1. July 15 Public Consultation Webcast & Round Table Slide 1

2. Consultation Process Issues identified in approved Blue Box Program Plan (BBPP) –Revising the governance structure –Market development Two phases Slide 2

3. Consultation Process: Phase 1 Webcast & Round Table Consultation Stewards & Stakeholders Slide 3

4. Consultation Process: Phase 2 Considering Options Seek opinions on issues in approved BBPP only Timing of “enhancements” requested by Minister; potential impact on fees unknown Slide 4

5. Preliminary Steward Fees 2005 At August 25 open consultation- –will also present preliminary stewardship fees for 2005 & –basis for calculating those fees Slide 5

6. Phase 1 Objectives Solicit feedback early in process Build on lessons learned from implementation of BBPP Slide 6

7. Today’s Agenda 1.Welcome 2.Topic #1: Governance, Derek Stephenson 3.Topic #2: Market Development, Geoff Love 4.Questions/comments from webcast participants 5.Break (webcast ends approximately 11 a.m.) 6.Round Table #1, One hour 7.Break – food available for working lunch 8.Round Table #2, One hour 9.Closing remarks (approximately 2 p.m.) Slide 7

8. Format Webcast participants - handling questions Moving to ‘Round Tables’ - option Slide 8

9. Derek Stephenson Revising the Governance Structure Slide 9

10. Presentation Overview Review current Board of Directors What current BBPP includes Steward registration update Issues to consider Options for discussion only Next steps Slide 10

11. Board of Directors Food & consumer products manufacturers Non-alcoholic beverage manufacturers Grocery distributors General merchandise retailers Newspaper publishers Paint manufacturers & consumer & chemical product manufacturers Retailer of alcoholic beverages Stewardship Ontario CEO Slide 11

12. Future Governance Model Approved BBPP states that the founding Board would expand to: up to 20 seats up to 7 additional sectors Number of industry sectors will be determined when total members & proportion of total annual fees contributed by each sector is known Slide 12

13. Future Governance Model Additional sectors may include: Electronic & electrical products Toys & sporting goods Non-prescription pharmaceuticals Quick service food Importers Distributors Hardware & automotive Slide 13

14. Initial Criteria for Eligibility Generate designated Blue Box wastes Other companies with commercial connections to Blue Box wastes Other persons with an interest in corporation’s activities As agreed by Stewardship Ontario’s Board of Directors Slide 14

15. Additional Considerations for Board of Directors Configuration & voting representation would consider financial contributions of each sector to Stewardship Ontario Board decisions will require majority vote & approval of minimum number of sectors Stewardship Ontario will review size & composition of Board annually Slide 15

16. Registration Status Report 1384 registered Stewards 443 registrants have not yet filed reports 2,000 (estimated) additional potential Stewards identified & not yet registered 350 registered Stewards; represent 97% of reported levies owing 591 other registered Stewards account for remaining 3% of fees to date Current to July 8, 2004 Slide 16

17. Financial Contribution by Sector Slide 17

18. Some Issues to be Considered 1. Is Board representation by sector appropriate? 2.Are membership criteria correct? 3.Restructure only when full membership composition known? 4. Review annually or less often? Slide 18

19. Today’s Discussion Three possible options: 1.Maintain current sectoral representation 2.Expand Board to between 12 & 15 members, including Non-Stewards 3.Expand Board to 20 members, including Non-Stewards Slide 19

20. Please Note Options are for discussion only Options not reviewed by Stewardship Ontario Governance Committee or Board Comments on other alternatives welcome Slide 20

21. Option 1 Continue with current Board composition with voting rights tied to financial contribution Slide 21

22. Option 1 (cont’d) Maintain current Board sectors with voting rights allocated on reported financial contributions Representation from other stakeholders (material suppliers, NGO) could be considered (non-voting) Slide 22

23. Option 1 Analysis PROS: –Voting reflects financial contribution –Easy transition from current Board CONS: –‘Strong get stronger’ –Not seen as ‘inclusive’ –No direct representation from other key stakeholders –Major generators of Blue Box materials (i.e., newspapers) get relatively small representation –Sectors on current Board represent approximately 91% of fees contributed and 88% of tonnes reported Slide 23

24. Option 2 Increase Board of Directors to between 12 &15 seats Slide 24

25. Option 2 (cont’d) Add sectors to existing Board & add non- steward representation: –3 to 5 more contributing sectors (based on financial contribution) –1 to 2 AMO or NGO Slide 25

