Workshop & Simulcast 2 1:30 - 3:00 January 21,

Damian Bassett Stewardship Ontario Workshop 2 “New Measures & Enhancements to the Blue Box Program Plan” 2

THIS AFTERNOON’S AGENDA 1:30 – 1:35 Welcome Damian Bassett – Stewardship Ontario 1:35 – 1:45 “New Steward” Update PK Misra – Ontario Ministry of the Environment 1:45 – 1:55 Work Plan to Address New Measures & Enhancements Glenda Gies – Waste Diversion Ontario 1:55 – 2:25 We Want to Hear Your Views Derek Stephenson – Stewardship Ontario 2:25 – 2:55 Question Period Derek Stephenson – Stewardship Ontario PK Misra – Ontario Ministry of the Environment Glenda Gies – Waste Diversion Ontario 2:55 – 3:00 Closing Remarks Damian Bassett 3

SPECIAL INSTRUCTIONS Remember: veterans and rookies alike in audience 2 nd audience listening in on-line Save questions for Q & A at the end Those on-line:  download slides after Yahoo “player” loads  supporting docs available on website  Q’s – from your regular program – to: 4

TODAY’S OBJECTIVES Workshop2  Preview upcoming consultation on new measures and enhancements to Blue Box Program Plan asked for by the Ontario Minister of the Environment. Workshop 1  Review and demonstrate how obligated Stewards confirm their obligation status, identify and collect data on their designated Blue Box wastes, and “how to” register with and report to Stewardship Ontario. 5

PK Misra Director, Waste Diversion Policy Branch Ontario Minister of the Environment 6

Ministry of the Environment “New Steward” Update January 21,

Waste Diversion Act 2002 (WDA) Act to promote reduction, reuse and recycling of waste and to provide for development, implementation and operation of waste diversion programs Created Waste Diversion Ontario (WDO) Allows for creation of Industry Funding Organizations (IFO) 8

Waste Diversion Ontario (WDO) Permanent non-government corporation operated by a Board of Directors composed of:  8 industry appointees  3 Minister’s appointees  4 municipal appointees WDA assigns WDO the responsibility for:  Developing programs for any materials designated by the Minister  Implementing and operating waste diversion programs approved by the Minister Industry Funding Organization, set up by WDO, responsible for setting fees and rules for stewards 9

Blue Box Minister requested WDO to submit Blue Box Program Plan (BBPP) in Sept Plan submitted by WDO Feb includes:  Blue Box waste defined as all printed paper and packaging  Recovery rate set at 50% by 2006  Stewards are brand owners and first importers  Program delivery mechanism includes 3 permanent committees  IFO Governance rules and program agreement with WDO  Stewards’ fee formula encourages improvements in recovery rate  Municipal payment formula encourages efficiency and effectiveness 10

BBPP Expectations Plan expected to result in:  Increase of quantity of materials diverted  Sustainable funding for municipalities  Improvement and expansion of already successful Blue Box system  Stewardship Ontario (IFO) created  Providing stewards an incentive to improve recyclability of materials  Ensuring a “level playing field” for all stewards 11

Current BBPP Status Minister approved WDO Blue Box Program Plan (BBPP) – December 22, 2003 Stewards obligated to fund BBPP as of February 2004, the commencement date of the Plan Municipalities can expect to receive funding in Spring

Future Blue Box Initiatives Minister has requested WDO to submit for approval by March 31, 2004:  Policies and practices to divert at least 60% of Blue Box wastes by 2008 through reduction, reuse, recycling  Target percentages for each Blue Box material that will be diverted annually  Benchmark targets for municipal diversion rates  Specific cost containment principles for municipalities and stewards to follow 13

Future Blue Box Initiatives  Policies and practices to ensure compliance with cost containment principles  Effectiveness and efficiency benchmark targets for municipal Blue Box systems  Policies and practices to encourage effectiveness and efficiency for municipal Blue Box systems  Policies and practices to keep WDO and SO administration costs at < 5% of program cost  Projected schedule of steward’s fees 14

