Tire Regulation under the Resource Recovery and Circular Economy Act, 2016

Description of regulation

The Ministry of the Environment and Climate Change (the ministry) is committed to preserving resources and recovering valuable materials from wastes lost to disposal. That is why the Ontario government put in place a new Waste-Free Ontario framework to shift Ontario to a circular economy – a system in which products are never discarded, but reused, recycled and reintroduced into new products.

In keeping with this objective, the ministry has indicated its intention of winding up Ontario’s existing waste diversion programs and the industry funding organizations (IFOs) that operate these programs under the Waste Diversion Transition Act, 2016 (WDTA), and transitioning to a new producer responsibility framework under the Resource Recovery and Circular Economy Act, 2016 (RRCEA). Under this new framework, prescribed producers will be responsible for the end-of-life management of wastes generated from the products and packaging they sell in Ontario.

The first program being wound up and transitioned is the Used Tires Program. To achieve a seamless transition, a comprehensive two-step approach is required:

• Winding up the existing Used Tires Program and Ontario Tire Stewardship which operates the program under the WDTA; and,
• Making a new regulation under the RRCEA to make tire producers responsible for the collection and end-of-life management of tires and for recovering resources and reducing waste associated with their tires, among other things.

The Minister of the Environment and Climate Change has directed that the Used Tires Program wind up by December 31, 2018, and then Ontario Tire Stewardship (the IFO operating the program) would subsequently wind up as a corporation. To enable a seamless transition for the management of tires in Ontario from the WDTA to the RRCEA, the ministry anticipates that the proposed regulation be made and filed in March 2018, prior to the wind up of the Used Tires Program, with requirements being phased in as specified in the proposed regulation. It is proposed that the reporting, record keeping and auditing requirements would take effect in March 2018, while registration requirements would take effect on May 1, 2018. It is also proposed that the collection, management and promotion and education requirements would take effect on January 1, 2019.

The Resource Productivity and Recovery Authority (the Authority) would be responsible for the oversight, compliance and enforcement related to the regulation. The Authority is also responsible for collecting data, through its Registry, from producers and other parties that conduct activities related to resource recovery and waste reduction in order to oversee and assess performance.

Key principles of the proposed regulation include:

• Eliminate the need for the disposal of tires in Ontario by making tire producers accountable for recovering resources from and reducing waste associated with tires they supply into the Ontario market;
• Foster the continued growth and development of the circular economy;
• Ontarians’ experience with and access to waste diversion services for tires will not be negatively impacted during and after the transition;
• Establish clear outcomes that enhance the recovery of tires;
• Provide flexibility for producers to meet their outcomes; and
• Create a level playing field for businesses involved in the resource recovery of tires.

The ministry is seeking your feedback on the proposed regulation. In addition to any comments you may provide on the proposed regulation, the ministry is seeking your specific input on areas identified in the description of the proposed regulation below.

Description of the proposed regulation

Designating materials

The proposed regulation designates tires as one class of materials that includes on- and off-road tires that are sold or made available in Ontario (e.g., tires from motor vehicles, automobiles, trucks, tractors, heavy equipment, etc.). The proposed regulation identifies four tire types within the class (passenger and light truck tires, medium truck tires, off the road tires, and large tires) for the purpose of applying specific collection and management requirements for these types.

Tires that are excluded from the current Used Tires Program (e.g., tires from commercial aircraft, personal mobility devices and bicycles, in addition to small tires less than 1 kg) are also excluded from the proposed regulation.

Defining responsible producers

The proposed regulation establishes a methodology for determining the producer who will be given responsibilities under the regulation. The methodology focuses primarily on tire producers resident in Ontario who market tires, or a vehicle on which tires are provided, but also includes importers, distributors and retailers of these tires and vehicles. The methodology also captures out-of-province producers that market tires or vehicles to Ontario consumers through the internet.

These tire producers would be responsible for the end-of-life management of wastes generated from the tires they sell in Ontario. They would have the flexibility to meet their outcomes on their own or by hiring a third party which would enable them to work collectively with others to perform their duties. Nevertheless, responsible producers, at all times, would remain responsible for fulfilling the requirements set out in the proposed regulation.

In addition to any comments you may provide on the proposed regulation, the ministry is seeking your specific input on the following:

• Capturing out-of-province producers in the methodology that market tires or vehicles with tires to Ontario consumers through the internet.

Collection of tires

The proposed regulation requires producers to meet two types of collection standards to provide a convenient and accessible collection network across Ontario:

• Collection Standard #1 – Setting a collection requirement based on weight of tires sold in Ontario.
• Collection Standard #2 – Providing Ontarians with accessible tire collection.

