Ministry of Environment,…

Ministry of Environment, Parks, and Conservation
Submission of Clorox Canada
Regulation Resource Recovery and Circular Economy Act
With respect to Blue Box
December 3, 2020

Thank you for the opportunity to present our comments on the proposed change to Blue Box material management and the development of an EPR system for Ontario.
The Clorox Company (NYSE: CLX) is a leading multi-National manufacturer and marketer of consumer and professional products with approximately 8,800 employees worldwide and fiscal year 2019 sales of $6.2 billion. Clorox markets some of the most trusted and recognized consumer brand names, including its namesake bleach and cleaning products: Pine-SolⓇ cleaners; GladⓇ bags, wraps and containers; BritaⓇ water-filtration products; Burt’s BeesⓇ natural personal care products; RenewLifeⓇ digestive health products. The company also markets brands for professional services, including Clorox HealthcareⓇ and Clorox Commercial SolutionsⓇ.

Glad bags including compost bags for kitchen countertop containers are manufactured in Orangeville, Ontario. Compost bag products are shipped throughout North America. Brita filters are manufactured in Brampton. Glad plant in Orangeville is a zero waste facility.

Clorox is a leader among Fortune 500 companies in sustainable business operations and practices. We are a signatory to the Ellen McArthur Foundation, and members of the U.S. Plastics Pact. Further, we have incorporated guiding principles from these initiatives into our Corporate Strategy: IGNITE
- 50% combined reduction in virgin fibre packaging by 2030
- 100% recyclable, reusable, compostable packaging by 2025
- 100% global facilities zero waste by 2030, factories by 2025

We are committed to stewardship programs and have actively participated in consultation for development of this regulation and a contributor to the cost sharing model since its inception in 2002.
We are disappointed in the released draft as the good faith agreement by stewards and municipalities post 2019 mediation is not at all reflected in the Regulation document.
Our concerns are outlined here
Packaging-Like Products
The essence of successful EPR transition, anywhere in the world, was as a packaging management/ diversion program for consumer goods.
From the beginning of the consultation process in Ontario, EPR extension was a refinement of the Blue Box program policy; mainly absorbing the cost of municipal contributions of the current Blue Box system then assuming the control and operation of Blue Box across Ontario.
One of the most egregious overreaches within this regulation is the designation for fees and mandatory inclusion of “packaging like” material in the Blue Box.
Currently, the definition in the draft Regulation for such products includes bags, and wraps of our Glad food protection line, both manufactured in Orangeville.
Food protection film and bags are products, not packaging. To create this category departs from the objectives of EPR as a packaging management system through recycling. Throughout consultation, it was conveyed to Clorox that single use type of these items needed to be better managed within the waste stream. Collecting these film products and applying fees will create the incentive for manufacturers like ourselves to change the product through plastic reduction or composability.
This logic is confusion as the hierarchy of reduce reuse recycle is best demonstrated by such food protection products.
These products are used to preserve food for future consumption preventing food from spoiling prematurely preventing waste. Consumer behavior with food protection is radically different. Attached to this submission is a presentation PowerPoint highlighting the frequency of reuse of wraps and bags by consumers (66% reuse bags and 40% reuse wrap).
We believe food protection productions to be an important tool in reducing organic waste and are willing to work on policy and public education to help people keep food long enough for consumption before spoiling. This offer was part our submission on the Food and Organic Policy paper in November.
Inclusion of these films in the recycling system creates management problems as typically most of it has food contamination, making it unrecyclable. The lightweight of the material also contributes to the cost of handling. Conventional Blue Box materials cost between $50-400 mt to collect and process; this film stream costs are $2700 mt and further, there is no market for the material.
We understand the need to reform the business around Blue Box programs and how productive a tool it can be for diversion. Public acceptance has made the diversion of glass, newspapers, PET, and cans successful and mature markets exist to process these secondary materials into other goods.
Light density film does not lend itself to collection, processing or sale.
Included is an attachment from a York University study on the costs of collection of all Blue Box material including film. In this study the cost of collections are tested against the program. At 1.7% of the waste stream, it will cost $54 million more to collect; the total current Blue Box program is estimated to cost $270 million. Total steward fees will need to increase by 20% for collection of this plastic stream.
Clorox is steadfast in the commitment to sustainability and has undertaken the research of the LCA on this product line and is comfortable with the result. Conclusions are managing these plastic thru the Blue Box add 12x more carbon into the atmosphere than excluding from Blue box collection.
However well intentioned inclusion of the film-like products may be, not only is it a departure from the principles of EPR, it makes no economic sense.
We recommend the definition of “packaging-like” be amended to exclude food protection products.