Thank You 15

16 Glenda Gies Executive Director Waste Diversion Ontario 16

Work Plan to Address New Measures & Enhancements January 21,

New Measures and Enhancements 1. Administration costs - To be addressed by WDO/Stewardship Ontario Boards stewards fees - To be addressed by Stewardship Ontario through consultation with stewards 3. Targets, benchmarks, cost containment, E&E and impacts on/incentives for small business - To be addressed by WDO/Stewardship Ontario/AMO through consultation with public and affected stakeholders Work Plan Outline 18

WDO and Stewardship Ontario Boards to develop policies and practices to limit their administrative costs to no more than 5% of program costs Draft recommendations to be developed by staff and presented to Stewardship Ontario and WDO Boards during March Administration Costs 19

Fees for the July 1 to December 31, 2004 program period Stewardship Ontario to –Identify material specific costs –Develop material specific fees –Present data to affected stewards 2004 stewards fees presented to Stewardship Ontario and WDO Boards during March 2004 Stewards Fees 20

One background paper on –Diversion Targets and Benchmarks Policies and practices to lead to at least 60% diversion by 2008 through 3Rs Policies and practices to support target percentages for each Blue Box material Benchmark targets for municipal diversion rates Targets, Benchmarks Etc. 21

Additional background papers on –Cost Containment Policies and practices to support cost containment principles and strategy for municipalities and stewards –Effectiveness and Efficiency Policies and practices to encourage effectiveness and efficiency in municipal recycling programs –Impacts/Incentives for Small Business Analysis of financial/operational impacts on small business including incentives for small businesses to improve diversion of BB wastes Targets, Benchmarks Etc. 22

Background papers –Developed by WDO/Stewardship Ontario/AMO –Presented to WDO Board in February –Released for consultation immediately following WDO Board review Regional public workshops –In London, Kingston and Sudbury –Tentatively scheduled for late February –One workshop available through webcast Consultation Process 23

Written submissions accepted up to March 10 by Stewardship Ontario at –By at –By fax at –By mail at Dennis Darby, Chair, Stewardship Ontario 26 Wellington Street East, Suite 601 Toronto Ontario M5E 1S2 Consultation Process 24

Comments summarized and draft recommendations developed by WDO/Stewardship Ontario staff Draft recommendations presented to WDO Board for review and comment Final recommendations presented to WDO Board for approval Delivery of recommendations to Minister by March 31 Consultation Process 25

Website: Tel.: Fax: Contacting WDO 26

Derek Stephenson Program Manager Stewardship Ontario 27

OBJECTIVES FOR TODAY Jump-start consultation program on BBPP new measures and enhancements Raise awareness among key stakeholders of new requests Identify preliminary options for your consideration Solicit feedback on preferences & alternatives Preliminary ideas - for discussion purposes only 28

THE MINISTER’S REQUESTS ARE INEXTRICABLY LINKED Given a 60% overall diversion target for Blue Box wastes ↓ How do we set material specific targets? ↓ How do we relate these targets to benchmark targets for municipal diversion rates? ↓ Keeping in mind the need for BBPP cost containment strategies ↓ And encouraging effectiveness & efficiency of municipal BB programs 29

THE MINISTER’S REQUESTS ARE INEXTRICABLY LINKED While keeping admin costs to 5% And assessing impacts on small business communities Decisions taken in these areas will directly influence revised 2004 fees 30

THE 60% BLUE BOX MATERIAL DIVERSION TARGET BBPP projects 50% BB material diversion by 2006 Reaching 60% will require increasing total BB waste diverted to over 1 million tonnes per year by 2008 Straight line cost projections would suggest that payments to municipalities could rise substantially if per tonne operating costs are not reduced Primary tools for reducing these costs: - 10% effectiveness & efficiency fund - market development investments - material substitution 31

HOW TO SET MATERIAL SPECIFIC TARGETS? Each material to reach 60% diversion?  leading to higher overall program costs  fee formula limited in redistributing these costs Focus on recovering the next least cost tonne?  lowers overall program costs  stewards of low recovery materials avoid costs Set a minimum recycling target for each material?  all materials required to make progress  link to changes in weighting of fee setting formula? 32

