Coming to Grips with the Economic Impact of
by David McRobert, Policy Coordinator, Waste Reduction Office,
One of the most important political issues that has arisen in Canada in the past few years is the social and economic impact of moving to an economy based on extensive use of secondary resources (or recycled materials). The importance of the issue was highlighted in the summer of 1990 when a leaked memo prepared by the Canadian pulp and paper industry for the federal government suggested that the government should fight recycled content regulations being developed in the U.S. because of their potential impact on the Canadian industry.
The issue of the economic impact of 3Rs programs has special significance in Ontario, and in other provinces in Canada, because most provincial governments and northern communities have historically based economic development strategies on the extraction of staples resources such as minerals and forests.
In February 1991, the Ontario government made a strong commitment to implement an accelerated 3Rs program called the Waste Reduction Action Plan (WRAP). The full implications of this commitment are not completely understood.
With the implementation of more stringent laws and regulations governing source separation of waste in Canada, and in other industrial nations, the demand for mineral and forest resources from Canada will inevitably decline. It is imperative that governments in Canada begin to develop measures to cope with the impact of this trend.
To illustrate the implications of this trend, the challenge that 3Rs activities poses to Ontario's forest industries, and to northern communities where those industries are based, will be examined. With this backdrop, an effort will be made to describe alternative approaches to sustainable economic development in the north for the 1990s and beyond, and explore the role of 3Rs programs in this development process.
Coming to Grips with
the Economic Impact of 3Rs Programs:
A Preliminary Assessment
One of the most important political issues that has arisen in Canada in the past few years is the social and economic impact of moving to an economy based on extensive use of secondary resources (or recycled materials). Unfortunately, few analyses of waste reduction, re-use and recycling (3Rs) initiatives undertaken by policy-makers, academics and environmentalists in Canada have dealt with the nature and extent of the economic restructuring process that increased 3Rs activities, and other environmental projects, will necessitate.
At one level, it is understandable that environmental groups tend to down-play or even ignore these impacts; one of the fundamental contentions of most environmental groups is that primary resource extraction is subsidized through a variety of government grant-giving and taxation mechanisms and these subsidies have deterred recycling efforts in many industrialized countries including Canada. Environmentalists also have long contended that these subsidies have helped to build a distorted economic system, one which generates massive environmental and social costs and consumes vast quantities of fossil fuel resources which are contributing to problems such as global warming. Indeed, dismantling this system of subsidies, and reallocating some of the money to other, more environmentally-friendly initiatives, is an article of faith for most environmentalists.
What seems more perplexing, however, is the relative lack of attention these impacts have received from government policy-makers in Canada in the past twenty years. Canada and many other nations, which have encouraged exaggerated, unsustainable rates of staples resource development, are particularly vulnerable to the impact of the restructuring process related to 3Rs activities. This vulnerability was highlighted in 1990 when a leaked memo prepared for the federal government by the Canadian Pulp and Paper Association suggested that the government should fight recycled content regulations being developed in many jurisdictions in the U.S. because of their potential impact on the Canadian forest industry. Since then, the industry has publicly criticized U.S. legislation on recycled content for newsprint, which was developed by many state governments to increase recycling of newsprint, reduce energy consumption and conserve landfill space, on a repeated basis. A similar concern about prospective U.S. metal recycling laws, and its potential impact on Canada's mining industry, has been expressed by Adam Zimmerman, the Chief Executive Officer for Noranda Incorporated, one of Canada's largest mining companies.
More recently, the dilemmas posed by increasing resource conservation have received more attention from politicians in the Greater Toronto Area (GTA) in southern Ontario. For example,
the potential impact of a proposed City of Toronto recycled fibre content by-law on the operations of a newsprint mill in a northern Ontario community convinced some Toronto city councillors to delay its implementation, even though the crisis in waste disposal capacity that originally prompted introduction of the by-law has not disappeared.
This paper is a preliminary exploration of the impact of 3Rs programs on economic restructuring in Canada, drawing primarily on experiences in Ontario. It is argued that the economic restructuring process now under way in response to environmental concerns presents an important opportunity to both re-evaluate historic economic development patterns in Canada, and implement more sustainable future economic development options.
The Historical Context
Perceptions of abundant renewable and non-renewable resources have played an important role in economic development in Canada in the past one hundred years. As economic historians like Harold Innis  and Mel Watkins and geographers like Peter Usher have demonstrated, many senior (i.e. provincial, federal and territorial) governments have historically promoted the extraction of staples resources such as minerals and forests as the basis for economic development.
This policy had strong appeal to senior governments in Canada for at least three reasons. First, royalties paid by companies involved in forestry and mineral operations generated significant revenues for successive provincial governments over the course of the past century. Indeed, federal and provincial tax laws were structured so as to encourage rapid resource development in these industries. The reluctance to alter development agreements with industry because of the royalty streams paid to provincial governments probably resulted in many decisions on forestry and mining development which many people can now regard, with the wisdom of hindsight, as inappropriate.
Secondly, most provincial politicians appear to have subscribed to the view that staples resource extraction incentives present a vital opportunity for a strong natural advantage (in the Ricardian sense) in the international economy; witness the development of Ontario industrial strategy as described by Nelles. . Arguably, many contemporary provincial leaders in Canada continue to advocate this approach to economic development, although they are not always explicit about the environmental externalities associated with their pet mega-projects.
Thirdly, most provincial leaders have implicitly understood that the First Nations and rural peoples negatively affected by the staples resource projects in hinterland regions have often been unable to effectively resist and fight the social and environmental aggression imposed on them by powerful corporate interests and the state. In particular, there is evidence that, in their fervour to develop primary mineral and forest resources, many provincial governments have ignored, and continue to ignore, the interests of First Nations peoples living on or near lands where the various hydro-electric, mining and forestry projects have been proposed.
One of the first Canadians to recognize the environmental and social aspects of this approach to economic development, and the exploitive relationship between southern cities and the hinterland regions of Canada was Tom Berger, a former B.C. Supreme Court judge who conducted an extensive inquiry into the construction of a pipeline through the Mackenzie Valley in the Northwest Territories for the federal government in the 1970s.  His report on the impact of the pipeline recognized a fundamental duality in Canadian society: the north is both a homeland for northerners and aboriginal peoples and a frontier for the residents of southern Canada. At the same time, Berger recognized that a fundamental shift in the way Canadians used resources must precede any fundamental resolution of the conflict between metropolitan and frontier regions in Canada.
