MMSW Publishes Revised Program PlanNews posted on July 29, 2015
As you are aware, on December 18, 2014, the Ministry of Environment (MOE) announced that it would exempt businesses with revenues of under $2 million from the Multi-Material Recycling Program (MMRP), and introduce a flat fee of $500 per year for businesses with revenues of $2 – $5 million and newspaper publishers. The government also stipulated that the Minister of Environment would approve fee rates for a two year transition period. As MMSW’s original Waste Packaging and Paper Stewardship Plan was un-workable as a result of these exemptions, MMSW has spent the past seven months working to identify a reasonable path forward while accommodating these changes.
MMSW is now in a position to share with stewards a revised stewardship plan, which can be accessed here. Our intention is to gather any comments from stewards by August 28, 2015, submit the revised plan for board approval in September, then submit it to the government in late September for its approval. Providing the government can approve the plan by mid-October, allowing enough time for us to execute funding agreements with municipalities and prepare for launch, the expected launch date will be January 1, 2016.
Below we have provided an overview of the primary revisions to the stewardship plan.
How does the revised Stewardship Plan affect MMSW stewards?
For stewards, the most significant difference between the original plan and the revised plan is that the 2015 Fee Schedule is contained in the stewardship plan and will apply for the first two years of the program. In approving the program plan, the Minister will, by extension, approve the fees for the first two years as stipulated in the December announcement.
After two years of program operation, the fee rates/schedule will be revisited and fees re-set based on the quantities of packaging and paper annually reported by MMSW members and the annual costs to implement the program.
Please note that the 2015 Fee Schedule presented in the Annual Steward Meeting last fall has not changed as a result of the revised stewardship plan. You can view the fee rates here.
The other key changes to the plan focus on a new method for calculating municipal funding that ensures MMSW is only paying for its members’ packaging and paper. The plan stipulates that MMSW stewards will finance up to 75 per cent of municipal program costs to manage the materials supplied by members into the residential marketplace. No costs associated with packaging and paper supplied by exempt and non-compliant stewards, industrial, commercial or institutional waste, non-designated waste, or packaging that is managed by other product management programs, will be funded by stewards.
Municipalities will be paid a fixed payment per household served. The actual amount per household will be calculated by November 30 of each preceding year based on the quantities reported by stewards in that year’s reports.
New methodology for calculating municipal funding
The revised stewardship plan sets out a methodology for calculating a fixed amount per household that municipalities will receive. Establishing an amount per household enables MMSW to ensure stewards are only paying for the management of their tonnes supplied, and not the tonnes that belong to permanently or temporarily exempted businesses, as well as businesses that are non-compliant (free-riders).
Paying municipalities a fixed amount for each household serviced is a change from the original approach of paying on the basis of tonnes collected. This change was necessary as MMSW could not pay for tonnes of non-members and the breadth of the exemptions made it impossible to estimate what deduction should be applied to those reported tonnes. As such, the household payment will be calculated once the MMSW member stewards reported tonnes are finalized. It is only these tonnes that will be considered when the household payment amount is calculated.
The revised municipal funding methodology uses the following data points:
- An assumption that municipalities capture 60% of the waste packaging and paper (WPP) supplied by MMSW members in residential collection systems.
- $140 per tonne, which is the weighted average of the funding rates in the original stewardship plan using the quantity expected to be collected.
The methodology that will be used to determine the per-household amount for municipalities is a five step process as illustrated in the following diagram (click on diagram to enlarge):
This method of calculating the funding available for municipalities will be in place during the initial transition phase (established by the MOE’s December 18 announcement) as well as the first two years following the transition phase when newspaper publishers and businesses with revenues between $2M and $5M are reporting and paying fees to MMSW.
Program launch and steward financing
Providing the government approves the revised plan by mid-October, MMSW will be able to launch its program on January 1, 2016.
In this case, stewards will receive their first invoice for the MMSW program on January 1, 2016, with a 30 day payment period.
The MOE has been briefed on the components of the revised plan, and we have also had an initial briefing with municipal associations who are now discussing the plan with their members over the summer and providing feedback to us by the end of August.
Join us for a webinar
We are planning to hold a webinar on August 12 (for more information and to register, click here) to take stewards through the changes to the Stewardship Plan and answer any questions about the MMSW program.
The intention is to submit the revised Stewardship Plan, following any revisions made as a result of comments from stewards and/or municipalities, to the board on September 24, and then shortly after submit the plan to the MOE for approval.
- Revised Stewardship Plan
- Original Stewardship Plan
- MMSW Fees
- Membership Agreement (you do not need to sign a new membership agreement if you already signed one in 2014)
MMSW is inviting all stakeholders to review the revised stewardship plan and provide any comments by Friday August 28, 2015. Click here to read MMSW’s revised Waste Packaging and Paper Stewardship Plan.