BENCHMARK TARGETS FOR MUNICIPAL DIVERSION How will overall 60% target be reached across the variety of Ontario municipal programs: northern communities small urban large urban rural How many kgs. per household will each of these program types need to reach on average to achieve an overall target of 60%? 33

COST CONTAINMENT STRATEGY See WDO website for principles & strategies agreed to by WDO Board: Will become part of WDO Board’s response to the Minister, pending consultation comments. 34

KEY ELEMENTS OF WDO COST CONTAINMENT STRATEGY 1.Invest in market development initiatives 2.Establish best practices for maximizing revenues 3.Establish diversion targets to promote next least cost unit of waste recovered 4.Use municipal funding allocation model to reward efficiency improvements 5.Establish WDO policies for calculating acceptable municipal costs 6.Year over year cost increases to be tied to changes in cost of living, increased recovery and market changes 7.Dedicate a portion of the (10%) Effectiveness & Efficiency fund to helping inefficient programs 8.Promote best practices for cost efficiency 9.Establish municipal program cost bands to identify extraordinary costs 35

COST CONTAINMENT IMPLEMENTATION STEPS Could include: Additional market development fees on designated materials Training programs funded by E&E funds Revisions to weightings applied in fee setting Pay In methodology Revisions to municipal funding allocation Pay Out model Requirements for detailed documentation of municipal cost increases Incentives to consolidate programs and invest in new technologies Funding demonstration projects and municipal transition costs Municipal and Industry Program Committee (MIPC) will be developing criteria and a process to apply cost bands for municipal programs. See WDO Containment Strategy at 36

ENCOURAGING EFFECTIVENESS & EFFICIENCY Could include: Revising municipal Pay Out model to provide greater financial incentives Investing in promoting municipal best practices Investing E&E funds to:  Encourage MRF consolidation  Improve capture rates  Adopt new technologies 37

REVISING FEES FOR JULY 1 TO DECEMBER 31, 2004 Must be approved by Stewardship Ontario & WDO Boards and submitted to Minister by March 31, 2004 Municipal cost payments increase from approximately $2.6 to $3.5 Million per month Other BBPP costs include: new initiatives to increase recovery rates (if required) market development initiatives (i.e. glass markets initiatives) re-payment of start-up costs program delivery costs (enforcement, WDO operations, E&E) program administration costs Projected cost ranges only until Minister approves BBPP new measures and enhancements 38

HOLDING PROGRAM ADMINSTRATION COST TO 5% Will need to distinguish between: Designated Program Delivery Costs  E&E fund work  Market development initiatives  MOE enforcement costs  WDO program development cost recovery charges  Recovery of one-time program start-up costs Stewardship Ontario Administration Costs:  identifying and registering stewards  calculating municipal program costs  Stewardship Ontario & WDO program committees  staff, overheads and program management  consultation & reporting 39

ANALYZING IMPACTS ON SMALL BUSINESS Assessment of financial impacts on the small business communities  evaluating financial costs to small business stewards  impact of current di minimus threshold  assessing total financial contribution vs. total administration costs  simplifying reporting rules (where possible) Identifying opportunities to increase diversion of their BB wastes  practices and policies to promote increased recycling in this sector  calculating contribution made to overall 60% recycling target 40

NEXT STEPS Register with Stewardship Ontario if you are a Steward Review background material available on WDO and Stewardship Ontario websites: Participate in regional public workshops and webcasts Monitor work of Stewardship Ontario committees Submit written comments to Stewardship Ontario by March 10,

Q & A 42

CLOSING REMARKS Stewardship Ontario is now accepting pre-registrations through: [stewards only] on homepage  First invoice is generated from on-line system and payment is due April 20 th  Second invoice will cover obligations for last six months 43

Rules and Guidebook #1: Are You Obligated? are posted on the website Guidebooks available after a company is pre-registered:  #2 - “Collecting & Reporting Your Blue Box Waste Materials Data”  #3 – “Terms of Membership with Stewardship Ontario”  #4 – “How to Register, Report & Manage Your Materials Data” GUIDEBOOKS THERE TO HELP 44

ADDITIONAL SUPPORT Membership Services     Stewardship Ontario 26 Wellington Street East, Suite 601 Toronto, Ontario M5E 1S2 45

THANK YOU 46