The challenge that Berger posed is to develop and implement an environmentally sustainable approach to economic development in Canada, one that transcends the duality of the frontier and the metropolis. Since Berger's pioneering work, some Canadian academics and environmentalists have attempted to argue that one of the important steps in this kind of development process is the fostering of a conserver society in Canada. However, senior governments in Canada have been reluctant to develop and implement measures to promote a conserver society. One of the few senior governments that has taken some steps is the territorial government in Yukon.  Another senior government in Canada which has initiated a series of regulatory measures intended to promote development of a fledgingly conserver society is Ontario's NDP government elected in September 1990. 
One of the areas where Ontario's NDP government has been most active is simultaneously reforming laws and policies on 3Rs and decreasing the relative emphasis in current laws, regulations and policies on "safe disposal" of solid waste. The driving forces behind the new government's 3Rs program are the stark reality that landfills in the province are filling up rapidly and the province will soon face a serious shortfall in disposal capacity, and the fact that the siting of new landfills in the province has become extremely time-consuming.
Ontario's Waste Reduction Office
In February 1991, the Waste Reduction Office (WRO) was established by the Ontario Minister of the Environment, the Honourable Ruth Grier, to develop and implement strong new laws, regulations, policies and programs to promote waste reduction, reuse and recycling (3Rs) activities in Ontario. The mandate of the WRO is to coordinate and facilitate the transformation of Ontario into a conserver society where 3Rs activities are an essential part of daily life. To integrate 3Rs activities into the fabric of life in Ontario, the WRO will work cooperatively with all stakeholders in 3Rs and waste management activities and consult widely with the Ontario public on future policy development.
The mission of the WRO is to ensure, based on 3Rs activities, that at least 25 percent of the municipal solid waste (MSW) and industrial, commercial and institutional (IC&I) waste produced in Ontario is diverted from disposal at landfills and incinerators by 1992 and that at least 50 percent of waste is diverted from disposal by the year 2000. In support of the goal of promoting 3Rs and discouraging expensive, high-technology disposal options, the Minister announced a ban on long-distance transportation of solid waste to Kirkland Lake on March 21, 1991 and a ban on construction of new MSW incinerators on April 11, 1991.
The Waste Reduction Action Plan (WRAP)
The centerpiece project of the WRO's activities is further development and implementation of the Waste Reduction Action Plan (WRAP) announced by the Minister of the Environment on February 21, 1991. The intent of the WRO is to implement major parts of the regulatory component of the WRAP in 1992.
The WRAP is based on the following four elements: strong regulatory measures; development of financial and technical systems in support of 3Rs activities; development of a comprehensive public education programs to provide information, training and technical assistance on waste reduction; and encouragement of market development for secondary materials. The strong regulatory measures in the WRAP include:
- mandatory blue box recycling programs for all but the smallest municipalities; 
- mandatory waste audits and waste reduction plans for major users of packaging by 1992;
- waste audit requirements for other major industrial, commercial and institutional sectors by 1992;
- source separation and composting programs in most municipalities for leaves and yard waste;
- mandatory source separation of waste materials at retail malls, office complexes, schools, hospitals, hotels, larger restaurants, larger manufacturing facilities and other facilities;
- streamlined approvals for new 3Rs facilities; and
- accelerated programs to promote 3Rs activities within the Ontario government.
Specific aspects of these measures are outlined in a discussion paper called Initiatives Paper No. 1 released by Minister Grier on October 9, 1991. 
Enabling legislation amending Ontario's Environmental Protection Act to implement the WRAP regulations is contained in Bill 143, the Waste Management Act. This bill was tabled in the legislature in October 1991, and after strong attacks on the bill by the opposition parties in the Legislature, many municipalities, the three largest multi-national waste management companies (i.e. Laidlaw, Browning Ferris Inc., and Waste Management Inc.) and some key interest groups, the bill was sent to the Standing Committee on Social Development for public hearings and review between January 1992 and April 1992.
Critics of Bill 143 argued that the decision to integrate new policies such as the incineration ban and the ban on long distance transportation of waste to Kirkland Lake in the legislation was a serious mistake. They also complained about amendments to the Environmental Protection Act in the Bill which granted the provincial government additional regulatory powers on waste management were inappropriate. After significant amendments to the Bill were made during clause-by-clause analysis, the Act was proclaimed on April 27, 1992, and came into force immediately.
Three other discussion papers flowing out of the original commitments made in the WRAP have been released in 1992. Initiatives Paper No. 2, which was released on March 31, 1992, proposes several significant changes to waste management planning to put more emphasis on waste reduction.  It was released together with a paper developed jointly by the WRO and the Ministry of Municipal Affairs (MMA) dealing with reforms to provincial laws and regulations on municipal waste management powers. Both papers were the subject of joint MOE/MMA consultations with affected stakeholders between April and June 1992.
In June 1992, the MOE released Initiatives Paper No. 4, which deals with development of standards for measuring waste diversion. In the Fall of 1992, or in early 1993, the MOE plans to undertake consultations on development of a sound financing system for 3Rs and waste management. A series of "strategy teams" made up of affected stakeholders have been formed to encourage market development for recyclables, compost products and reusable materials have been under way since early 1992. Other projects and initiatives will be developed in 1993 based on the outcome of ongoing public consultations and the ongoing policy development work of the WRO.
The implications of a waste management system based on the WRAP regulations, and the various reforms which are outlined in the papers outlined above, are still being analyzed and debated. However, the Minister of the Environment has made clear in her speeches that one of her goals is to begin to restructure Ontario's economy along the lines of the conserver society model first developed by the Science Council of Canada in the mid-1970s, and to move away from an economy based on growth to one based on the development of individuals, and societies. Although transforming Ontario into a conserver society may not be priority for all members of Cabinet, particularly those members with responsibility for promoting economic growth, the Premier and other influential members of Cabinet have expressed strong support for Minister Grier's efforts to promote the 3Rs in Ontario.
