The Pay-In Model (PIM) uses all the data that has been obtained and calculates steward fees by allocating program costs to each Blue Box material based on:
- Determining the recycling rate of each designated Blue Box material by dividing the total tonnes of each material reported through municipal Blue Box programs by the total tonnes of designated Blue Box waste that is generated.
- Determining the net cost of recycling each designated Blue Box material by subtracting the revenue from the sale of each material type calculated from the gross costs to manage each material type.
- Allocating Steward financial obligation to municipalities to each material according to a ‘three factor formula’:
- 40 per cent of the cost of the program is assigned to each material category based on how much it costs net to manage each material in the system
- 35 per cent of the cost of the program is assigned based on the recovery rate achieved by that material
- 25 per cent of the cost of the program is assigned based on how much it would cost to manage the material if it were recovered at a rate of 60 per cent (only applies to materials achieving less than 60 per cent target rate)
The objective of the fee setting process is to share the cost of achieving the diversion target for Blue Box waste as set out by the minister among the stewards of all obligated materials. The current fee setting formula uses cost and recovery statistics to reward materials with high recovery rates while sharing cost equitably among all materials participating in the program. In effect, materials with lower recovery rates pay for part of the cost of recycling materials with higher recovery rates.