RCA Response to EPR Discussion Paper

1. Create an overarching EPR regulatory framework.
   • This will create a framework (i.e., a template) that will pave the way for both current target materials (PPP-SUP and HSP) and any future target material to be managed under an EPR model.
   • The GoA proposes a ‘pure’ or 100 per cent producer responsibility model that provides maximum flexibility for producers to meet regulated outcomes, including freedom of association (producers may choose to form one collective, multiple collectives, or take an individual (i.e., direct model to meet regulated targets).  
   • The GoA proposes the EPR framework be overseen by a producer-funded, third-party, government-enabled oversight body. The oversight body would be overseen by a Board that is free of conflict of interest and can be dedicated to meeting the public interest.
2. Develop an EPR approach for an initial list of residentially generated PPP-SUP.
   • The GoA proposes to harmonize the PPP-SUP materials it will target in regulation with those managed under BC’s current system, including adopting BC’s material category definitions.
   • The GoA is silent on whether it would harmonize with BC if it expands its EPR system to include ICI materials, as BC has proposed in its recent “Recycling Regulation Intentions Paper[1]”.
   • The GoA proposes to target additional plastic materials after consultation with industry.
3. Develop an EPR approach for HSP.
   • The GoA proposes to target the following HSP product categories: pesticides, batteries, non-refillable pressurized containers, products with flammable, toxic and /or corrosive characteristics, and the containers in which these materials are contained.
   • The GoA is not proposing to include pharmaceuticals and sharps, fluorescent lights or lighting, or antifreeze.

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[1] Ministry of Environment and Climate Change Strategy. Government of British Columbia. 2020. Recycling Regulation Policy Intentions Paper. Available online: https://www2.gov.bc.ca/gov/content/environment/waste-management/recycling/extended-producer-responsibility/recycling-regulation (viewed 2021-04-13).  

1. It is important that government understands and communicates that it is regulating a system, rather than individual programs, as this will influence how it will engage in conversations that inform policy and ultimately its approach to regulation.

• In an outcomes-based system, producers can choose to act collectively, in small groups, or individually and consequently multiple ‘programs’ can exist across the province.
• In a multi-program system, only government (or its designated oversight body) will have the ability to measure and report on overall system performance to Albertans. The government will need this information on system performance outside of ‘programs’ to improve its approach to regulation over time and achieve maximum financial and environmental benefit for Alberta.

The RCA proposes:

• The GoA shift its language to regulating EPR systems.
• The oversight body be given the mandate and authority to collect data and report on system results.
• The oversight body be given the mandate and authority to report on the amount of stewarded material ‘exempted’ from regulated EPR obligations (e.g., through small business exemptions) and the stewarded material that continues to be managed under municipal waste systems.

Together, these recommendations will ensure the GoA has the data it needs to understand system performance and make improvements to regulation over time, and that producers are encouraged to think ‘outside of program development’ in how they respond to meeting regulated targets (e.g., implementing reuse, refill, or deposit-return systems instead of developing a curbside collection program).    

2. It is important that government ensures it designs regulations that provide producers with incentive to comply with both the letter and spirit of the law. It is important to ensure that EPR systems do not ‘punish’ producers who are acting in full compliance with the spirit and intent of the regulations, while at the same time creating perverse incentives, rewards, or exemptions for producers that do not. For example:

• Producer responsibility organizations (PROs) / producers of non-recyclable or difficult to recycle packaging are required to meet lower targets than PROs / producers that manage highly recyclable packaging. For example, non-recyclable drink pouches have been collected and disposed in Alberta for more than 20 years. Ideally, the system should provide an incentive for producers to invest in improved recycling technology or packaging redesign.
• PROs responsible for managing obligated materials are not required to collect and manage all obligated materials marketed by their members. PROs can choose to meet targets by deciding to only collect those materials for which recycling options currently exist.  
• The cost of free rider enforcement often falls partly or wholly to PROs/producers who are already complying with the system. Free riders are rarely required to pay the full costs of compliance, which means the good actors are subsidizing the bad actors.
• PROs/producers that meet all reporting requirements face the same level of third-party scrutiny (e.g., ‘auditing’ and associated costs) as PROs/producers that do not.

