Policy

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.

About Wayne Roberts

Wayne Roberts is a Canadian food policy analyst and writer, widely respected for his role as the manager of the Toronto Food Policy Council, a citizen body of 30 food activists and experts that is widely recognized for its innovative approach to food security, from 2000-2010. As a leading member of the City of Toronto’s Environmental Task Force, he helped develop a number of official plans for the city, including the Environmental Plan and Food Charter, adopted by Toronto City Council in 2000 and 2001 respectively. Many ideas and projects of the TFPC are featured in Roberts’ book The No-Nonsense Guide to World Food (2008). Since 1989, Roberts has written a weekly column for Toronto’s NOW Magazine, generally on themes that link social justice, public health and green economics. In 2002, he received the Canadian Environment Award for his contributions to sustainable living. NOW Magazine named Roberts one of Toronto’s leading visionaries of the past 20 years. In 2008, he received the Canadian Eco-Hero Award presented by Planet in Focus. In 2011, he received the University of Toronto Arbor Award for his role in establishing food studies as a field of study at University of Toronto. Roberts earned a Ph.D. in social and economic history from the University of Toronto in 1978, and has written seven books, including Get A Life! (1995), a manual on green economics, and Real Food For A Change (1999), which promotes a food system based on the four ingredients of health, joy, justice and nature. Roberts chaired the influential and Toronto-based Coalition for a Green Economy for 15 years. He has also served on the Board of the U.S.-based Community Food Security Coalition and Food Secure Canada. He is on the board of Green Enterprise Toronto, an organization of local eco-businesses that’s associated with the Business Alliance for Local Living Economies across North America. He has been invited to speak around the world on strategies that combine food security, community empowerment, environmental improvement, social equity and job creation. Prior to his involvement with environmental issues, Roberts worked for two decades in the fields of community organizing, university teaching, media, labour education, industrial relations and union administration.
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