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Summary of Changes to the BBPP Steward Fee Setting Methodology

Waste Diversion Ontario (WDO) Board approves Recommended Changes to the BBPP Steward Fee Setting Methodology

NOTE: The Minister of the Environment approved the revised fee setting methodology on December 31, 2006 and that methodology was used to set the stewards fees for 2007 and forward.

The Waste Diversion Ontario (WDO) Board of Directors approved the Stewardship Ontario Board recommendations regarding the steward fee setting methodology on March 22, 2006. The Stewardship Ontario Board’s recommendations had been revised from those presented at the Stewardship Ontario, February 14, 2006 consultation meeting based on feedback received after the meeting.

A summary of the recommendations is provided below, and the following is a revised description of the fee setting methodology.
The WDO Board approved the recommendations and will forward the revised methodology to the Minister for approval.

Stewards should note that these recommendations relate to the methodology for setting fees in 2007 and in future years and DO NOT represent the recommended fees for 2007. Fees for 2007 will be set in August/September 2006, when all of the necessary system recovery and cost data have been compiled.

It also should be noted that the reporting requirements of stewards under the BBPP are not affected by these revisions. Stewards will continue to report data for the same categories of material.

Summary of Recommended Changes to the Fee Setting Methodology
Technical changes & general policy recommendations were approved as presented at the February 14 public consultation meeting:

  1. Improve accuracy of material-specific net costs by the changing way in which revenue & material prices are calculated
  2. Simplify Recovery Rate Factor calculation to replace statistical calculation with simplified calculation (same result, simpler steps)
  3. Provide an opportunity for a recycled-content credit program to be incorporated into subsequent annual fee setting calculations within the existing market development component of the fee setting formula. Stewards within material sectors would submit detailed plans for such programs for Stewardship Ontario approval
  4. Do not give exemption or credit for biodegradability
  5. Leave de minimis level as it is
  6. Leave allocation of common costs as it is
  7. Continue to calculate generation using waste audit data cross-checked against steward data
  8. Aggregate materials with similar characteristics (handling, revenue, etc.) for fee setting purposes. Treat “Like with Like”
    1. Printed Paper: 3 Partial Aggregations versus 5 current
    2. CNA/OCNA newsprint
    3. other newsprint
    4. OMG, OTD and Other printed paper
      1. Paper Packaging: 2 Aggregations versus 1 current
      2. OCC and OBB
      3. gabletop, paper laminants and aseptic
    5. Plastic Packaging: 3 Aggregations versus 1 current
      1. PET
      2. HDPE
      3. Plastic film, plastic laminants, polystyrene and other plastics

 

There was strong support for this principle, although concerns were expressed regarding fee impacts and for some materials many challenges to improve recycling rates of some materials were highlighted.

Stewards should note that these recommendations do not change the way in which stewards report their data. There are NO additional requests to the reporting requirements of stewards.

Given the mixed views regarding the shift in factor weightings, with strong views for and against, the Board’s recommendation is:

  1. Implement technical and aggregation changes (presented at the February 14 consultation) as summarized above
  2. Keep current 40/40/20 Factor Weightings for 2007
  3. Consider future proposals for a Recycled Content Credit within material categories
  4. Continue efforts through E&E Fund and Plastics Market Development Fund to improve the efficiency and effectiveness of plastics recycling
  5. Begin to address the range of plastics generated by stewards including the 95 percent of ‘other plastics’ that find their way into the municipal garbage stream
  6. Continue “directional” change by adjusting weightings for 2008 to 35/40/25, and
  7. Review progress in system and need for further change

The proposed fee calculation model posted to compare the results of the recommended steward fee setting methodology to the methodology used to set the 2006 fees has been updated to reflect the recommendations approved by the Stewardship Ontario Board of Directors and the WDO.

The WDO Board agreed to forward the revised fee setting methodology to the Minister for approval.

It also requested that Stewardship Ontario report to the WDO Board on a semi-annual basis on:

  • Implementation of the Recycled Content Credit within material categories
  • Efforts under the E&E Fund and Plastics Market Development Fund to improve the efficiency and effectiveness of plastics recycling
  • Activities to address the range of plastics generated by stewards including the 95 percent of ‘other plastics’ that find their way into the municipal garbage stream

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