits conducted collection system transportation processing/recycling communications risk management administration

Canadian Stewardship Programs

Legal basis for stewardship programs About the regulations: Most Cdn stewardship programs operate under provincial regulation (waste management is provincial, not federal) Typically the Regulations are passed pursuant to a provincial waste management statute. Who is obligated Generally the regulations obligate all manufacturers / first importers / first sellers in the province of a specified product to be part of an approved stewardship program. Regulatory design options: Framework type regulation, with products designated in schedules/letters e.g BC, ON (being considered by California now) Product specific regulations, e.g. MB Government role: gov’t oversees the program Requires regular reporting including reference to any targets set Conducts compliance enforcement Non compliance is a prosecutable offence Voluntary Program (non regulated) Can work well (eg. rechargable batteries, agricultural pesticide containers), but vulnerable to non participation

Regulatory system (cont’d) Program product definitions: Architectural (“household”) paint + all aerosol paints Regardless of whether consumer or commercial user Product defns the same in all programs, except empty containers accepted in BC, SK, QC, not in NS, not all aerosols in NS. Regulatory scheme variations: Allow more than one program for the same product (BC, SK, NS) Require participation in authorized program (AB, ON) Provide for an oversight (sometimes multi stakeholder) board (ON, QC, NF) allow gov’t agencies manage the programs (AB, NS)

Financing Setting fees: BC regulation does not stipulate fees, leaves it up to program In some provinces/programs, fees are set or approved by gov’t (e.g. ON, AB) Visibility of fees: In BC, SK no restriction on visibility. However, if fees are visible at retail, under BC Reg’n must produce and post on internet independently audited and include in annual report Generally members charge/recover fees “downstream” as a separate line item to customers fees stay as a separate line item down the chain to the consumer, however this is not mandatory. NS required invisible fees in program plan, but non-member retailers still show fees QC – fees not visible Sales tax on fees Fees are taxable for federal sales tax Fees are taxable for provincial sales tax in BC, not in SK Fee rates: In BC, SK, NS, fees vary by container size: 100- 250 ml $0.10 quart $0.25 gallon $0.40 (BC, SK) $0.50 (NS) 5 gallon $1.00 aerosol $0.10 In Quebec program, flat fee $0.25 for all containers

Financing (cont’d) Financing – general program principles fees periodically adjusted based on product management costs for product/province, fees reduced, never increased no cross subsidization between provincial programs “Volunteer” members Program member is usually the obligated party under the regulation, but sometimes: out of province supplier agrees to become member and to pay fees retailer agrees to become member and pay fees for all suppliers To properly report and pay fees, member must know the volume of sales in the province, ie. a manufacturer shipping to an out of province warehouse would not know the sales in BC

Product Care BC Program - leftover paint - liquid paint volume collected annually (US gallons) 1998-2006 BC Paint Sold 9,639,681 US gals BC Paint Recovered 546,326 US gals % recovered v sold 5.7%

Thank you! Mark Kurschner, Product Care Association mark@productcare.org 877-592-2972