Big beverage companies plan to charge recycling fees in Ontario. Will stores pass the cost on to you?

Companies are poised to start charging recycling fees for non-alcoholic beverages in Ontario following an earlier threat from the province’s environment minister to block the charges. 

What’s not clear is whether consumers will see those fees tacked on at the checkout or buried within the price of the soft drinks, bottled water and juice boxes they buy.

Ontario is shifting toward making the companies that produce consumer goods responsible for the cost of recovering or recycling their waste material.

The industry organization that represents the major beverage producers, the Canadian Beverage Container Recycling Association (CBCRA), is responding to the shift by choosing to impose fees of one to three cents on each bottle, can, carton or drink box sold in Ontario, starting June 1.

Environment Minister David Piccini said during a news conference in April that he would stop the beverage industry from charging the fees. However, there’s nothing in existing legislation that gives him the power to do so.

Piccini is now walking back the comment and instead of banning the fees, is merely urging the producers not to make consumers pay them.

“Ultimately, it is our expectation that these large beverage producers pay for the cost of recycling and not impose any new fees on consumers,” said Piccini’s spokesman, Daniel Strauss, in an email to CBC News. 

“It’s our expectation that producers are able to mitigate any additional costs on consumers by leveraging their extensive experience in operating similar programs in other jurisdictions while utilizing new technology and innovation available to them,” said Strauss.

Mandate to recover 80% of containers by 2030

The producers’ association, which includes such major industry players as Coca Cola, PepsiCo and Refresco, has estimated it will collect some $80 million per year in Ontario from the fees.

The association says the fees will help fund 250,000 recycling bins in locations across the province as well as awareness campaigns to boost recycling.

“We continue to engage with government and appreciate their support in implementing a beverage container recycling program that will support the industry in achieving the ambitious targets set out under regulation,” said Ken Friesen, CBCRA’s executive director, in an email to CBC News.

The provincial government has mandated that the industry recover 80 per cent of all beverage containers by 2030. A consultant’s report found just 46 per cent of non-alcoholic drink containers were diverted from landfills in Ontario in 2019.

Beverage industry’s plans for fees in Ontario

The CBCRA has been running a similar program since 2011 in Manitoba, where 72 per cent of all beverage containers are now recovered, up from 42 per cent when the program began. In that province, customers are charged a two-cent recycling fee on each sealed beverage container purchase.

That program’s financial statements show it collected $10.2 million in fees in 2021 in Manitoba, which has roughly one-tenth the population of Ontario.

Retailers have yet to indicate whether they will pass the fees on to consumers.

Gary Sands, senior vice president of the Canadian Federation of Independent Grocers, says his information is that the major supermarket and retail chains, which are not part of his organization, are pushing back against the beverage industry’s plans.

The major chains “want this to be negotiated. They just don’t want to accept an arbitrary fee increase,” said Sands in an interview.

Retailers blaming big beverage companies

Sands says he’s concerned the big chains will have the leverage to negotiate lower fees or no fees and that his members won’t have the same leverage, leaving independent grocers stuck paying higher fees.

“If the Bay Street grocers aren’t paying those fees, then we don’t want the Main Street grocers to be paying those fees,” he said in an interview.

The Retail Council of Canada, whose board includes representation from such major grocery players as Loblaw, Walmart, Costco, Sobeys and Metro, says while it supports the intent of the program, it blames the beverage companies for any bump in what consumers pay.

“Although the program may result in some price increases for beverage products, it needs to be understood that any increases are within the umbrella of beverage manufacturers,” said the Retail Council’s national spokesperson, Michelle Wasylyshen, in an email to CBC News.

“As retailers, we are committed to working with our suppliers to minimize the impact of any price increase on consumers,” said Wasylyshen.

Requiring the beverage industry in Ontario to cover the costs of dealing with its waste follows earlier moves to do the same with tires, batteries, and electronics technology. 

Those industries already fund their waste programs through fees, and in many cases retailers pass on those fees to consumers as a distinct charge at the checkout.

Provincial legislation does not dictate how much the recycling fees are, and the government doesn’t collect the money. Ontario law explicitly bans companies from portraying the fees as being in any way government-mandated, such as describing them as a tax.

Sands says if the beverage companies do charge retailers the fees, the retailers will have no choice but to pass them on to consumers in some way.

“There’s no business model that exists that you can continue to absorb these kinds of hikes, so it will be the consumers that have to pay,” he said.

The advocacy group Environmental Defence says the fees being imposed by producers won’t improve the recycling rate for non-alcoholic drink containers. The group is calling instead for a deposit-return system, similar to what’s in place for cans and bottles of beer, wine and spirits.