The Economic Benefits of Recycling in Ontario 02/23/2012

Page 2 Introduction The Existing Blue Box Program Phase 1 - Municipal Hazardous and Special Waste Waste Electrical and Electronic Equipment  AECOM was retained in 2009 to carry out study for Ontario Ministry of Environment (MOE) to look at the Economics of Recycling in Ontario.  The focus was on:

Page 3 Introduction (continued)  The terms of reference were spawned by a series of similar studies in the US.  The study was completed but not released.  The material presented here today is extracted from the study with the permission of the MOE.  Since the study was not publically released the comments and observations made today are those of AECOM. They are not attributable to MOE.

Page 4 Time Frames  Three time frames were employed: 2002 – 2006: Historic Context2007: Benchmark Year2008 – 2012: Projection Years A time of Economic Turmoil

Page 5 Data Sources  Key data sources: WDO Data Call Statistics Canada Inter-provincial Input / Output Model Two surveys – 1) Service Providers, 2) End-users US Studies – National; Florida, Michigan, California, New York, Pennsylvania, Main, Massachusetts, Delaware

Page 6 Some Terms Direct Effects Initial changes in employment, income and output resulting from production spending in a subject sector Indirect Effects Subsequent changes in employment, income and output in all sectors that support sectors directly affected Induced Effects Subsequent changes in employment, income and output in all economic sectors as a result of income spending in direct and indirect sectors Gross Domestic Product (GDP) The value of final goods and services created in a particular time period Full Time Equivalent Job (FTE) A ratio of employment associated with a business where 1 FTE represents a on person working at full time hours Labour Income The sum of wages and salaries and supplementary income Gross Output The total value of sales related to a good or service plus the value of intermediary goods or service used in their production

Page 7 Two View Points Upstream (collection and processing, depot & transfer, promotion & education, administration) Downstream (re-use and manufacture)

Page 8 Looking Downstream UpstreamDownstream 1 Paper Manufacturing 2 Plastics Manufacturing 3 Glass Manufacturing 4 Metal Manufacturing  Iron and Steel  Alumina and Aluminum

Page 9 Input / Output Interprovincial Input Output Model Economic Sectors Sector Multipliers Economic Outputs  GDP  Labour Income  FTE Jobs  Gross Output Upstream Program Costs and Revenues Downstream Commodity Sales into Sectors AECOM IO Allocation Model

Page 10 Material Diverted  Between 2002 – 2007 recycled tonnage grew 25%, with almost all of this growth attributable to the Blue Box  Between 2008 to 2012 recycled tonnage was forecast to grow by 9% with most of this growth attributable to the WEEE and MHSW programs.

Page 11 The Backdrop

Page 12 Blue Box Tonnes and Finances Blue Box Tonnes Marketed Blue Box Costs and Revenues

Page 13 Blue Box - Economic Outputs GDP$340m Labour Income$170m Gross Output$560m 3,430 FTE Jobs

Page 14 Blue Box – Downstream Flows Market Paths Ontario Capture

Page 15 Blue Box – Downstream Flows The Recession 2007 Sales in Ontario = $54m

Page 16 Downstream Outputs

Page 17 Downstream Job Outputs

Page 18 MHSW and WEEE- Economic Outputs GDP$12m Labour Income$ 8m FTE Jobs160 Gross Output$27m GDP$61m Labour Income$42m FTE Jobs835 Gross Output $144m MHSW WEEE

Page 19 Total Upstream and Downstream All Programs  GDP  $714 million  $770 million  Labour Income  $356 million  $387 million  Gross Output  $1.2 billion  $1.3 billion  Jobs  7,300  7,900 Upstream Upstream & Downstream

Page 20 Program Costs and Revenues CostsRevenuesCostsRevenues Blue Box $ 252 $ 107 $ 267 $ 101 MHSW $ 9 $ 1 $ 41 $ 4 WEEE $ 47 $ 38 $ 69 $ 55 Total $ 308 $ 146 $ 377 $ 160 Costs and Revenues in $millions An Issue or a matter of perspective?

Page 21 Program Outputs MeasureBlue Box MHSWWEEETotal Recycling Waste Disposal Tonnes902,50016,34018,700937,5409,375,000 Jobs4, ,1456,1606,245 Jobs/1000t Value Add/t$ 530$ 850$ 6,000$645$ 49

Page 22 Downstream Outputs – Re-use and Re-manufacture, Equipment Supply MeasureBlue Box Material WEEE Material Equipment Manufacture Tonnes1,092, ,640902,500 Jobs ,154 Jobs/1000t Value Add/t$ 188$5,800$ 93 1 – includes tonnes obtained beyond subject programs

Page 23 Sector Comparison in the Ontario Economy MeasureRecycling Programs Waste Disposal AutoFoodChemicalMetalFinance, Insurance, Real Estate Direct Jobs2,2002,90095,50057,50024,60030,750474,400 GDP$285 million$386 million$20.6 billion$10.0 billion$7.6 billon$7.6 billion$110.6 billion % of GDP.05%.07%3.8%1.84%1.41%1.4%20.4%

Page 24 The Knowledge Cliff What we collect and process Where does it go and how is it used

Page 25 Three Questions on the Economics Front 2. What are the revenues? 1. What are the costs? 3. What is the value add?

Page 26 The Value Chain Assemble material Process material Create products Market material Sell products into markets Economic Environment Social

Page 27 Improving The Value Chain – Can we do Better? Think Leverage Think Synergy Be Innovative Have a Plan Create Value

Page 28 Track material flows to end users and brokers 1 Track location of end users 2 Inventory and profile recycling industries 3 Understand how recycled materials are used and their importance 4 Update this report with current information 5 Better understand the WEEE re-use and refurbishment markets 6 To replicate US studies there is a need to look at all recycling efforts 7 Set of annual reports needed to show economic contribution of waste management 8 Need standard reporting frameworks and reporting models 9 Need to evolve some different business models 10 Going Forward

Page 29 In the end Why be bothered? … “because if you don’t know where you are going you might end up someplace else.” Yogi Berra

Page 30 Thank you for your time. Any Questions? Andy Keir AECOM