Packaging “tax” — or is it fee? — comes to Ontario

Every time I see a shopper at the checkout counter stuff an armful of food into a purse or briefcase, I’m reminded how far Canadians will stretch themselves to save the five cent tax on plastic bags and do the right thing to cust back on packaging waste.

Now we’re being asked to stretch some more.

Since July 1, Stewardship Ontario, an agency of the Ontario government, has imposed fees that either have to be picked up by manufacturers or customers of a wide range of everyday household products that contain toxic or dangerous materials. The packages on products such as fertilizers, pesticides, anti-freeze, solvents, hairspray and the like have enough potentially toxic residues that they can’t be recycled or landfilled alongside containers for water, beans or catsup. If the additional cost of handling these contaminated containers isn’t picked up voluntarily by the manufacturers, the consumer has to fork over the difference at the checkout counter.

Critics call this fee a tax grab. Since tax grabs are much less popular than recycling, the criticism is catching on, fuelled by public anger about new HST taxes that the provincial government launched the same day.

Later this year, I will be nominating this same-day launch of a HST tax and toxic container fee for the annual Duncecap Award. To strengthen this award nomination, I will point out that imposition of the new fee was not preceded by public outreach or education from Stewardship Ontario, the provincial agency responsible. Staff in the PR department of Stewardship Ontario told the media that the $2.5 million education campaign would have most impact after the new fee was actually being charged. As if this wasn’t duncecap-worthy on its own, agency staff also bungled the instructions to retailers on precise taxes to charge, and the resulting inconsistencies have led to firestorms of protest.

It bad launch notwithstanding, the new Ontario policy deserves kudos for three reasons.

First, this is a first and precedent-setting move in North America to bring the full costs of everyday toxic materials into public view. The costs hit when and where it hurts when the person who formerly reached casually for a toxic choice has to pay at the checkout to cover the costs of handling a contaminated container.

Then comes the hidden bonus to careful shoppers. If shoppers are ticked off by the extra cost and want to avoid paying it, all they have to do – and this is why it’s called a voluntary fee, and not a compulsory tax – is to buy a product that has no pollutants and doesn’t carry a fee for handling a container contaminated by pollutants. If shoppers can wrap their heads around that reasoning, they’ll switch to a safer household product and avoid the fee.

That’s why greens have long advocated the “polluter pay” principle. It puts consumers in the power position by saddling them with fuller responsibility for their unwise choices. As experience in Germany and other jurisdictions has shown, that can create change without the muss or fuss of redtape and detailed government regulation. The marketplace does the work.

Then comes the hidden bonus to taxpayers. If, as was typical until now, consumers pay no fee to cover the extra costs of managing the polluting products they bought, the full lifecycle cost is paid by innocent bystanders, the taxpaying public. Following the standard rule governing environmental practices in North America – no good deed goes unpunished – green shoppers paid twice under this regime. They pay extra at the checkout counter to buy “green” cleaners and so on. Then they pay a second time when they pay taxes to cover the public costs of cleaning up the land, air and water polluted by the product of another person who saved money by buying a polluting product. It’s like asking non-smokers to pay for second-hand smoke.

One win-win way to reduce taxes is to reduce costs to the public by preventing the need for expensive clean-ups. Household toxins, for example, create countless costs associated with air, water and land pollution and emergency medical care for children and pets who mistakenly lick or swallow the contents.

By logic, the more that governments charge fees which cover the real social, health and environmental costs of irresponsible business and consuming practices – how about a fee on imported foods to cover smog, highway congestion and road damage from trucks, for example? – the less that taxes have to pay the freight for bad decisions by individual businesses and consumers.

Taxes should cover costs of services providing goods for the general public – education, for example — not the costs of dealing with “bads” that serve no purpose other than shortsighted savings for individual companies or consumers.

By logic, anyone who opposes involuntary government tax grabs should be a fan of voluntary government fees. Mike Schreiner, head of the Green Party of Ontario, sees the Liberal government’s new fee policy as a small step toward “creating a reward in the marketplace for companies producing green products.” He has his own explanation for why the government agency bungled the public education. They oppose Green-style holistic tax changes – minimal income taxes for people on low incomes, lower payroll taxes for workers and higher fees for polluting practices, all designed to shift the tax burden onto “bads” rather than “goods” – and so end up with piecemeal changes that have no vision behind them, he says.