The RCA proposes:

• All producers be required to meet the same ‘collection’ targets and be required to collect all obligated materials or face a consequence.
• Post-collection, all producers should report performance on the full waste management hierarchy (reduce, reuse, recycle, recover energy, and dispose). This would encourage producers to be responsible for the full lifecycle of their materials and increase the opportunity for them to have the feedstock and incentive to invest in research to develop recycling options.
• Producers of non-recyclable materials be required to plan to develop recycling options for the materials they must dispose.
• The oversight authority be granted the ability to set review and reporting requirements (i.e., whether audit or verification is required). This would enable the oversight body to reward those PROs/producers who produce clean audits year-over-year by reducing the requirement from third party audit (which has legal and cost implications) to third party verification.
• The costs of non-compliance with any regulated outcome be greater than the cost of compliance. This will help to remove any perverse incentives for producers to avoid meeting targets.

3. It is important that government ensure its new EPR regulations are not just a cost-shifting exercise. A primary purpose of EPR is to achieve better environmental outcomes. As such, measurement and reporting on system success should be focused on those environmental outcomes.

The RCA proposes:

• The government (or its oversight body) report on the amount of material generated by the system (not just the obligated producers), collected, re-used or refilled, recycled, recovered (energy), and disposed. For a complete picture, leakage in the system where materials continue to be managed by municipalities should also be reported. Partnerships between PROs, producers, municipalities, and the oversight body could ensure that a data bank of municipal waste audits is kept to inform this outcome.  
• The GoA adopt the Ellen MacArthur definition of recycling[1], which excludes the recovery of energy and backfilling of materials.
• The GoA adopt the European Union approach to measuring whether producers meet their recycling targets[2], including requiring adequate proof of recycling. This enables and requires PROs / producers to ensure their contracts include provisions for auditing, which is the only way for the oversight body to obtain proof of recycling. For example, in Europe material must be tracked to the re-processors and producers must provide proof of final recyclate being sent to end-markets. This encourages PROs/producers to seek out high-efficiency re-processors over those that cherry-pick material and send the bulk of their inputs to landfill.  Processors can provide proof of their overall estimated efficiency (recyclate exiting the system / material entering the system).  
• PROs / producers be required to collect all obligated materials, especially plastics, whether they are recyclable or not, and develop a plan to invest in recycling options. This will encourage producers to work with local re-processors to find solutions. It would also provide the feedstock re-processors need to experiment in finding solutions.
• The government (or its oversight body) report on jobs and investment made in Alberta to facilitate new systems and material managed in Alberta, as a measure of Alberta’s contribution to a circular economy.

4. It is important for the GoA to understand they are setting an EPR framework for all future materials, regardless of its current focus. This framework needs to be designed to evolve, and it needs to be capable of overseeing different types of mechanisms (e.g., deposit-return systems).

The RCA proposes:

• The GoA publish an intentions paper to consult on a list of materials it could put under EPR over the next 5-10 years. This would encourage data gathering, investment, and research into diversion options.
• The GoA acknowledge the likely future transition of existing programs to an EPR framework.
• The oversight body be enabled with a mandate to effectively oversee different mechanisms (e.g., deposit-return).

5. It is important for the government to recognize the unique opportunity available in Alberta to engage ‘primary resin producers’. These actors have the technology and know-how to advance the recycling of plastics that are currently globally unrecyclable. As a result, Alberta’s PROs / producers have a unique opportunity to engage these resin producers in creating solutions.

The RCA proposes:

• The GoA work with the Plastics Alliance of Alberta to engage resin producers and identify  the role they can play within an EPR system to build a circular economy for plastics.