26. Option 2 Analysis PROS: –Wider steward representation –Greater transparency by including Non-Stewards –Introduces ‘fresh blood’ CONS: –Voting may not fully represent financial contribution –Increased size may encumber decision making –Some obligated industry sectors may not feel represented Slide 26

27. Option 3 Increase Board seats to 20 Slide 27

28. Option 3 (cont’d) Allocate 70% of Board (14 seats) on basis of payments in, with: –20% (4 seats) to material suppliers –10% (2 seats) to AMO/NGO Slide 28

29. Option 3 Analysis PROS: –Protects relationship to payment in –Includes material suppliers & other stakeholders –Greater transparency & political comfort CONS: –Not purely ‘pay as you play’ –Some stakeholders oppose key elements of BBPP –Increased size, strategic differences complicate decision making Slide 29

30. Next Steps – Summer 2004 July 23 – Post draft report on comments received today & preliminary recommendations Aug. 6 – Closing date for comments on draft report Week of Aug. 15 – Stewardship Ontario Governance Committee to review draft report; post preferred option(s) Aug. 25 – Webcast & public consultation on options Slide 30

31. Next Steps – Fall 2004 & Beyond Early September – Governance Committee to review comments; recommendations to Stewardship Ontario Board of Directors September/October – Recommendations to WDO Board of Directors Selected governance model takes effect by next Annual General Meeting (June 2005) Slide 31

32. Your comments, please! Slide 32

33. Geoff Love Market Development Slide 33

34. Overview of Market Development 1.Approved BBPP on market development 2.Market development progress; where we are relative to BBPP targets 3.Your thoughts on how to proceed on market development Slide 34

35. Market Development & Targets The program will: Include targets for overall quantity of Blue Box waste to be diverted …, & material specific targets for Blue Box waste to be captured …; Include a plan, with funding provisions, outlining activities to develop & promote products that result … From Minister of Environment’s September 2002 request for Blue Box Waste Diversion Program Slide 35

36. BBPP Market Development Three core elements in market development strategy in approved BBPP: 1.Public-private Green Procurement initiative 2.Targeted Market Development Investment program for recycled glass 3. Market Development Plans for others as needed to meet targets Slide 36

37. Market Development Goals 1.Support developing capacity to use all recovered Blue Box materials. 2.Promote enhancement of recovered material value. 3.Enhance material recovery to meet targets (where markets are the barrier). 4.Reduce overall Blue Box Program costs. Slide 37

38. Market Development Principles Guiding principles: 1.Stewardship Ontario to invest in market development in partnership with others. 2.Stewardship Ontario’s investments to be linked to material specific targets; –support end markets for targeted tonnes at next least cost. Slide 38

39. Principles (con’t) 3.Avoid cross-subsidizing material-specific market development. 4.Implement a Request for Proposal/ competitive bid process to allocate market development funds. Slide 39

40. Glass Market Development Investment Program 1.Implementation Projects: longer term –Up to $2 M (from glass Stewards) for 2004/05 –REOI posted on website (7 responses) –MacViro retained to review & evaluate REOIs –Initiating meetings with GTA municipalities, re: mixed glass tonnes –Detailed RFP for qualified applicants (fall/winter) Slide 40

41. Glass (con’t) 2.Glass Business Planning/Feasibility Study: nearer term –$500K business planning & feasibility study fund to support projects up to $25K (matching funding basis) –ReMM retained to help develop funding guidelines & identify priority projects (increased tonnes and/or reduced costs) –Plan to post guidelines - late July; first project funds expected in fall 2004 Slide 41

42. Green Procurement Update Program Goal: demand pull for Blue Box materials (reduce costs) Initial design considerations (from BBPP): –Voluntary; not labeling driven –Public-private joint initiative; not to re-invent wheel –Results driven –Consider codes/best practice promotion approach Slide 42

43. Green Procurement Update (con’t) “Visioning” workshop: June 22 –4 expert speakers –Technical exchange with London Remade, re: lessons learned from Green Procurement program –Workshop report on website (July 19) Green Procurement Business Plan to Stewardship Ontario Board, mid September Slide 43

44. Market Development: Others Market development investments tied to material specific targets (5 year program) WDO’s Cost Effectiveness Committee report recommended considering future market development activities (not yet approved) Slide 44

45. WDO’s Cost Effectiveness Committee Considerations 1.Prepare/adopt green procurement protocols 2.Assess additional market development levies to support low revenue materials 3.Analyze alternative glass markets/ investigate glass colour sorting technologies 4.Investigate including composite cans/ expand polycoat materials Slide 45