Whatever anyone’s opinion on that, it’s better to avoid the new packaging fee by going green than to pay taxes from not having the fee. It’s as simple as pay now or pay more later. Sometimes, the best things in life are fee.


  1. dave herd says:

    With all due respect sir, you couldn’t be more wrong.

    This helps divert toxic waste from our landfills how exactly?We pay the fee and then are being asked to drive to at least 20 different drop off stations all at our own time and expense. First I won’t be doing this. Second ,how is it ecologically sound to have everyone driving all over town to dispose of a few items burning fossil fuels and spewing pollution into the air?

    What is clear is that there has to be curb pick-up for these products or the program is useless.Either that or at least a deposit/refund system to encourage people to drop off these items.

    Further, had you looked into this story at all you would know that this fee is being applied to products that are not toxic at all such as—organic fertilizers,potting soil,grass seed, baking soda, vitamins and all soaps and detergents whether environmentally friendly or not-so where is the incentive we have to buy green products? It is also being applied to absolutely necessary products such as prescription drugs, diabetic needles and fire extinguishers.

    Where is the incentive for companies to go green when they are just passing these fees onto consumers?

    What seems clear, Mr. Roberts, is you have seen the word “eco” used and have automatically assumed that it is a good thing.Well you ,in fact, are wrong.As an environmentalist, I was hoping for better thought out strategy from yourself.Of course we all want to see toxic waste out of our landfills.This program does not do this–it just costs everyone money.

    Back to the drawing board on this one Wayne.

    dave herd

  2. Thanks for your comment on this, Dave.Your point on the enviro toll of driving these packages to special landills or drop-offs is well-taken. That’s why my case doesn’t rest on that. My argument is about making the real price of toxic goods show and have an impact on the “bottom line” of the pocketbook, thereby convincing smart shoppers to swith to a green product, which does indeed cost more at the cash register but which costs us all a lot less in the long run.

  3. dave herd says:

    Wayne did you not read my entire post -please reread it.

    THESE FEES ARE BEING APPLIED TO NON-TOXIC PRODUCTS AS WELL.So where is the incentive to go green? Further they are also being applied to products that are absolutely necessary—prescription drugs ,diabetic needles fire extinguishers etc.

    They are also being applied to toxic materials that everyone uses–paints,solvents,batteries (whether rechargeable or not) and light bulbs.
    So we are all going to have to drop these products off.And in case you think solvents are unnecessary -how am I to clean my bike chain otherwise?

    I agree with what you say in theory, but the Liberal government is no way encouraging the public to do this, which is precisely why you should be trashing this scheme.What people like you and the the Green Party of Ontario needs to be doing is to be lobbying the government to getting rid of fees on green products and getting curb pick-up for the toxic products most of us use for which there are no alternatives.

  4. d.d. zyne says:

    Dave, you’re making a point, but the first point Wayne was making is that any added cost adds to the care with which the user uses the toxic product. If gas costs twice as much, we tend to find ways to use less.
    As for pick up,love to see neighborhood pick-up spots where this could be dropped for future pick up. Fire-stations? Churches? GAS STATIONS? We have this in our 173 unit co-op and once a month they are taken to a safe disposal site.
    There is also a place for all batteries at my wife’s office bldg.
    Prescription drugs and needles? That does seem under-thought.

  5. I’m not opposed to paying a fee for packaging or disposal of toxic components — as long as it’s fairly assessed and actually used for its intended purpose. The problem, at least as far as I see it, is that these fees have not been implemented transparently, and there’s no evidence that materials will be disposed of in an ecologically sound manner… See more — I’ll still be putting them out with the household waste where they’ll end up in a landfill or be recycled into some lower-order product. Not to mention that I’ll be paying twice or three times over for disposal, since I pay already for garbage pickup through Toronto’s bin fee. In short, I see this as a proliferation of taxes that accomplishes nothing but pay the salaries of those promoting them.

    Having said that, I’d love to be able to return packaging to the store that sold it to me.

    As Dave points out, there’s no incentive for a consumer to choose less harmful products if one is charged a fee even for ecologically safer items.

    I guess, in short, I’ll say that putting the onus on consumers to change their behaviour seems wrong-headed to me when this doesn’t give us a meaningful opportunity to do so. I’d rather see manufacturers pay for packaging and ecologically harmful products — that’s where the disincentive might have some effect.

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