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[1] Ellen McArthur Foundation, n.d. Definitions List. “The process of reducing a product all the way back to its basic materials, reprocessing those materials, and using them to make new products, components or materials. Recycling refers to materials that are processed in practice (as opposed to materials for which recycling is technically feasible).” Available online: https://www.ellenmacarthurfoundation.org/assets/downloads/Circulytics-definitions-list.pdf (viewed 2021-04-15). 

[2] European Parliament and Council, 2019. Commission implementing decision (EU) 2019/1004 of 7 June 2019 laying down rules for the calculation, verification and reporting of data on waste in accordance with Directive 2008/98/EC of the European Parliament and of the Council and repealing Commission Implementing Decision C(2012) 2384. Available online: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32019D1004&from=EN (viewed 2021-04-15). 

The RCA supports the GoA proposals to:

• enable 100 percent producer responsibility for operating and financing the system;
  • provide producers with maximum flexibility to act individually or act collectively by freely associating with other producers or service providers (i.e., PROs) to meet regulated outcomes;
  • decline a requirement for government-approved stewardship plans; and
  • harmonize its definition of producer with other provinces.

Canada-wide PROs are in the best position to inform definitions that will result in the fewest free riders and be most resistant to changes in format or technology (e.g., change in package or introduction of a new electronic device). Together, these proposals will provide producers with the responsibility, authority, and flexibility to work in the most efficient way possible to achieve regulated outcomes.

We agree producers should not be required to have ongoing government-approved stewardship plans that detail ongoing operational practices because of the legal conflict they create for both the province in holding PROs/producers accountable to outcomes and the federal government under the Competition Act. However, we also recognize the importance of public vetting to inform an effective transition to EPR, as the activities undertaken during transition will result in costs and consequences for all actors in the system. Public vetting of government policy and the plan for its implementation is considered a best practice by other Canadian governments when moving to modern outcomes-based regulations. In this case, public vetting could enable the government to better understand the likely consequences of EPR implementation and provide stakeholders with the information they need to adjust their operations to work with the incoming systems. Public airing of transition plans can identify gaps early and give government the information it needs to amend its policies to fill those gaps, if needed.

Transition planning is done differently in different provinces. In BC, when new programs were being introduced, transition plans were included as one component of the PROs’ inaugural stewardship plans. Publication of transition planning enabled discussion, feedback, and fair negotiation on how to fairly transition. In Ontario, the publishing of draft regulations has provided an opportunity for negotiation and feedback before a regulation is made final, which has ensured the government has the ability to amend the regulation to add additional prescription if negotiations are not productive. However, in Alberta, there is no proposed transition plan or plan to publish draft regulations for Alberta’s stakeholders to vet. Further, there will be no opportunity (outside of a regulatory amendment) to correct issues that arise if errors in or unproductive components of the regulation are found. This ‘blind’ approach provides little transparency and great uncertainty for stakeholders, especially municipalities, on how they should proceed to fairly transition, and little comfort for smaller municipalities or regional waste authorities that might not have the staff or capacity to engage in fair negotiations with sophisticated PROs. Problem solving on a path towards an EPR end-state should be collaborative, productive, and supported by effective law.    

The RCA proposes that for the PPP-SUP system:

• PROs/producers be required to undertake stakeholder engagement on a transition plan to shift system management from municipalities to PROs/producers.
• Stakeholder engagement should include consultation, identification of what was learned through engagement (e.g., via a ‘what we heard report’), and editing of the transition plan to overcome the issues identified.
• The oversight body should ensure the transition plan process takes place and meets criteria; government approval of the plan should not be required.

A requirement for transition plans would establish a process to create the transparency needed during transition to ensure issues are identified and managed fairly, and to ensure that no municipality is left behind. Issue resolution can be accomplished either directly by PROs/producers or via amendments to the draft regulation. This process would be especially wise if multiple PPP-SUP PROs come forward to manage different baskets of material or different geographic areas of the province. This would also bring the transparency needed to assess whether the transition will be in the public interest from a triple-bottom-line perspective.