Economic Restructuring and 3Rs Activities
There can be little doubt that economic restructuring related to 3Rs activities has been under way in Canada for several years now. One of the clearest examples is provided by the shift to non-refillable containers for soft drinks encouraged by the implementation of the "Pop Can" regulations under the Ontario Environmental Protection Act in 1985. Although precise data is unavailable, the regulations have resulted in the closure of dozens of bottling operations, and the loss of hundreds of jobs that were associated with them, over the past six years. At the same time, many jobs have been created for workers doing curb-side source separation and managing recycling programs when the Blue Box program was started.assume that a large portion of these expenditures were made to employees operating the Blue Box program. Whether the trade-off between re-use and recycling should have been made is debatable, but it seems irrefutable that a more complete study of the alleged benefits and high costs of recycling non-refillable pop containers in the Blue Box program should have been undertaken, and tabled for scrutiny by all stakeholders, before the final decision was made.
In the same way that the implementation of the Blue Box program has produced some job losses, restructuring of the Canadian economy as a result of increased 3Rs activities will have negative social and economic impacts all over Ontario in the next decade. Many of the impacts can be predicted, but others cannot be anticipated. Even so, it is already clear that the impact of restructuring in response to 3Rs activities, and a shift to an economy based on reprocessing of secondary materials, will be greatest in those communities which extract primary resources.
Assessing the Economic Impact
Forecasting is always a risky business and subject to dispute, as most futurists point out. However, in this case there can be little doubt that the implementation of more stringent provincial laws and regulations governing source separation of waste will reduce demands for many virgin resources, and it is inevitable that certain northern communities will be hurt more by this shift than others.
One recent study for the Ontario government suggests that between 2-3 percent of direct jobs in northern industries could be lost because of the implementation of the regulatory measures outlined in Initiatives Paper No. 1, and that indirect spin-off jobs related to these primary extraction will also be lost.
However, the impact of 3Rs initiatives will not be confined to reductions in demand within Ontario and Canada; thus, industry sources offer more dire warnings. The Canadian Pulp and Paper Association (CPPA) has claimed that once paper recycling programs are fully rolled-out in many North American and European jurisdictions, the economic impacts and job losses will be much greater, and has tried to make a case for delaying or scrapping recycled content regulations and laws in the U.S. and Canada.
According to some environmentalists, the problem is that the CPPA and other industry supporters have been blind to a shift to recycled paper products over the past ten years. In the 1970s, the U.S. bought between 60 and 65 per cent of its newsprint from Canadian operations; by 1990 this amount had dropped to about 53 per cent. While the need to meet new recycled content rules is only one factor in this decline in demand for raw newsprint from Canada, it is clear that the shift in the pulp and paper industry's source of raw materials from virgin forest stands to urban centres will have dramatic impacts on the Canadian industry. In addition, the CPPA worries that recycled content regulations will soon become a pretext for giving U.S. companies an unfair advantage in the marketplace because of their more ready access to recycled newsprint in large U.S. centres.
How should this process of economic restructuring be viewed? Perhaps the best way to understand its long-term social implications is by analogy. When synthetic rubber was identified and developed, many communities in Brazil which were involved in the production of natural rubber were devastated. However, few people would say in retrospect that synthetic rubber should never have been developed.
A similar argument applies to the assessment of the impact of the greening of technology, and the implementation of more rigorous standards on source separation of used materials, recycling and composting. Canadians, who have one of the highest per capita waste generation rates in the world according to recent OECD figures, must begin to see the production of massive quantities of solid waste as poor management of valuable and usable resources. According to this view, preservation of jobs in environmentally-destructive industries cannot be a rationalization for extraction of resources and materials which are used once and then landfilled. Moreover, the implications of short-term job losses in the extraction of resources must be assessed and evaluated together with the substantial gains in resource management, energy conservation and conservation of landfill space which will flow out of recycling programs in Canada and other industrial nations.
To deal with the needs of those people who will be impacted by these policies in the short term (i.e. 2-3 years), all levels of government put into place labour adjustment policies and programs. It will be necessary to improve and increase funding for retraining programs, research and development initiatives and strategic investment in certain projects. In the long term, a combination of tax measures and other initiatives might be necessary to provide northerners with sufficient resources to undertake alternative economic development projects.
The challenge that increasing 3Rs activities and tougher environmental standards pose to Ontario's forest industries, and to northern communities where those industries are based, provides a stark example for the purposes of this analysis. At present, the Canadian pulp and paper industry employs a workforce of 120,000. It has been predicted that the industry could see a net reduction of 25 per cent in its current workforce as a result of the permanent restructuring because of lower demand for traditional products such as newsprint. Similarly, it is expected that demand for standard grade lumber will decline, and this will have negative impacts on smaller saw mill operations.
These problems are compounded by the growing pressure on the Canadian industry from both environmental groups and government regulators to reduce toxic discharges into Canadian rivers and lakes. As export markets decline in the face of pressure to reduce toxic emissions from older pulp and paper plants and to increase paper recycling, the demand for Canadian pulp and paper resources will decline dramatically. Consequently, many northern and rural Canadian communities could be devastated.
If the forest industry is facing a crisis, and the evidence of a crisis is growing, it is arguable that the root of the crisis is that the federal and provincial governments have yet to develop a viable industrial strategy for Canada, and to increase value-added production. In Canada, an average of one job per hectare of trees cut is created by the forestry industry. In contrast, the rate of job creation in many European countries is around ten jobs per hectare. Switzerland creates nearly 12 jobs for every hectare of trees cut. Some of these jobs are related to more labour-intensive logging practices (such as selective logging and shelter-wood harvesting), and the fact that most European nations spend more money on, and dedicate more staff to, forest management. Many of these additional jobs in Europe are related to the manufacturing of value-added wood products.
The relatively low Canadian rate of job creation suggests that a new approach to forestry development is required. In addition, new attitudes about forests, and the resources they produce for us. The lack of a clear industrial policy to encourage more value-added production in the Canadian forest industry is a defect in Canada's political and economic fabric which will have massive implications for many northern regions in Canada in the 1990s.
To implement an approach to forestry which would provide a basis for a more environmentally-sustainable forest industry in Canada, at least three things should be done by provincial and federal governments:
1) Canadian governments must promote more innovative harvesting techniques like selective logging and shelter-wood harvesting and improve forest management techniques. Based on experience in other nations, it is clear that a shift to more sustainable forestry practices based on modified logging techniques would create thousands of new jobs. This would make the cost of trees more expensive but it would encourage a more sustainable approach to forestry.