Only tires collected through registered collectors would be permitted to be counted towards meeting a collection standard. In addition, tires cannot be collected from outside of Ontario for the purposes of satisfying one’s collection requirement.

Collection Standard #1 – setting a collection requirement based on weight of tires sold in Ontario

The proposed regulation establishes a baseline for the minimum amount of tires that producers must collect each year (by weight) that is achievable and enforceable. This baseline is intended to drive producers to establish a comprehensive collection network in order to meet their collection requirement. The baseline would be calculated using a three-year sales average based on the most recent audited sales data and an adjustment factor. The proposed adjustment factor is 0.85, which takes into account reduced tread wear (i.e., diminished weight of a tire at end-of-life).

For producers of large tires (i.e., tires that fit a rim size of 39 inches or larger) and producers of vehicles on which large tires are provided, it is proposed that at least 60% of the collection requirement (by weight) must be met by collecting large tires.

It is also proposed that tire producers would be able to carry over to the next year any excess tires collected in the current year, up to a maximum of 5% (by weight) of their collection requirement to meet the standard in the following year. This provision is intended to reward successful performance without promoting the storage of excess tires for future years.

In addition to any comments you may provide on the proposed regulation, the ministry is seeking your specific input on the following criteria for setting collection standard #1:

• Using a three-year sales average.
• Setting the adjustment factor at 0.85.
• Requiring that producers of large tires meet their collection standard by collecting at least 60% of their tire type.
• Allowing the ability for tire producers to carry over to the next year excess tires collected in the current year, up to a maximum of 5% (by weight) of their collection requirement to meet the standard in the following year.

Collection Standard #2 – providing Ontarians with accessible tire collection

The proposed regulation requires a producer that markets tires or markets a vehicle on which tires are provided in Ontario to establish an accessible and convenient collection network for Ontarians to return their tires for reuse and recycling. For example, collection sites shall accept, free of charge, tires returned by consumers similar in type to the tires sold at that location.

Within a local municipality (i.e., lower-tier or single-tier), a producer needs to establish and operate a number of collection sites that equals at least 75% of the retail locations in that local municipality at which the producer supplies tires or supplies a vehicle with tires. Within an unorganized territory, a producer needs to establish and operate a collection site within 30 kilometres of the retail locations in that territory. A producer without retail locations in Ontario must provide for the collection of tires that is, at minimum, equivalent in manner to how the tires are supplied.

Producers with retail locations in Ontario will be required to provide a minimum level of service in local municipalities and in unorganized territories with a population greater than 1,000 that do not have retail locations. For example, the producer would have to provide at least one collection site or one public tire collection event per year.

In addition to any comments you may provide on the proposed regulation, the ministry is seeking your specific input on the following criteria for setting collection standard #2:

• Requiring producers to provide a minimum number of collection sites equal to 75% of the retail locations where their tires are supplied in each local municipality.
• Requiring a producer to provide at least one collection site or one public tire collection event per year in local municipalities and unorganized territories with a population of at least 1,000 persons, where no retail locations exist.
• Requiring collection sites to accept up to 10 tires per day from any person.

Management of tires

The proposed regulation requires producers to recover 85% (by weight) of the materials from tires collected through their collection network. This requirement is intended to increase the reuse and recycling of tires at end-of-life. Recovery for the purpose of this regulation means: reused; re-treaded; or processed to make new products, packaging or things. Only tires processed by registered processors would be counted towards meeting a resource recovery standard.

The 85% recovery standard maximizes the recovery of resources from collected tires and recognizes that a small portion of tire materials is not currently recoverable.

In calculating the resource recovery standard, the regulation prohibits a producer from counting any tire or portion of a tire that is land disposed, incinerated, or used as a fuel or a fuel supplement.

In addition to any comments you may provide on the proposed regulation, the ministry is seeking your specific input on the following criteria for setting the resource recovery standard:

• Requiring producers to recover 85% of the materials from tires collected, specifically whether this rate maximizes recovery while ensuring it is achievable. Note that tires reused or retreaded would count as 100%.

Promotion and education

The proposed regulation requires producers to provide promotion and education to consumers to increase the recovery of tires. Also, anyone who sells tires to a consumer (e.g., a retailer) would be required to make available on its website, information on where their tires could be returned free of charge.

If a seller identifies a separate charge in connection to the sale of tires, the seller is required to communicate who imposed the charge, and how the separate charge would be used by the seller to collect, reuse, recycle and recover tires.

