Proposed producer responsibility regulation for Hazardous and Special Products (HSP)

Description of proposed regulation

Our Made-in-Ontario Environment Plan commits to shifting to a waste management approach where:

• producers are responsible for the waste generated from their products and packaging
• waste is seen as a resource that can be recovered, reused and reintegrated back into the economy

This would support the health of Ontario’s environment, communities and economy.

Ontario continues to move forward with modernizing and transitioning its existing waste diversion programs to new producer responsibility regulations and is proposing a new regulation that would require producers to:

• establish free collection networks for consumers
• manage all collected hazardous and special products HSP properly, including meeting procedures for recycling, where possible, or disposal
• provide promotion and education (P&E) materials to increase awareness
• register, report, provide audited/verified sales data, keep records and meet other requirements
• require producers to transparently reflect any related charges that are intended to be passed on to consumers.

Key principles of the proposed regulation

Under a producer responsibility model for waste diversion, costs would be shifted from municipalities and taxpayers to producers that can better control costs through influence over:

• the types of products and packaging put into the marketplace
• the materials used to make products and packaging
• how the products and packaging are collected and managed at end-of-life

This model would encourage producers to find new and innovative ways to reduce costs and improve the environmentally responsible management of materials.

The proposed regulation is based on the following principles:

1. Improving Environmental Outcomes:

• ensuring HSP is collected and managed at end-of-life in a safe and environmentally sound manner to keep harmful substances out of the environment and protect human health
• providing a robust, convenient collection network across Ontario so that consumers can easily drop off their HSP for recycling or proper disposal
• increasing waste diversion, recovering resources from products that are currently being lost to landfills, and reducing the use of virgin raw materials

2. Reducing costs and burden for businesses:

• providing producers of HSP with increased flexibility for how they collect and manage their products at end of life or meet regulatory obligations
• allowing producers of HSP to contract with other organizations in order to meet their regulatory obligations
• encouraging a sustainable system for industry and consumers by lowering costs, promoting consistency and ensuring ease of access
• enabling producers to develop and implement innovative and cost-effective approaches while still ensuring HSP are collected and managed properly

3. Supporting economic growth and innovation:

• reducing taxpayer burden by shifting responsibilities and costs related to the collection and management of HSP to producers and using non-government oversight and compliance
• encouraging a sustainable system for industry and consumers by lowering costs, promoting consistency and ensuring ease of access
• providing producers of HSP with the flexibility to develop HSP collection and management systems in a cost-effective manner
• supporting competition, innovation and better product design

Implementation and governance

The current Municipal Hazardous or Special Waste (MHSW) Program is scheduled to end on June 30, 2021 and would be replaced by a new proposed Hazardous and Special Products producer responsibility regulation under the Resource Recovery and Circular Economy Act, 2016 (RRCEA). The new regulation is expected to be fully in effect on July 1, 2021, subject to all necessary approvals being obtained.

The Resource Productivity and Recovery Authority (the Authority) would be responsible for:

• overseeing the proposed scheme, including the compliance and enforcement activities related to the proposed regulation
• collecting data through its online Registry to oversee and assess performance
• posting Registry procedures on its website to further clarify producer obligations

Proposed regulation details

We are seeking input on the draft proposed Hazardous and Special Products regulation. The sections below summarize key elements of the draft proposed Hazardous and Special Products regulation. For full details, please review the draft proposed regulation which is attached under “Supporting materials”:

1. Defining responsible persons
2. Designated materials
3. Management requirements
4. Promotion and education
5. Collection and consumer accessibility
6. Registration, reporting and auditing

Defining responsible persons

The proposed regulation sets out a methodology for identifying producers who would be subject to the requirements under the regulation. This ensures that the person with the closest connection to the designated products is made the responsible producer.

We are proposing the following hierarchy to determine producer responsibility:

• the first person responsible would be the brand holder who is resident in Canada and whose HSP are supplied to Ontario consumers
• where no brand holder is resident in Canada, then the first importer of HSP into Ontario and who is resident in Ontario
• where no importer is resident in Ontario, then the person who is resident in Ontario who first marketed the HSP
• where no marketer is resident in Ontario, then the person who is not a resident in Ontario who first marketed the HSP; this would include retailers who are out-of-province and who supply HSP to Ontario consumers through the internet

This producer hierarchy would not apply to either fertilizers or mercury-containing devices, such as thermostats, thermometers and barometers, where we are proposing to only obligate brand owners – and not importers or marketers – as brand owners would be in the best position to oversee the implementation of a P&E program for fertilizers or the management of mercury-containing devices.