2) Canadian governments must develop new policies on value-added production in the forest industry.  Rather than almost exclusively emphasizing production of vast quantities of pulp and paper for newsprint or exporting semi-processed wood products, Canadians could be building more furniture, cabinets, wooden doors, prefabricated buildings, mobile homes and other value-added wood products such as musical instruments or toys.  This would require retraining of thousands of workers, and restructuring of the forest industry, but the overall trend would be to produce more durable goods that are almost never or only rarely landfilled. The attractiveness of such an approach to forestry development in an area like Temagami in northern Ontario would be enormous.  At the same time, this kind of approach would be a complicated endeavour, which is why several government ministries would have to work on this kind of undertaking together.
In sum, governments in Canada must develop a strategy to improve the performance of the wood products industry over the next decade so that less emphasis is placed on pulp and paper production and a more diversified range of alternative wood and higher quality paper products are developed. This point was made in blunt terms in a 1989 report prepared for the Ontario government by the Premier's Council called Competing in the New Global Economy:
The Ontario [forest] industry ... is technologically backward (60 percent of its machinery was installed before 1930) and operates almost exclusively in the lower value-added end of the product spectrum. Producers from other countries dominate the higher value-added specialty paper markets, and low-cost competition from Brazil and elsewhere may soon threaten the Canadian industry's dominance of traditional markets.... [U]nless ways can be found to diversify and upgrade the industry's product mix, its future prospects are less than encouraging.
3) Canadian governments must involve northern communities and northern industries in making the transition to a more sustainable model of forestry development. Work that has been done on "community forestry" in Ontario by the Forests for Tomorrow Coalition for their intervention before the Timber Management Class Environmental Assessment Hearings could inform this process. B.C.'s Tin Wis Coalition also has offered some important ideas on extending and improving community control which should be considered.contains an important discussion on how to increase value-added production in the forest industry.
There are other policy measures which should be carefully assessed. For example, it will, no doubt, be tempting for Canadian governments to try to devise schemes to preserve jobs in the pulp and paper industry by encouraging the long-distance shipment of recycled newsprint to mills in single-industry towns. However, this approach should be viewed as only stop-gap measures. Moreover, there is a risk that Canada would become a repository for the vast quantities of sludge produced in recycling newsprint, which would put even more pressure on landfills near deinking plants. The broader environmental and social forces pushing for increased recycled content by maximizing paper recycling in urban forests, and processing that paper near the urban centres where it is generated, will have to be reckoned with in the long term.
Similar kinds of impacts as those described for the forest industry above seem likely to eventually transpire in the mining industry in Canada. However, it is unclear as to whether any jurisdictions in North America will pursue recycled content regulations for metals anywhere comparable to those which have been developed for newsprint recycling.
In sum, it is argued here that adjustments to 3Rs programs must be achieved by making products that are more durable and possess greater value-added content. Increased 3Rs activities in North America already have produced some job losses in Canadian communities, and the worst is yet to come.
Exploring More Sustainable Opportunities
To explore opportunities related to great value-added production in Ontario's north, the Ontario Minister of Northern Development and Mines, the Honourable Shelley Martel, established the "SCAN North" public consultation process on October 28, 1991. This consultation process will examine issues and economic development options in five areas: 1) value-added activity in the forest industry; 2) value-added activity in the mining industry; 3) waste management and recycling in the north; 4) support for small business and native entrepreneurs; and 5) native economic development and the private sector. A variety of different forums and consultation mechanisms will be employed, and it is hoped that the results of this work will mesh with the policies on waste reduction and pollution prevention being developed by the MOE.
A SCAN North discussion paper on value-added production in the forest sector was released in April 1992. Preliminary results of a consultation process based on the discussion paper show that
interest in value-added production in the forest industry is substantial, and many reforms intended to encourage a shift to value-added production have already been proposed.
Another area where shifts in government policy must take place is retraining of workers. The federal government spends millions of dollars each day, raised through levies on employers and on paid workers, to support unemployed workers. At the same time, very little money is spent on worker retraining, and this situation compares unfavourably with initiatives on worker retraining being undertaken by many European nations. The Ontario government has recognized that the current situation must change quickly, and has established a new Ontario Training and Adjustment Board to facilitate policy development in this area.
The Ontario government also has identified the development of
"green industries" as a strategic priority, and wants to encourage further development of Ontario's environmental protection industry.
To this end, the Ontario Ministry of Industry, Trade and Technology
is working with the MOE on several new projects related to development of 3Rs infrastructure in Ontario. One of the goals of the Waste Reduction Office is to encourage development of green industries which manufacture new products using the large amounts of source-separated materials which will be generated as the WRAP is implemented. Some of these green industries might develop in the north, and one of consultations programs under the SCAN North initiative will be examining the economic opportunities for northern communities and entrepreneurs that may flow out of implementation of enhanced 3Rs activities in northern Ontario.
For example, some plastics researchers claim there may be exciting opportunities to develop new technologies which produce composites of wood fibres and recycled plastics. Competition in high-volume plastic markets for housing, furniture, cabinetry and packaging products has sparked renewed interest in the search for composites that offer a new balance of product quality, performance and cost. Wood fibre is of particular interest to plastic companies because of its relatively low cost, low density, and high strength-to-weight ratio. If markets for these materials develop, then recycled plastics collected in the north, when combined with abundant supplies of northern pulp and paper supplies, could help to establish this kind of industry. Imported plastics from the south could support this kind of manufacturing enterprise as well. With slight shifts in government policies, the opportunities for northern communities to benefit from this kind of technological opportunity related to 3Rs could be significantly increased.
To make alternative economic development projects viable, there is a need for research and development (R&D) in several areas, especially in the new area of environmental technologies. Ontario already has benefitted greatly from new environmental technologies. To date, federal programs have seemed even more dismal, but recent announcements suggest the federal government appears to have recognized that important technological development opportunities from environmental programs and policies are emerging in the 1990s.
If significant resources are dedicated to the task of fostering appropriate R&D activities in support of sustainable economic initiatives for the 21st century, then the prospect of Canada emerging as a leader in this area is reasonable.
