Contributing Lawyers

Canada

Cyndee Todgham Cherniak

United States

Susan Kohn Ross

Australia

Andrew Hudson



The Waste Diversion Act, 2002 - Let's Start the Analysis Part I

This posting been prepared with the assistance of Dana Doidge and Rosetta Tang, summer students at Lang Michener LLP.

The Stewardship Ontario programs have come under fire, and rightly so.  What is interesting is the extent to which the activities diverge from the legislative authority under the Waste Diversion Act, 2002.  In this post, the first of many, I will start with some of the basic aspects of the actual legislation in order to start to highlight the problems that must be corrected.

Waste Diversion Act, 2002

The Waste Diversion Act, 2002 (“WDA") sets out to promote reducing, reusing and recycling waste. The WDA provides for the development, implementation and operation of waste diversion programs.

a) What are Waste Diversion Programs?

According to the WDA, waste diversion programs may include:

  • activities to reduce, reuse, and recycle waste;

  • research and development activities;

  • activities to develop and promote products that result from waste diversion programs; and
  • educational and public awareness activities to support waste diversion programs.

The WDA does not state what types of activities must be included within a waste diversion programs. As a result, waste diversion programs may be developed in a flexible manner, but must be developed to meet the objectives and purpose of the WDA. If the programs do not meet the above criteria (that is, fit within the parameters of the WDA), arguably the programs are inconsistent with the WDA and ultra vires (meaning without legislative authority).

b) Who is Responsible for Developing Waste Diversion Programs?

As set out by the WDA, Waste Diversion Ontario (“WDO") is responsible for developing, implementing and operating all waste diversion programs that are created under the authority of the WDA.

When requested to do so by the Minister of Environment and Energy (“Minister") or another designated cabinet minister, WDO must develop a waste diversion program in co-operation with an industry funding organization (“IFO") (see below for a discussion of IFOs).

Together, the IFO and WDO draft and submit a program proposal to the Minister. The proposal ought to set out the objectives of the waste diversion program and is to include a detailed breakdown of all costs associated with the program, including an outline of who will bear the costs. Ultimately, the Minister must decide whether or not to approve the proposed program.

Along with developing and implementing the programs, WDO must enhance public awareness of the programs and ensure the programs affect Ontario’s marketplace in a fair manner.

(Note: a copy of the Minister’s program request letter addressed to WDO for the municipal hazardous or special waste program can be found on WDO's website at: www.wdo.ca/content/. The corresponding proposal prepared by WDO and the IFO, Stewardship Ontario, can be found on WDO's website at: http://www.wdo.ca/content/?path=page80+item125629.)

There are three IFOs established to date:

  1. Stewardship Ontario
  2. Ontario Tire Stewardship
  3. Ontario Electronics Stewardship

c) What is Stewardship Ontario?

Stewardship Ontario is the IFO designated by Ontario Regulation 28/08 for waste diversion programs dealing with municipal hazardous or special waste and blue box waste. According to Ontario Regulation 542/06, municipal hazardous or special waste includes waste that consists of corrosive materials, flammable materials, toxic materials, aerosols, fertilizers, paints, lubricants, etc. Neither the WDA nor any of its regulations define the term “waste".

d) What legal powers does Stewardship Ontario have?

All of Stewardship Ontaro's powers are traceable to the WDA and regulations made pursuant ot the WDA (Ontario Regulation 28/08 and Ontario Regulation 542/06) According to the WDA, Stewardship Ontario as an IFO can make rules:

(a) designating persons or classes of persons as stewards in respect of the designated waste;

(b) setting the amount of the fees to be paid by stewards or prescribing methods for determining the amount of the fees;

(c) prescribing the times when fees are payable;

(d) requiring the payment of interest or penalties on fees that are not paid;

(e) exempting stewards or classes of stewards from paying fees subject to conditions and restrictions as may be prescribed by the rules;

(f) requiring stewards to keep records prescribed by the rules and governing the submission of those records to persons specified by the rules and the inspection of those records by persons specified by the rules;

(g) requiring stewards to provide reports and other information to persons specified by the rules.

According to the WDA, a person who is designated under the rules as a steward must pay to the IFO any required fees as set out by the rules. However, the WDA does not give an IFO the power to impose fees. That power is missing in both the WDA and the regulations. Stewardship Ontario does not have the legal power to give itself the power to impose ecotaxes,

Provincial officers may investigate offences under the WDA and anyone who is in breach of the WDA or the rules is liable to a maximum fine of $100,000.

e) Who is a Steward?

I will start with who is not a steward - Stewards are not the general public and, arguably, are not retailers of new goods, importers of new product or manufacturers of Canadian-made goods.

The WDA makes it clear that to be a steward, one must have a commercial connection to the waste. The term “commercial connection" is not defined in the WDA, however, for the purposes of the municipal hazard and special waste program, Stewardship Ontario provides a definition within the rules and the definition is paraphrased as follows:

A person has a commercial connection with municipal hazard and special waste if they derive an economic benefit from the waste when it is sold, leased, donated, disposed of, used, transferred possession of or title in, or otherwise made available or distributed for use in the Province of Ontario.

It is questionable whether Stewardship Ontario’s definition of commercial connection is legally valid as the WDA does not confer upon Stewardship Ontario the power to define terms within the WDA.

Whether a company or person is a steward is determined by IFO rules.

f) Who Has to Pay Fees to Stewardship Ontario?

The WDA sets out that stewards are to pay the fees (or ecotaxes) as set out in the IFO rules. The WDA does not impose a payment obligation on anyone who is not a stewards (and therefore, does not impose payment obligations on consumers). The WDA does not grant stewards the authority to pass on the ecotaxes payable by stewards to consumers.

It is important to note that the WDA explicitly states that IFO rules that designate a company of a person are not valid unless the steward has received a copy of the rules or has written notice of how to obtain a copy of the rules. This leaves an important due process question as to whether Stewardship Ontario has taken the legally mandated steps required to communicate its rules in a transparent manner. If any stewards did not receive a copy of the rules, an argument may be made that they do not have to pay the ecotaxes and any penalties for failure to pay ecotaxes are ultra vires.

Stewards may have an opportunity to recover ecotaxes (and any penalties) paid to Stewardship Ontario since the start of the blue box and municipal hazardous waste/special waste programs. We would be pleased to discuss this further. Please call Cyndee Todgham Cherniak at 416-307-4168.

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