Scope Expansion
The regulation itemizes a large expansion of service into Multi-Residential Buildings, Long-Care Homes, Hospitals, Schools and Parks Open spaces. Adding these institutional and multi-residential locations to a mandatory service obligation to stewards immediately after the transition period will create an unfair and unmanageable cost escalation of Blue Box service in Ontario.
Also in the regulation small communities and First Nations are a scheduled expansion of the Blue Box program. We agree and welcome the opportunity to add these locations
From the regulation consultation meetings, with MOECP remaining numbers were quantified at 7,600 more facilities and 330,000 apartment units and the cost would be $14,500,000 more to the current program.
The cost modelling could not be explained. Calculations using conventionally accepted operating cost multipliers for households would be considerably higher.
We engaged with York University on this issue, and that study is attached. As Prof Lankan noted, a lot of variables are unknown. Data for the proposed locations is not readily available and modelling based on audits from similar facilities likely underestimates the total.
The York study concluded the costs would be $94 million if all was perfect and processing capacity was available and properly capitalized. The revised cost from MOECP including Parks is $115,000,000. Cost projections are annual operating only and do not include the capital investments for collection and processing infrastructure that will be needed for this expansion beyond current Blue Box service.
To suggest at the last minute that responsibility and costs for collection of material from Parks and Open spaces be transferred to all stewards violates the spirit of respectful cooperation promised during mediation. On the cost of collection within these location we agree with RCC that a “claw-back “ of away from home exemptions food service stewards enjoy be used to fund these collections.
This transfer of costs from public institutions and for profit business (multi-residential buildings) to the stewards is unfair and incongruous with the Principles agree upon with the mediator in 2019. Even with the MOECP calculations, total steward fees would now be $385 million up from $135 million in 2019.

We recommend that these additional locations for service be removed from the regulation.
Only the currently served locations as agreed in the mediation process be included in the regulations.
Also, the Government and Stewards post transition can negotiate a service expansion schedule only when volume and source material audits on these locations are complete.
Further an evaluation of MRF capacity be undertaken to determine if and when this volume can be added the processing and collection systems.

Recycled Content
This well-meaning addition to the regulation has the potential to bring down the system. A target for content is a good public policy instrument; however, being able to “buy down” financial obligation to the system by increasing recyclable material in packaging is at cross-purposes with the rest of the regulation. Many products in plastic packages can not be changed by weight or manufactured with recycled content as consumer protection and product integrity concerns would prevent such a change.
A reward for packaging innovation is needed but another method to incent producers/ stewards to increase recycled content would be better.

Compostable Packaging

We expect a substantial increase in the volume of compostable packaging and other non-food waste material to enter the “waste” stream in the near future. Many products that today are part of the Blue Box may transition to compostable.
Collecting data on tonnage of material put into the market would serve the development of a sound organic diversion plan for Ontario. MOECP must connect this action required under the regulation with ongoing consultation and crafting of an Organic / Food Waste Policy for Ontario.
We recommend the organic policy discussion aim should be a separate but complementary regulation for organic diversion.

Transition to PRO/Steward
We are in agreement with trade associations that continue to outline the problems with transition to PRO/Steward responsibility of the Blue Box system.
The process to establish producer groups is unnecessarily complex and the timelines for initial reporting unreasonable. Without the details about MRF capacity, municipal collection contracts, including consultation with respective bargaining units, it is impossible to meet the registration deadline. If this information is not presented quickly and accurately, it is unlikely the 2023 target for starting PRO-led collection and processing can be met.
We agree with establishment of a single Pro to facilitate contracts for collection and processing

Clorox Canada is committed to and wants to be part of developing a circular economy and a sustainable Ontario. Our international commitments on environmentally sound business practices are reflected in the values we employ with our actions with customers and suppliers here in Ontario.
We believe the creep into packaging-like materials violates both the spirit of EPR as it has been established elsewhere in the world, and the deal we willingly agreed to during mediation in 2019.
The management and cost escalation of adding this low density material to the list of designated items for collection and fee assignment only creates a cost increase to the whole system and provides no environmental benefit.
The expansion of service to multi-residential and institutional locations, without proper evaluation of cost, is going to make the system of collection by PRO/Stewards impossible.
We ask the government to not enshrine these actions in the regulation and to continue to negotiate with PRO/Stewards to find a pathway for a more effective way to manage these locations.
Our hope is the government will take time to finalize this Regulation as it should be a building block for a robust, affordable, and effective diversion plan for Ontario. A model where all Ontarians – labour, commerce, government, and citizens – work together to properly manage waste streams into inputs for the creation of a working circular economy.
Clorox Canada and our 500+ employees in Ontario welcome the opportunity to participate in developing such a system. Thank you for taking the time to review our comments.

Respectfully

Paul Grenier
Manager Government Affairs
Clorox Canada