Registering, record keeping, reporting and auditing

The proposed regulation requires producers, persons hired by producers to arrange for services (if applicable) and all service providers (tire collectors, haulers and processors) to:

• Register with the Authority. This registration requirement would apply to any person that accepts, stores, handles, transfers, processes and disposes tires in Ontario, regardless of whether they are part of a producer’s collection network or not. The proposed regulation sets out the information to be registered and the timelines for submitting information through the Authority’s Registry. Residents that take their own tires to collection sites are not required to register.
• Keep records that relate to accepting, storing, handling, transferring, processing and disposing tires in Ontario, and any information that relates to reporting requirements under this proposed regulation.
• Submit reports through the Authority’s Registry. The proposed regulation sets out each party’s reporting obligations, including contents of the reports and reporting frequency.

The proposed regulation requires producers to conduct an independent audit by a qualified certified accountant to verify sales data and the destination and end-use of the processed materials. The audit must be performed annually and submitted to the Authority.

In order to protect consumers from potentially misleading or inaccurate information, sellers who impose a separate charge in connection to the sale of tires are required to conduct an independent audit by a qualified certified accountant on how the separate charge has been used to collect, reuse, recycle and recover tires, and to verify that the separate charge accurately reflects the costs incurred for these purposes. The audit must be performed annually and submitted to the Authority.

In addition to any comments you may provide on the proposed regulation, the ministry is seeking your specific input on the following:

• The auditing requirements and whether a certified accountant, as defined in the proposed regulation, is an appropriate qualification for this purpose.

Additional input

The ministry is also seeking the public’s feedback on the following concepts that are not currently in the proposed regulation but are being considered:

• Collection of Tires:
  • How to ensure that all tires available in a given year are collected when one or more producers have reduced their collection requirement for that year because they exceeded their collection requirement in the previous year by up to 5% by weight. For example, if producers have exceeded their collection requirement by collecting an additional 1,000 tonnes, should that 1,000 tonnes be proportionately added to the amount that all producers have to collect in the following year?
  • How best to provide tire collection services to Indigenous communities in Ontario.
• Management of Tires:
  • Adding a mechanism that would provide incentives to encourage producers to meet resource recovery levels higher than the regulated level of 85%. This mechanism would differentiate between higher and lower valued end uses by giving a higher rating to the higher valued end uses.
  • Determining what activities would be considered higher valued end uses and lower valued end uses for the purposes of meeting the 85% resource recovery requirement.
• Auditing:
  • Whether the proposed regulation should include a standard governing the independent audits of the producer’s management requirements and sales data.
• Waste Reduction and Research and Development Activities:
  • The inclusion of incentives (e.g., reducing collection and management requirements for producers) to promote waste reduction or increase resource recovery and developing markets for the recovered tire materials that would support a circular economy. Examples could include providing incentives that would affect product design elements (e.g., recycled rubber content in new tires), and for undertaking research and development (R&D) activities that would support resource recovery and waste reduction.

Purpose of regulation

The ministry is proposing a regulation under the RRCEA that would make tire producers environmentally accountable and financially responsible for recovering resources and reducing waste associated with tires that they supply into the Ontario market. It would require producers to meet resource recovery standards and to establish an accessible and convenient tire collection network across Ontario to reduce the amount of tires lost to disposal, among other things. Managing our resources more effectively will benefit Ontarians, our environment and economy and support our efforts to fight climate change.

Public consultation

This proposal was posted for a 52 day public review and comment period starting December 01, 2017. Comments were to be received by January 22, 2018.

All comments received during the comment period are being considered as part of the decision-making process by the Ministry.

Please Note: All comments and submissions received have become part of the public record.

Other public consultation opportunities

The ministry will hold consultation sessions (in the form of two webinar sessions) to seek stakeholder feedback and input on the proposed regulation.

The ministry has held a series of consultations with a range of stakeholders (e.g., representatives of tire producers and vehicle manufacturers, municipalities, retailers, industry associations, environmental organizations, waste management service providers, the Authority and others) on:

• April 24, April 25, April 27, May 2 and May 3, 2017 to seek stakeholder feedback and input on the preliminary concept proposal for the tire regulation.
• July 11, July 24 and August 1, 2017 to seek stakeholder feedback and input on the draft policy proposal for the tire regulation.

In addition, the ministry has had ongoing engagement with the Authority and other affected stakeholders throughout the process of developing the policy concept, the policy proposal and the draft regulation.