Ontario's Blue Box Fiasco, Broadcast on CKLN Radio, May 1991

By David McRobert, Pollution Probe

This is the 37th installment of a Taste for Justice, a programme in which we and our colleagues and friends offer a different view of the law than the one which is usually presented, one which emphasises the role which law plays in the maintenance of unequal power relations in Canada.   Today, we are going to examine the biases of the legal system by addressing the saga of the well known blue boxes we use for recycling our pop cans in Ontario.

The Blue Box story really goes back to the early 1970s when concerns about litter problems were attracting the public's attention.  In 1976, a law under the Environmental Protection Act was passed allowing the Ontario government to enact regulations banning non-refillable soft drink containers.  However, the regulations banning non-refillables were never passed and instead in 1978 the soft drink industry convinced the Minister of the Environment to sign a “voluntary agreement” that soft drink companies and retailers would sell 75 percent of its soft drinks be in refillable containers.

The 75 percent ratio for refillables was never reached though because the soft drink industry had trouble with the targets.  It also had substantial connections to the Ontario Progressive Conservatives and made large annual donations to both the Liberals and the Progressive Conservative parties throughout the 1970s and the 1980s.

In the early 1980s, environmentalists renewed their push to get the Ontario government to enforce the 75 percent "gentlemen's agreement" on refillables.  At the same time, the soft drink industry contended that consumers preferred disposables such as cans and plastic bottles.  What the soft drink industry really wanted was "packaging freedom": in other words, freedom to use cheaper packages for their products, freedom to concentrate ownership in their industry, freedom to eliminate the independent bottlers, freedom to increase profits and freedom to start challenging the role of unionized bottling workers.  In contrast, steel workers were arguing in favour of greater use of cans to provide a more secure footing for the steel industry.  Meanwhile the aluminum producers and the canners wanted to develop new highly mechanized production lines that made full use of aluminum and would cut labour costs for the soft drink companies.  The plastics industry wanted access to markets to sell plastic bottles to consumers and the independent bottlers said they wanted a better refillable system.

To resolve conflicts between these interests, a multi-stakeholder consultation process was established by the Ontario government in 1985, chaired by Professor Paul Emond of Osgoode Hall Law School.  In this case, the former executive director of Pollution Probe, Colin Isaacs agreed to represent environmentalists.  Isaacs decided that he would accept the concept of packaging freedom and greater reliance on plastic bottles and aluminum cans in return for greater support for recycling.  Groups like Pollution Probe had been advocating recycling of newsprint, metal and glass for several years and using more valuable materials like aluminum to subsidize curbside recycling seemed like a way to break the barriers that had been encountered.

With Pollution Probe's support, participants involved in the multi-stakeholder consultation agreed to relax the refillable quota to 40 percent, that is, down from 75 percent, if the soft drink industry contributed $1 million to help set up Ontario Multi-Material Recycling Inc. or OMMRI and expand Blue Box curbside recycling programs.  Eventually the amount of the contribution was increased to $20 million.

What Colin Isaacs didn't know is that he had made a sweetheart deal with industry that would cost Ontario taxpayers millions of dollars each year.  The deal is so generous that it has already saved the soft drink industry several hundred million dollars and this explains the industry's willing financial support for the Blue Box program.  It has been estimated that not having to operate a full-scale bottle deposit/return system saves the soft drink industry about $60-80 million annually.  Meanwhile, the industry collectively contributed only $20 million to the Blue Box program between 1986 and 1990 and there is evidence that $10 million of money was arranged through special tax breaks to OMMRI and the soft drink companies.  If these allegations prove true, then the 10 million dollars amounted to a contribution of about $1 for every 1000 cans distributed in the province over five years.  And now that the Blue Box program is running, the soft drink companies are planning to spend only $1 million each year between 1990 and 1994 to support their use of single use, throw-away containers and keep the price of soft drinks in Ontario at less than 40 per cent of the price of milk.

While the soft drink industry reduced its costs, taxpayers got the shaft.  Ontario municipalities and the provincial government have spent several hundred million dollars over the past five years to get the Blue Box program going.  But the really scary part is that it doesn't look like recycling programs will ever be economic if the government doesn't make polluters pay for the wasteful stuff they make.