However, current patterns of investment in R&D suggest that neither governments nor industries have begun to appreciate the implications of the economic restructuring in Canada, the U.S. and other industrial nations. If these R&D investment patterns continue, then economic restructuring in Canada in response to 3Rs activities in Canada and other industrial nations will be much more painful than it need be.
Garbage Import Mega-projects
The viability of long-distance transportation of MSW to northern Ontario is an issue that has gained some attention in recent years, partly because it has been suggested that garbage export mega-projects can "save northern Ontario". On this basis, politicians and community leaders in numerous northern Ontario communities, including Kirkland Lake, Ignace and Kapuskasing, have, for the past two or three years, expressed interest in becoming "willing hosts" for waste management facilities such as landfills or incinerators which would accept waste from southern Ontario communities such as Metropolitan Toronto. Proponents of the projects believe that importing garbage for recycling and disposal could become a "quick fix" for northern economic development woes although the evidence to support this claim is weak, and the impact these schemes would have on 3Rs in southern Ontario would be substantial.
After consultation with many affected parties in the fall of 1990 and early 1991, Minister Grier announced a policy favouring local disposal of solid waste in March 1991. In a statement to the legislature on the issue, Grier said that "to ship waste far away from its source is counter-productive and could encourage "an out-of-sight, out-of-mind" attitude." Grier then directed the Interim Waste Authority, the crown corporation she had established in November 1990, to initiate a landfill site search process for three GTA site search areas (Peel Region, Durham Region and the combined regions of Metropolitan Toronto and York) within the GTA. Thus, export of municipal solid waste by upper tier municipalities such as Metropolitan Toronto outside the GTA has been prohibited.
The main implication of this decision was a ban on long-distance transportation of solid waste to the Adam's Mine site about 10 miles outside of Kirkland Lake. Access rights to the old mine site had been purchased by Gordon McGuinty, an Ontario-based entrepreneur, and he stood to reap between 10 and 30 million dollars from an agreement he had helped to arrange between Metropolitan Toronto Council and three local municipal councils near the abandoned mine site. The decision also recognized that there would a clear conflict between garbage export from a region and the development of a sustainable infrastructure for waste management and 3Rs activities in that region. Moreover, estimates prepared by the MOE suggest that only 200-300 jobs would be created in northern Ontario, and that several thousand new jobs related to processing and manufacturing in southern Ontario might be lost as a result of the Kirkland Lake project.
Despite the ban on long-distance solid waste transportation, there is nothing in place which will prevent northern communities and northern entrepreneurs from importing source-separated materials for manufacturing activities. It seems likely that many northerners, when asked to choose between importing source-separated materials for manufacturing, or importing mixed garbage with limited economic value, would prefer to import the used source-separated materials. However, shipping recyclables materials back and forth will require ongoing consumption of large amounts of fossil fuels, and the release of various air emissions on combustion of these fuels (e.g. carbon dioxide, sulphur dioxide) will contribute to another environmental problem -- global warming. Thus, there may be good policy reasons to discourage large-scale transportation of recyclables to the north even if a wide array of material processing facilities could be established in the north.
Some Unresolved Issues
One of the outstanding concerns which remains to be addressed is the extent to which Ontario's efforts to promote waste reduction will be thwarted by trade agreements such as the Free Trade Agreement (FTA) with the United States. It is clear that efforts to promote the 3Rs, and to increase value-added production in the forest and mining industries, will be complicated by trade agreements. While value-added production is logical, this approach to economic development may only succeed if coupled with campaigns which urge Canadians to purchase Canadian goods and services. However, under the terms of the FTA, governments in Canada may be restricted in developing progressive measures to promote Canadian goods and services, and to implement legal and regulatory measures to promote R&D and establish new green industries.
The nature of the conflict between waste reduction objectives and trade laws is highlighted by the trade war over beer pricing between the United States and Canada which was formally started on July 24, 1992. One of the reasons that U.S. brewers pressed the U.S. Office of the Trade Representative to retaliate against the Ontario government is that Ontario Treasurer had expanded its environmental levy on non-refillable alcohol containers to ten cents (from five cents) in the 1992 Budget Statement. This measure, which is intended to encourage consumers and manufacturers to shift to refillables, is opposed by U.S. brewers because they package their beer in aluminum cans. However, the measure is also intended to protect Ontario's refillable infrastructure for beer. Evidence from other jurisdictions suggests that beverage industries tend to phase out their use of refillables unless regulatory measures are put into place to encourage their use.
An enormous push for centralization is likely to characterize economic restructuring in response to the 3Rs, and this is likely to create tensions between northern and southern communities. This centralization process is likely to result because large-scale projects for new green industries are likely to be proposed near large cities where the recyclable feedstocks are generated. There may also be a tendency for large corporations with access to better capital financing to influence the project options examined. It will be essential to devise mechanisms which will allow communities and non-profit organizations to benefit from restructuring and develop co-operative projects. Public involvement must be encouraged, and appropriate training to foster sufficient entrepreneurial skill must be provided. New mechanisms for financing smaller projects in hinterland areas also will be required.
One option which has been proposed to encourage value-added production in the north given the limited size of markets there, and the reality of high transportation costs to markets in the U.S., is the encouragement of small companies and informal partnerships between major and small companies. Thus, it will be essential to re-examine the relevance of the ideas on import substitution and local economics developed by E.F. Schumacher in his classic book Small is Beautiful, and the concept of bio-regionalism articulated by some environmentalists.
Another option which has been proposed is subsidization of transportation of some recyclables to the north. As noted already, it is conceivable that many thousands of tonnes of old newsprint will be shipped to northern communities for recycling so that the forest products industry can meet recycled fibre content regulations being developed in many export markets. This is already happening in Ontario; several northern mills are importing old newsprint from the U.S. and southern Canada to increase the recycled content in their product. Obviously, transportation costs will be a factor in the long term; it may be desirable to subsidize northern mills in the short term to allow some of these mills to adjust to the pressure associated with these costs. The alternative which some industry spokespeople have proposed, to fight recycled content regulations in many jurisdictions, seems futile and counter-productive.
Even if appropriate policy alternatives can be developed and implemented, it is apparent that overall rates of economic growth will decline, and it seems likely that major reorientations in the Canadian economy will transpire.