To reduce burden, we are proposing to exempt producers that supply a relatively small quantity (weight) of HSP into the Ontario market from all requirements under the regulation , except for recordkeeping requirements, if their supply of HSP is less than or equal to the product-specific minimum thresholds, as defined in the proposed regulation.

Designated materials

The proposed regulation would transition the products managed by the current Municipal Hazardous or Special Waste (MHSW) program, with the addition of mercury-containing devices (i.e. thermometers, barometers and thermostats). The proposed regulation sets out four (4) defined categories of HSP, where each category includes different HSP as well as different responsibilities that the producers of the HSP must undertake:

• Category A Products include oil filters and non-refillable pressurized containers. Producers of these products would have consumer accessibility requirements, P&E requirements, management targets, and would have to properly recycle or dispose of any Category A products that are collected.
• Category B Products include antifreeze (including factory-fill antifreeze), empty oil containers, paints, pesticides, solvents and refillable pressurized containers. Producers of these products would have consumer accessibility requirements, P&E requirements, and would have to properly recycle or dispose of any Category B products that are collected. The ministry is proposing to exempt propane that is marketed in refillable pressurized propane containers from collection, management or P&E requirements in recognition of their long lifespan (refilled and reused for many years) and existing closed-loop collection system for these products. We continue to seek input and feedback to better understand the current management and recovery of these products and implications if these products were to be exempt from regulatory requirements.
• Category C Products include mercury-containing devices, including thermostats, thermometers and barometers. Obligated producers of these materials would have P&E requirements and would be required to properly recycle or dispose of Category C products, if collected by municipalities or other permanent depots or at HSP collection events.
• Category D Products include fertilizers. Producers of these materials would have P&E requirements aimed at encouraging consumers to use up or share fertilizers.

We are proposing that producers of Category A Products and Category B Products would be subject to registration, reporting and auditing/data verification requirements. Producers of Category C Products (i.e. mercury-containing devices) and Category D Products (i.e. fertilizers) would be required to register and report annually.

At a future date, the ministry intends to consult on what additional products could be added in subsequent phases of the regulation.

Management requirements

The proposed regulation requires producers of Category A Products, including oil filters and non-refillable pressurized containers, to meet management targets. These targets set out a minimum amount of HSP that producers need to collect and recycle, calculated based on the weight of these HSP sold into the marketplace, multiplied by the management percentage stated in the proposed regulation.

Only HSP processed by registered processors that meet defined standards and is sent to an end market within the performance period would count towards meeting a producer of Category A Product's management target.

The proposed regulation would prohibit a producer from satisfying the management target by adding the weight of HSP that is land disposed.

Producers of the other categories of HSP would not be subject to management targets. However, producers of Category B Products and Category C Products would still be required to properly manage (i.e., recycle or dispose) any HSP that they collect or receive.

Promotion and education

The proposed regulation requires producers of Category A and Category B Products to implement promotion and education programs to:

• raise consumer awareness about the producer’s efforts to collect, recycle or properly dispose of HSP
• encourage public participation in those efforts

Producers of Category C Products would be required to implement promotion and education programs to inform the public that mercury-containing devices can be returned to municipal depots, select non-retail collection sites and collection events.

We are also proposing that producers of Category D Products (i.e. fertilizers) be required to implement promotion and education programs to:

• educate consumers that unused fertilizers without pesticides are typically not hazardous waste and should not be brought to municipal HSP depots or events
• encourage consumers to alternatively use up or share any leftover fertilizer so that there is no leftover residual product to be managed

To support transparency and protect consumers from potentially misleading or inaccurate information, we are proposing that sellers who impose a separate charge in connection to the sale of HSP be required to communicate:

• who imposed the charge
• how this separate charge would be used by the seller to collect, recycle or properly dispose of HSP

Consumer accessibility

The proposed regulation would require producers of Category A Products and Category B Products to establish and operate a robust, convenient collection network, including both collection sites and events, for consumers to return their HSP at end of life, free of charge. The regulation would set consumer accessibility requirements based on municipal population size and/or number of retail locations to ensure there are collection locations throughout the province, including northern and rural areas as well as Indigenous communities, while also providing producers with flexibility on how they may establish their system.