As part of the Blue Box package, industry officials and environmentalists wanted a mechanism to review the program and make recommendations on it.  The Peterson government responded by establishing the Recycling Advisory Committee or RAC in 1985 after new regulations on the Blue Box system were implemented.   While representation on RAC was never really balanced, its composition was gradually altered between 1985 and 1989 so that it now is comprised largely of representatives from industries with a vested interest in recycling.  In effect, these industries have captured control of an important advisory body on waste issues.  Although the name of the committee was changed this past summer to the Waste Reduction Advisory Committee and a few token environmentalists have been added since the NDP took power, the province's main advisor on waste is still controlled by industry.

RAC has played a clear role in Ontario's environmental politics.  In 1987, it recommended that refillable quota should be relaxed to 30 per cent even though the law required the soft drink industry to recycle 50 per cent of its non-refillable containers before the quota could be lowered.  A report released less than a year later would show that less than 5 percent of non-refillables were being recycled in blue boxes despite the promises of the soft drink industry.

The lower 30 percent refillables quota wasn't honoured and convictions under the law began to embarass the industry.  So RAC did its job once again.

In late April 1990 at a shareholders meeting Neville Kirchmann, then President and CEO of Coca-Cola Bottlers in Canada (TCC Beverages), gleefully revealed that, in a letter dated December 1989, RAC had asked Premier David Peterson and the Ontario government to further relax the 30 percent quota and instead adopt a policy of "interpretative compliance".  According to the RAC proposal, soft drink producers and distributors would be deemed to be in compliance with the quota if they maintain the capacity to produce 30 percent of the soft drinks they sell in refillable containers.   According to sources in the MOE, Liberal Premier David Peterson had made the special deal with Neville Kirchmann, on relaxing the refillable quota well before RAC ever made a formal request in its December 1989 letter.

During the summer election of 1990, the Liberals were repeatedly attacked for their position on refillables and the deal they gave the soft drink industry.  The NDP promised to implement a fully refillable system during the campaign and were lambasted by the steel workers for that commitment. 

After the election, the soft drink industry clamoured to meet with the new Environment Minister, Ruth Grier, to get her to recant on her strong statements on refillables.  In a private meeting held days after she was formally appointed as Minister, soft drink industry officials threatened to challenge any attempt by the new government to force them to meet the 30 percent quota on the grounds that the EPA refillables quota violates the Charter of Rights and Freedoms because the wine and fruit drink industries are not required to use refillables.  They also argued that the existing law was unenforceable because of 1989 decision of the Ontario Court of Appeal that called OMMRI a type of “old boys club”.  As a result, the new NDP government is feeling pressure to drop its commitment to make the soft drink industry pay.  As a compromise, the new government asked the soft drink industry to spend a million dollars on TV ads in early 1991 to promote refillables.  Unfortunately, the TV campaign was a total flop.

But the story only gets worse and the full aftermath of the Blue Box program is still being assessed.  As would be expected, other industries are insisting that they get a deal comparable to the one that the soft drink industry got.  For example, the Ontario newspaper industry wants to pay only $2.5 million dollar each year into the second phase of Ontario's blue box program.  However it has been estimated that the cost of picking up recycled newsprint to taxpayers is in the order of $70 million dollars each year.  Clearly, taxpayers are getting shafted by the economics of Ontario's blue box program.

There are also important implications for workers.  Statistics Canada reports that 300 union jobs have been lost in northern Ontario in the past three years because of closure of bottling plants.  Thousands of bottling jobs in southern Ontario have also been eliminated since 1985.  Meanwhile all Ontario citizens are now doing unpaid work for the private sector sorting their recyclables and hauling them to curb.  In the end this is work which is generating revenues and profits for industries that buy up the recycled materials at firesale prices dictated by the private sector. 

The lessons in all this are that recycling alone cannot adequately deal with Ontario's waste crisis and that sweetheart deals and voluntary agreements with industry only compromise the interests of environmentalists.

It is time for the Ontario government to stop the charade around blue box recycling and make the corporations who benefit from it and pollute the environment pay.