Increasing 3Rs activities will have significant economic impacts in Canada, especially on single-industry communities extracting primary resources. It is essential that provincial governments, and the federal government, make sure that the concerns of impacted communities are not ignored, and that proposed adjustment measures do not become after-thoughts tacked onto social and environmental initiatives conceived and implemented in southern and urban regions. Northern communities, entrepreneurs, labour unions, federal government representatives and provincial officials must collaborate to ensure that appropriate adjustment mechanisms and strategies are put into place.
One of the key conclusions of this study is that value-added production must be increased in the forest industry. As pointed out above, the pulp and paper industry is facing a massive crisis because Canadian companies will never be able to obtain sufficient recycled fibre to meet recycled content regulations being developed in the U.S., and Canadian mills will be unable to compete with mills based in the U.S. with closer access to the "urban forests" where forty to fifty percent of the raw materials for future pulp and paper products will come from.
The alternative to increasing value-added production in the forest industry could be economic devastation for many communities. As energy prices increase in the next decade in the face of pressure for carbon taxes and other measures to reduce the threat of global warming and to control air pollution associated with fossil fuel use, it seems inevitable that all new pulp and paper mills will begin to rely primarily on recycled newsprint from "urban forests" as a primary feedstock for making new product, and that they will be built closer to urban centres.
There is no doubt that the adjustments ahead will require significant collective effort. However, collective endeavours of the past such as the reconstruction of post-war Europe and Japan in the wake of the Second World War have shown that with sufficient vision, societies can devote significant resources to important and challenging tasks. The challenge is to recapture that kind of vision, and to ensure that the costs and the benefits of increasing 3Rs activities are shared by all residents of Canada.
David McRobert co-ordinates several policy and regulatory projects related to 3Rs activities for the Waste Reduction Office in the Ontario Ministry of the Environment. He holds a B.Sc. in Biology from Trent University, a Masters in Environmental Studies (M.E.S.) from York University, and L.L.B. from Osgoode Hall Law School. Before joining the Waste Reduction Office in July 1991, David coordinated research on waste management and global warming at Pollution Probe in Toronto, Ontario.
 This paper does not necessarily represent the views of the Waste Reduction Office (WRO) of the Ontario Ministry of the Environment. Some of the research for this paper was undertaken while the author was working on Northern Projects for the WRO. An early version of this paper was presented to the session titled "Economic and Social Impacts of Moving to a Secondary Resource Economy" at Sharing the Challenge: Turning Vision into Reality, the annual conference of the Recycling Council of Ontario, Toronto Ontario, October 10, 1991.
 One recent publication which examines this issue is M. Renner, Jobs in a Sustainable Economy, Worldwatch Paper No. 104 (Washington: Worldwatch Institute, 1991).
 On this theme, see J. Young, Discarding the Throwaway Society, Worldwatch Paper No. 101, (Washington: Worldwatch Institute, 1991).
 For a stark analysis on this theme in relation to the mining industry, see J. Young, "Mining the Earth", State of the World 1992, (Washington: Worldwatch Institute, 1992).
 D. Bueckert, "Protectionism may motivate standards", The Globe and Mail, October 9, 1991; T. Corcoran, "Risk of Trade of War Wrapped in Recycled Newsprint, The Globe and Mail, June 27, 1990.
 T. Corcoran,"Risk of Trade war Wrapped in Recycled Newsprint", supra note 4.
 "City eases recycling targets: Newspapers, northern paper workers get 1-year reprieve", Toronto Star, February 25, 1992. The by-law would have required a stringent 50 per cent quota on recycled fibre content in newspapers sold from vending machines on City of Toronto street corners. The councillors felt that the impact of the quota on some older northern forestry mills in one-industry, northern Ontario towns would have been devastating, particularly during the current recession.
 On this theme, see: M. Zaslow, The Opening of the Canadian North, 1870-1914 (Toronto: McClelland and Stewart, 1971); and L.-E. Hamelin, Canadian Nordicity: It's Your North, Too. Trans. W. Barr. (Montreal: Harvest House, 1979).
 H. A. Innis, "The Canadian North", University of Toronto Monthly, Jan. 1930, pp. 163-65.
 M. Watkins, "From Underdevelopment to Development", In: M. Watkins (ed.), The Dene Nation: The Colony Within (Toronto: University of Toronto Press, 1977). This analysis focuses on the Dene of the Northwest Territories but the approach has implications for all northern regions in Canada.
 P. Usher, "Staple Production and Ideology in Northern Canada" In: W. Melody et al., Culture, Communications and Dependency (Norwood, N.J.: Ablax Publishing, 1981).
 On this theme, see H.V. Nelles, The Politics of Development: Forests, Mines and Hydro-Electric Power in Ontario, 1849-1941 (Toronto: Macmillan of Canada, 1974).
 On this subject, see L. McQuaig, Behind Closed Doors: How the Rich Won Control of Canada's Tax System ... and Ended up Richer. (Toronto: Viking, 1987). As McQuaig shows, accelerated capital cost allowances and tax shelters were important features of the tax regimes.
 H.V. Nelles, supra note 12.
 T.R. Berger, Northern Frontier, Northern Homeland: Report of the MacKenzie Valley Pipeline Inquiry, Vol. 1, (Ottawa: Ministry of Supply and Services, 1977).
 A preliminary report on the process which serves as an excellent conceptual model on northern development is: Yukon Government, The Things That Matter: A Report of Yukoners' Views on the Future of Their Economy and Society (Whitehorse: Yukon Government, 1987). For a description of the launch of the Yukon project, and an assessment of its implications for environmental policy-making in Canada, see D. McRobert, "Attitudes about Sustainable Development in Yukon", In: P. Adams (eds.) Student Research in Canada's North, (Ottawa: Association of Canadian Universities for Northern Studies, 1988).
 Hon. Ruth Grier, Ontario Minister of the Environment, "The Road to a Conserver Society", Speech to the Ontario Waste Management Conference, June 17th, 1991. (Available in booklet form from the Public Information Centre, Ontario MOE, Toronto.)
 In February 1992, the MOE estimated that 62 landfills In Ontario are expected to close within one year, and another 65 will close between February 1993 and February 1997. See Standing Committee on Social Development, Ontario Legislature, "Response to Request for Information by the Standing Committee Prepared by the MOE, Question posed by Carman McClelland, Environment Critic for Ontario Liberals and Standing Committee member, January 20, 1992.