46. Cost Effectiveness Considerations (cont’d) 5.Start cost & quality analysis; single stream recycling 6.Assess impact of increasing recovery of “other household papers” on paper markets 7.Investigate cooperative marketing service 8.Implement mixed plastic & plastic film RFQs Slide 46

47. Current Recovery Rates Similar increase indicated from 2003 Datacall Projected Generation Actual Reported Recovery Estimated Recovery Rate Projected Generation Actual Reported Recovery Estimated Recovery Rate (tonnes) (%)(tonnes) (%) (tonnes)(%) PRINTED PAPER Printed Paper Total 724,100 391,435 54.1%732,000 409,754 56.0%18,319 4.7% PACKAGING Paper Packaging Total 325,400 134,822 41.4%332,300 134,980 40.6%158 0.1% Plastics Total 232,200 26,989 11.6%238,700 31,928 13.4%4,939 18.3% Steel Total 67,900 32,582 48.0%69,100 33,472 48.4%890 2.7% Aluminum Total 28,100 10,875 38.7%27,000 10,776 39.9%(99) -0.9% Glass Total 176,300 102,552 58.2%179,400 106,097 59.1%3,545 3.5% PACKAGING TOTAL 829,900 307,820 37.1%846,500 317,253 37.5%9,433 3.1% TOTALS1,554,000 699,255 45.0%1,578,500 727,007 46.1%27,752 4.0% Material 20022001 Change 2001 - 2002 Slide 47

48. 2006 Target Recovery (50%) Total Increase: ~ 20% over 2002 Proposed Target Recovery Proposed Target Recovery Rate (tonnes)(%) (tonnes)(%) PRINTED PAPER Printed Paper Total 466,500 60.1%56,74613.8% PACKAGING Paper Packaging Total 168,600 47.9%33,62024.9% Plastics Total 36,900 14.6%4,97215.6% Steel Total 43,100 58.8%9,62828.8% Aluminum Total 14,000 49.0%3,22429.9% Glass Total 142,600 75.0%36,50334.4% PACKAGING TOTAL 405,200 45.2%87,94727.7% TOTALS871,700 52.1%144,69319.9% Material 2006 Increase in Recovery over 2002 Slide 48

49. Annual Increase to Reach 50% Annual increase similar to recent years 2001 to 2002 2002 to 2003 Proposed Target Recovery Proposed Target Recovery Rate (tonnes)(%) (tonnes)(%) PRINTED PAPER Printed Paper Total 466,500 60.1%14,3003.5% PACKAGING Paper Packaging Total 168,600 47.9%8,4006.2% Plastics Total 36,900 14.6%1,3004.1% Steel Total 43,100 58.8%2,5007.5% Aluminum Total 14,000 49.0%8007.4% Glass Total 142,600 75.0%9,1008.6% PACKAGING TOTAL 405,200 45.2%22,1007.0% TOTALS871,700 52.1%36,4005.0% Material 2006 Annual Increase in Recovery over 2002 Slide 49

50. 50% Recovery by 2006 Similar increase to 2003 Datacall 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 200120022003200420052006 glass aluminum steel plastics paper packaging printed paper Slide 50

51. Slide 51 Stewards’ Reports & Generation Estimates Registration of Stewards & verification of reports ongoing Revisions only if Stewards reports substantially complete and/or supported by waste audits Material Steward Reports Compared to BBPP Generation Estimates NewsprintLow Catalogues & MagazinesHigh Other Printed PaperLow Corrugated CardboardLow BoxboardHigh LaminantsLow Plastic FilmLow SteelSlightly High AluminumSlightly High Non-LCBO GlassLow LCBO GlassHigh

52. Some issues to consider… Slide 52

53. Market Development Required? Are additional market development initiatives required to meet material specific recycling targets & to improve material revenues? Considering: –increases in recovery required (5% per year) –recent increases in recovery –current & projected market capacity –trends in management, e.g., greater commingling Slide 53

54. If additional Market Development … What Strategies? Green procurement? Cooperative marketing? What materials are a priority & what are the next steps? –Plastics? Focus on all bottles only or include other plastic packaging? –Other paper? –Glass - are current initiatives enough? –Metals? Slide 54

55. Your comments, please! Slide 55

56. Comments & questions for Webcast participants email: info@stewardshipontario.ca Slide 56

57. Round Table Discussion Options 1.Breakout to 2 one-hour Round Table discussions 2.Open, full audience discussion on both issues Slide 57

58. THANK YOU! See you at the August 25 Consultation on Options Slide 58