While the RCA supports the concept of a small business exemption, its implementation is problematic. Three issues arise:

• It legitimizes free riders.
• It forces the ‘good’ actors contributing to the system to fund the costs created by (formalized) free riders.
• It complicates reporting on system performance (i.e., Because small producers are not obligated to report into the system, their materials are not counted as generated and available for collection. At the same time, their material is collected alongside that of obligated producers as the material is indistinguishable at the point of collection. This results in an overcalculation of the actual system recycling rate.)

Exempting newspapers would create a similar issue. It creates a legitimized free rider in the system for a significant tonnage of material. The costs of newspaper management should not be borne by other PPP-SUP producers.

The RCA proposes:

• The oversight body be required to report on system performance, including total material reported as supplied (obligated producers) and total material generated (i.e., total material reported as managed under the 4Rs and material disposed).
• The GoA negotiate with newspaper producers to develop an approach to newspapers that ensures these materials are part of the system and the costs of their management are not borne by municipalities.

The RCA supports the GoA’s proposal to establish a well-resourced and unconflicted oversight body to backstop and support an EPR system. This approach will enable Alberta to create a level playing field amongst producers and ensure none have a perverse incentive to skirt the system. EPR cannot be effective if free riders and poor performers avoid the consequences.

• Ontario’s oversight body was enabled with the ‘authorities’ needed to enforce an effective EPR system – i.e., powers to inspect and audit, issue compliance orders and levy administrative monetary penalties.

Further, the RCA supports all efforts to bring transparency to EPR systems, including requiring engagement with stakeholders. However, the use of Industry Advisory Councils has been generally less effective than desired. Instead, the oversight body should be required to seek advice from and engage with (not ‘consult’) a range of actors along the value chain, not just industry, as part of their reporting on system success (outcomes, opportunities, and gaps).

The RCA supports an outcomes-based regulatory approach, but it needs to be effectively enforced and environmentally sound. The compliance framework needs to include adequate consequences to encourage PRO/producer compliance. Otherwise, producers could find it to be more cost-effective to avoid compliance. 

Finally, the RCA supports the idea that producers that charge the visible eco-fees should report on the use of these funds. 

The RCA proposes:

• Producers be allowed to report on performance through a PRO, while still being individually liable for results if a PRO fails to meet its targets.
• PROs and producers be allowed to compete to collect and recycle materials without interference by the oversight body. Competition to meet targets will only result if the targets are ambitious and there are consequences to non-performance.
• The oversight body be enabled and required to hold stakeholder engagement to inform the public and government about successes, opportunities, gaps, and issues within the system.
• The oversight body be enabled with discretion that can reward good performance and punish bad performers -e.g., clean audits could mean a reduced auditing frequency or a shift to verification.
• The compliance framework be enabled to deter non-compliance -i.e., lay directives and administrative monetary penalties that nullify any benefit that producers received over their period of non-compliance and additionally provide a punishment for their period of non-compliance. This ensures producers aren’t encouraged to ‘wait and see’ if they are caught.

The RCA encourages the GoA to establish ambitious targets. Low targets will result in no improvement in environmental outcome over the status quo system that is already managed diligently by municipalities. If this happens, Alberta will lose out on the environmental and economic opportunities created by improved diversion.

The RCA proposes:

• There be an absolute requirement that if a material is obligated, a producer must establish a system to collect the material whether they can recycle it or not. Multi-producer PROs should not be able to decide to decline to collect an obligated material. This will provide the most opportunity to shift the costs and consequences of product management from municipalities to producers. This will also provide incentive for producers to choose economically recyclable materials.
• Government should require producers to collect all parts of their packaging or products. Producers should not be able to exclude container caps, attachments, or labels. Caps especially are high litter items that contribute microplastics to the environment. These are fully recyclable if material recovery facilities are fitted with the right equipment.
• Targets should include collection and recycling/safe disposal (as appropriate).
  • However, weight-based recycling rates won’t work for some materials. Ancillary targets will be needed – e.g., light-weighting of electronics can cause weight-based targets to be impossible to meet. In these cases, corroborate achievement of targets using supplemental information e.g., landfill audits.
• The government should set targets only after consultation with key stakeholders, including producers, municipalities (who pay for the costs of materials not recovered), and environmental organizations (such as the RCA).
• Targets should be ambitious (be set above the status quo) and be increased over time in a phased and public graduated approach. This will provide producers with the notice and incentive needed to encourage innovation.
• Targets must be reviewed by government on a reasonable basis (i.e., 3-5 years maximum) to ensure those targets continue to be ambitious and inclusive enough to drive improved triple bottom line outcomes (e.g., assess whether there are gaps in material coverage or whether there is stagnation in outcomes being achieved).
• Targets should be backstopped with incentives and penalties. Incentives should encourage producers to collect above and beyond targets.   
• Producers must be required to report on recycling to the final end-market, absent of any residuals that have been screened out. This is needed to ensure that producers are choosing the most environmentally effective option for end-of-life disposition, not just the cheapest option. It will also discourage long-term ‘storage’ of materials.
• Regarding services and service standards:
  • Service standards should ensure residents receive at least the same type and quality of service as they are getting today.
  • Service standards should require service being at least as convenient as garbage (e.g., if garbage is provided at curbside, recycling should be as well).
  • Service standards should ensure rural, remote, and indigenous communities receive reasonable levels of service. This includes non-urban residential communities (primarily located in rural districts) coordinated by organizations like homeowners’ associations.

• Services should be provided across all types of homes (single-family and multi-family, even if multi-family services are not currently offered by a municipality in a community).

The RCA proposes:

• For PPP-SUP,
  • Alberta include the same SUPs that BC will include in its regulation by 2024, plus all materials currently targeted by the federal government.
  • Government recognizes the relative contribution of ICI PPP-SUP generation in Alberta and commit to expanding Alberta’s system to encompass PPP-SUP from the ICI sector when BC does. The continued landfilling of this material is a lost opportunity for improving Alberta’s environment. It’s also a lost opportunity for Alberta to benefit from the economic contribution that the diversion of this material would provide for our economy in support of Alberta’s Natural Gas Vision and Strategy.

• For HSP,
  • The GoA is proposing ingredient-based regulations, which is no longer a best practice and has known issues. Instead, Alberta should harmonize its definitions with the federal definitions and encourage other provinces to do the same.
  • Alberta should add pharmaceuticals and sharps to the list of obligated materials. The national association that manages this material has stated that they will no longer fund non-regulated systems like Alberta beyond 2022.
  • Alberta should harmonize with BC and add fluorescent lights and antifreeze (which are currently unmanaged in Alberta) to the list of obligated materials.
  • Alberta should ensure that all radioactive alarms are included in system, not just those generated residentially. It is difficult for collection sites to distinguish between these alarms and their exclusion results in collection sites being responsible for the costs of their disposal.

We congratulate the GoA for its proposal. We understand that this is a first step towards an EPR systems approach that encourages producers to take responsibility for the items they put into Alberta’s marketplace. The RCA is ready and able to support the GoA as it explores improvements to its proposed approach.

Once the EPR framework is established, we encourage the GoA to continue its efforts to improve and encourage a circular economy by implementing complementary activities that support EPR or encouraging them through a Canada-wide approach. These include:  

• a right-to-repair law for electronic materials;
• national standards for recycled content;
• restrictions on problematic materials (like oxo-degradables or oxo-biodegradables) that are known disruptors in recycling and organics processing systems; and
• a national labelling system that would eliminate consumer confusion about ‘what goes where’ (recycling, organics recycling or trash).

Each of these additional tools would go a long way to further encouraging and supporting those producers that embrace EPR and are generating products and packaging that are fully recyclable or compostable.