 The plannning, approvals and landfill hearings process under Ontario's Environmental Assessment Act has ranged between two and ten years in length over the past decade. The need to revamp the program was recognized when the Waste Reduction Action Plan was announced by the Minister of the Environment in February 1991. Some of the key problems with the process are being addressed in reforms to Ontario's waste management master plannning process outlined in Initiatives Paper No. 2, Waste Management Planning in Ontario, released by the MOE in March 1992.
 Honourable Ruth Grier, "Statement to the Legislature on Local Responsibility for Waste Disposal", March 21, 1991.
 MOE, "Minister Announces Ban on New Solid Waste Incinerators", News Release, April 11, 1991. In the press release, it is stated that incineration is inconsistent with 3Rs because the large amounts of capital required to build incinerators would be diverted from 3Rs. As part of the announcement, the Minister also stated that a review of standards for operating incinerators would be undertaken.
 The Honourable Ruth Grier, "Ontario's Waste Reduction Action Plan", Speech at a conference of Eastern Ontario Mayors, Wardens and Reeves, February 21, 1991, (Toronto: MOE, 1991).
 A population of 5,000 has been proposed as a threshold figure but this is not finalized.
 Waste Reduction Office, Ontario Ministry of the Environment, Regulatory Measures to Achieve Ontario's Waste Reduction Targets, Initiatives Paper 1. (Toronto: Queen's Printer, 1991).
 The Waste Management Act was tabled in the Ontario Legislature on October 24, 1991. For background on the statute, see: MOE, "New Waste Management Legislation Introduced by Environment Minister Ruth Grier", News Release, October 24, 1991.
 Waste Reduction Office, Ontario Ministry of the Environment, Waste Management Planning in Ontario, Initiatives Paper 2. (Toronto: Queen's Printer, 1992).
 Ministry of Municipal Affairs, Municipal Waste Management Powers in Ontario: A Discussion Paper. (Toronto: Queen's Printer, 1992). This paper is sometimes referred to as Initiatives Paper No. 3.
 Waste Reduction Office, Ontario Ministry of the Environment, Measuring Progress Towards Ontario's Waste Reduction Targets, Initiatives Paper No. 4. (Toronto: Queen's Printer, 1992).
 See, for example, the speech given to the Ontario Waste Management Conference, cited in supra note 18. See also: the Honourable Ruth Grier, "Statement to the Ontario Legislature on a Conserver Action Plan for Ontario", November 21, 1990, (Toronto: MOE, 1990).
 Science Council of Canada, Canada as a Conserver Society (Ottawa: Ministry of Supply and Services, 1977). For more background, see also: K. Valaskakis et al., The Conserver Society: A Workable Alternative for the Future (New York: Colophon Books, 1979).
 One of the best recent outlines on the nature of social and economic transformation needed is presented in H. Daly and J. Cobb, For the Common Good: Redirecting the Economy Toward Community, the Environment and a Sustainable Future. (Boston: Beacon Press, 1990).
 Ont. Regs. 622/85 and 623/85, as amended.
 For a description of the decision-making process, see Colin Isaacs, "Ontario's Pop Can Issue", Probe Post, Vol. 8(3), Feb. 1986. A critique of the process, and its results, is presented in J .Johnston, "Recycling of Non-Refillable Drink Containers: What is 50%", Unpublished Paper prepared for Innis College, University of Toronto, April 1989.
 It is difficult to estimate the exact number of jobs which have been created by the Blue Box program. However, municipal expenditures on operating recycling programs in Ontario in 1991 surpassed $65 million according to WRO estimates. It is safe to
 V.H.B. Research and Consulting Inc. and Econometrics Research Limited, "A Socio-Economic Assessment of the Ontario Waste Management Initiatives", Report submitted to the Ontario Ministry of the Environment, December 10, 1991; pp. 102-103.
 Many state governments in the U.S. and some European governments have developed laws and regulations to improve recycling rates by setting required recycled fibre content for newsprint. Although the regulations vary from government to government, the average figure of 40 per cent recycled fibre content probably accurately represents requirements in the U.S. market. See R. Haliechuk, "Recycled content rules will harm industry, paper makers warn", Toronto Star, December 13, 1992.
 Brian McClay, Director, Trade Affairs, Canadian Pulp and Paper Association, Paper presented to session titled "Economic and Social Impacts of Moving to a Secondary Resource Economy", Sharing the Challenge: Turning Visions into Reality Conference, Recycling Council of Ontario, Toronto, Ontario, October 10th, 1991.
 Canadian Pulp and Paper Association, Reference Tables included in paper by Brian McClay, supra note 37.
 Organization for Economic Co-operation and Development, State of the Environment. (Paris: OECD, 1991). This report suggests that Canadians have an annual per capita waste generation rate of 632 kg per person. In comparison, Americans have a rate of 864 kg per person per year, and most residents of European nations produce about 300-350 kg per person.
 For a global overview on the need to reform forest industry practices, see S. Postel and J.C. Ryan, "Reforming Forestry", State of the World 1991, (Washington: Worldwatch Institute, 1991); pp. 74-92.
 For background on this issue, see D. Macdonald, The Politics of Pollution: Why Canadians are Failing Their Environment, (Toronto: McClelland and Stewart Inc., 1991); Chapter 15 "Setting Standards for the Pulp and Paper Industry".
 K. Valaskakis, "Barriers to the Development of Canadian High-Technology Industries: Who is Responsible?" in: Ministry of State for Science and Technology, The Canada Tomorrow Conference: Commissioned Papers, November 1983, (Ottawa: Ministry of Supply and Services, 1984).
 This figure and the other figures cited in this passage are based on wood products and hectares harvested data as reported in World Resources Institute, World Resources, 1990-1991 (New York: World Resources Institute, 1990). The employment data for the nations were taken from United Nations Food and Agriculture Organization, Forest Products Yearbook 1988 (Rome: FAO, 1990); and Canadian Forestry Service, Government of Canada, Selected Forestry Statistics, Canada 1985. (Ottawa: CFS 1986).
 As indicated below, in October 1991, Shelley Martel, Minister of Northern Development and Mines, announced the establishment of a consultation program called "SCAN North" which will examine value-added production in several sectors of the northern economy.