The proposed regulation would allow for a variety of options that producers can use to satisfy their consumer accessibility requirements. The ministry continues to consider how to design an approach that would support an equitable number and distribution of permanent collection locations (for example, return-to-retail and municipal depots) and collection events. Producers can reduce their required number of permanent sites by implementing alternative collection options, such as call-in “toxic taxi”, mail-in, curbside collection services, or additional collection events. In addition, the ministry is considering an option which would allow producers to offset their required number of collection sites or events in certain municipalities with collection sites or events implemented in other municipalities where collection sites exceed the minimum regulated requirements. This could allow for greater flexibility for producers to use existing sites to offset requirements for establishing new sites and reduce burden. The ministry is considering appropriate conditions to limit the application of offsets to ensure that Ontarians will still have convenient access to collection options. This proposed option is not reflected in the draft regulation which accompanies this posting.

The proposed regulation would include service standards for the various collection options (e.g. hours of operation, types and amounts of materials to be collected) to ensure a level playing field in the service provided.

Producers would have 18 months to establish their collection network and obtain ministry approvals where necessary, while they would be required to maintain the current number of collection sites and events in each municipality, and current service levels.

The ministry recognizes that environmental compliance approvals (ECAs) are required for collection sites in order to receive certain types of HSP (e.g. oil filters, antifreeze, oil containers, solvents and pesticides). Through a separate process, the ministry intends to consider ways to streamline approval requirements by proposing and consulting on amendments to Ontario Regulation 347 (General - Waste Management), made under the Environmental Protection Act, that would make it easier to implement collection sites for HSP that is destined to be sent to a recycling or proper disposal facility.

Registration, reporting and auditing

The proposed regulation would require producers of all categories of HSP, voluntary organizations, producer responsibility organizations and certain service providers (i.e. haulers, processors and waste disposal companies) to:

• Register with the Authority. The proposed regulation sets out the information to be registered and the timelines for submitting information.
• Keep records that relate to the accepting, storing, handling, transferring, processing and disposing of HSP in Ontario.
• Submit reports through the Authority’s Registry. The draft proposed regulation sets out each party’s reporting obligations, including contents of the reports and reporting frequency. Producers would have the option of having another organization submit these reports on their behalf.

In order to reduce burden, we are proposing that collection site operators (e.g. municipalities and retailers) do not need to register and report to the Authority, although they would still be required to keep records related to HSP at their site.

The proposed regulation would require producers to have an independent audit conducted annually by a certified accountant or verification via internal attestation to verify sales data.

Purpose of proposed regulation

The Municipal Hazardous or Special Waste (MHSW) Program was established in July 2008 to ensure that consumer products resulting in waste, which is deemed hazardous or special waste, are collected and properly managed. The MHSW Program manages various materials, including paints, solvents, oil filters, antifreeze, empty oil containers, pressurized containers, fertilizers and pesticides.

On June 30, 2021, all materials managed by the MHSW Program are expected to be transitioned to a new producer responsibility regulation, with the addition of select mercury-containing devices. The main purpose of the new proposed Hazardous and Special Products (HSP) regulation is to make producers environmentally accountable and financially responsible for collecting and managing HSP at end-of-life. This new model means transitioning costs of the MHSW Program away from municipalities and municipal taxpayers.

The new proposed Hazardous and Special Products regulation would also encourage greater consumer accessibility to HSP collection sites or services, which may help prevent additional hazardous materials from going to landfill and reduce the amount of resources from these products that are lost to disposal, which contributes to the province’s broader commitment to address litter and reduce waste in Ontario.

Other public consultation opportunities

The proposed regulation is posted for a 45-day comment period.

The ministry will hold consultation sessions in the coming weeks to seek stakeholder feedback and input on the proposed regulation.

The ministry held a series of online consultation sessions throughout July and August 2020 to receive early input on key policy considerations that informed the main framework of the proposed new Hazardous and Special Products regulation. A broad range of sector stakeholders attended these consultation sessions, including representatives from municipalities, waste management companies, brand owners, manufacturers, producers, retailers, and environmental organizations, as well as First Nations and Tribal Councils.

Additionally, the ministry has had ongoing engagement with other affected stakeholders throughout the process of developing the policy concepts and draft proposed regulation.

Analysis of regulatory impact

We estimate that the proposed regulation could moderately reduce the administrative cost to business.

Under a producer responsibility framework, producers can achieve operational cost savings in several ways, including through:

• negotiating pricing and contracts with service providers at lower prices
• contracting larger volumes of materials to larger businesses that can operate more efficiently due to economies of scale
• re-designing their products
• investing in new innovative waste management technologies and practices