 It is noteworthy that some wooden furniture products, like IKEA furniture, are very popular in Canada. At the same time, it should be pointed out that many IKEA products, although designed by Swedes, are manufactured using wood products from Russia and Polish labour.
 On this theme, see D. McRobert et al. The Temagami Crisis: A Critical Assessment and a Proposal for a Sustainable Future. A Report prepared for the Canadian Parks and Wilderness Society (CPAWS). (Toronto: CPAWS, 1988).
 Premier's Council, Ontario Government, Competing in the New Global Economy (Toronto: Premier's Council Secretariat, Ministry of Industry, Trade and Technology, 1988 and 1989). Quote is from the Report in Brief, p. 6.
 The Coalition intervened in the Environmental Assessment Board Hearings on the Timber Management Class Environmental Assessment Proposal put forward by the Ministry of Natural Resources in 1988, and the subject of hearings between then and now. Many of the Coalition's ideas on community-forestry were presented in materials presented to those hearings. For an overview, see J. Swift, "Ontario's Search for a New Way in the Woods", Borealis: The Magazine of the Canadian parks and Wilderness Society, Vol. 3(1), Fall 1991, pp.38-42.
 See "On Common Ground -- Building the Tin Wis Coalition", The New Catalyst, Fall-Winter 1991, No. 21. This is a special edition of the publication has several articles on a proposed Forest Stewardship Act for the province of British Columbia which would grant extensive powers to regional management boards. This legislation was developed by the Tin Wis Coalition, a coalition of environmental, aboriginal and labour groups in B.C. in 1991. Among many of the powers to be granted to the regional boards is the power to establish standards for use of technology, utilization of species and processing of forest products. This material also
 At a 15-20 per cent sludge generation rate for newsprint recycling operations, it is estimated that the import of 2 million tonnes of additional waste annually could produce 300,000 to 400,000 tonnes of sludge. While some of the sludge can be applied as soil conditioner, at present most is incinerated or landfilled. Until new technologies are developed to process the sludge from newsprint deinking to ensure its safe application as soil conditioner, it is clear that there will be negative impacts associated with deinking operations.
 Ontario Ministry of Northern Development and Mines, "Martel Launches Northern Consultation Program", News Release, October 28, 1991. SCAN is abbreviated for Strategic Consultation and Action Now.
 Ministry of Northern Development and Mines, Value-added in the Forest Industry, SCAN North Discussion Paper, April 1992.
 The ratio of money spent on unemployment insurance benefits to funds spent on retraining in this country is 4 to 1. In contrast, it has been estimated that the Swedish government spends 80 percent of its monies on retraining of workers, and only a small portion of the unemployed get unemployment benefits. For further discussion, see Canadian Labour Market and Productivity Centre (CLMPC), Report of the CLMPC Task Force on Labour Force Development Strategy. (Ottawa: CLMPC, 1990).
 Ontario Training and Adjustment Board, Skills to Meet the Challenge: A Training Partnership for Ontario. (Toronto: Ministry of Skills Development, 1991).
 The cellulosic fibres of wood, and cellulose derivatives, were important in the early history of plastics. However, their significance declined as the attention of researchers shifted to more costly and high performance plastics needed for specialized applications such as those in the space and aircraft industries.
 Personal Communication, Professor Tony Redpath, University of Toronto, June 1991.
 A study prepared for the Ontario government released by the MOE in June 1992 estimated expenditures for pollution control equipment and environmental services in Ontario at $2.5 billion annually: see Ernst and Young, Study of the Environmental Protection Industry, June 1992. Report prepared for the MOE. (Toronto: Queen's Printer, 1992).
 In early October 1991, the federal Minister of Industry, Science and Technology, William Winegard, announced that $80 million would be made available for research to develop environmental technologies and market them abroad.
 On this subject, see D. Crane, The Next Canadian Century: Building a Competitive Economy. (Toronto: Stoddart Publishing, 1992).
 Ruth Grier, "Statement to the Legislature on Local Responsibility for Waste", supra note 20.
 Ontario Ministry of the Environment and the Office of the Greater Toronto Area, "The Waste Crisis in the Greater Toronto Area: A Provincial Strategy for Action", June 27, 1991. (Toronto: MOE and OGTA, 1991).
 On this theme, see D. McRobert and P. Muldoon, "Institutional Capabilities for Resolving Bilateral Resource Use Conflicts: A Bioregionalist Critique", Paper presented at Growing Demands on Shrinking Heritage: Managing Resource Use Conflicts, Fifth Canadian Institute for Resources Law Conference, Ottawa, Ontario, May 9-11, 1991.
 J. Ferguson, "Beer War! Canada fires back at U.S.", Toronto Star, July 25, 1992, p. A1.
 MOE, "Environmental Benefits of the Levy on Non-refillable Alcohol Beverage Containers", Statement Prepared for Meetings with Alcan and aluminum packaging producers, July 3, 1992.
 E.F. Schumacher, Small is Beautiful: Economics as if People Mattered (New York: Abacus, 1973).
 Probably the best known description of bioregionalism is presented in K. Sale, Dwellers in the Land (San Francisco: Sierra Club Books, 1985). See also: Sale's earlier book, Human Scale (New York: Basic Books, 1980); David Morris, Self-Reliant Cities: Energy and The Transformation of Urban America (San Francisco: Sierra Club Books, 1982); and V. Shiva, Staying Alive: Women, Ecology and Survival in India (London: Zed Books, 1988). One of the most interesting attempts to apply a bioregional approach to the analysis of environmental problems is the 1990 second interim report of the Royal Commission on Toronto's Waterfront: see Royal Commission on the Future of the Toronto Waterfront, Watershed: Second Interim Report of the Royal Commission on the Future of the Toronto Waterfront, Commissioner: David Crombie. (Toronto: Royal Commission on the Future of the Toronto Waterfront, 1990).
 It has been estimated that Americans spent roughly around 4 percent of their GNP to rebuilding post-war Europe under the Marshall Plan. In contrast, most developed nations spend between 0.1 and 1 percent of the annual GNP to support the developing world. For further analysis on this theme, see Al Gore, Earth in the Balance: Ecology and the Human Spirit (Boston: Houghton Mifflin, 1992); pp. 295-360.