Newspaper publisher calls province’s proposed recycling fees ‘extortion’

The province's plan to shift recycling costs to producers from taxpayers has hit a roadblock with one large industry group.

In some parts of the Regional District of Central Kootenay

The Regional District of Central Kootenay is calling on the province to make the newspaper industry join a provincial recycling stewardship program. However, an industry executive says if they are forced to pay proposed fees, a number of papers would have to shut down to meet the costs.

“We simply can not afford the millions of dollars this would cost the newspaper industry,” John Hinds, the CEO of Newspapers Canada, an industry group, told the Star. “It would put a significant number of newspapers at risk if we were forced to pay the Multi-Material BC (MMBC) fees as they stand. Look at what happened in Nanaimo and Kamloops [where newspapers recently closed]. Look at what is happening around the country.”

The RDCK board passed a motion in February to urge BC’s environment minister to pressure the industry to comply with regulations that require producers of paper and packaging to pay for the recycling of their products.

MMBC is the non-profit stewardship organization tasked with getting BC industries, rather than taxpayers, to pay for recycling the paper and packaging it produces. MMBC collects, processes, and sells recycled material, and about 1,300 producers of paper and packaging in BC pay them to do this. (MMBC collects Nelson’s recycling, but it’s not noticeable because the organization contracts the work to the city.)

Businesses that produce paper and packaging are required by BC law to have an approved stewardship plan to recycle their waste. But the newspaper industry has so far declined to join MMBC, in an apparent contravention of that regulation. This is a problem for the RDCK.

MMBC doesn’t cover all areas of the province. It has never set up shop in some rural areas, including some parts of West Kootenay, because it says it can’t afford to expand its services further until the newspaper industry signs on. MMBC wants the newspaper industry to pay $200 per ton to recycle the province’s newsprint. According to Hinds, this would amount to about $10 million per year.

Shutting down newspapers?

“To pay that price would mean for example in the West Kootenay I would close three marginal small town newspapers, and curtail the number of copies that we put out,” says Rick O’Connor, the president of Black Press, which publishes six papers in the West Kootenay including the Star.

Asked to respond to the industry’s contention that it would have to close papers, MMBC’s Allen Langdon said “This regulation has been in place since 2011. They have had a long time to think through how it would comply with the legislation and try and work something out with government.”

Some RDCK population centres including Nelson, Kaslo, and Castlegar have contracts with MMBC, but the rural areas don’t, and it is costing the regional district to recycle in those areas, according to chief administrator Stuart Horn. The RDCK has asked MMBC to take over, only to be told they can’t afford to take on new areas until the newspaper industry comes on board.

$33-million in the black

Hinds says he doesn’t believe MMBC when it says it can’t afford to expand their service because the organization reported a $33-million surplus in its last fiscal year. Langdon says that money is a reserve.

“Our entire program costs $80 million per year,” Langdon said, “so we set a target of a reserve of about half the annual requirements. We are a non-profit so we had always planned to develop a reserve because we don’t have assets or other types of capital to rely on if commodity markets drops.

“If I were to expand the program,” he continued, the current members who are meeting their obligations and are good corporate citizens would be forced to subsidize the companies that have not joined and not met their obligations.”

By “members” Langdon means individual companies including “consumer goods companies, fast food restaurants, banks, utilities, anyone supplying printed paper or packaging to the resident.” Materials covered include standard blue box materials, paper, newsprint, cardboard, plastic packaging, tin and aluminum cans, aerosol containers, plant pots, styrofoam, and plastic film.

A contentious near-agreement

O’Connor and Hinds say MMBC is asking for more money from newspaper publishers than recycling programs in other provinces. They say the original deal with MMBC would have seen the newspaper industry contribute in-kind, with millions of dollars worth of advertising promoting recycling. Langdon disagrees and says there was a draft agreement but MMBC didn’t sign it because “our members could not agree because it would have meant them subsidizing the newspaper industry.”

O’Connor disputes that version. “MMBC had their lawyers write the agreement and presented it to newspapers to sign. After some negotiations, newspapers signed the agreement. MMBC was then taken over by the Canadian Stewardship Services Alliance who refused to sign their own agreement.”

Comparisons with other provinces

Hinds says MMBC’s asking price of $200 per ton is “four or five times what newspapers pay in other provinces.”

Comparison with other provinces is complex because each province has different regulations and systems. In Ontario and Quebec, newspaper publishers pay in-kind with advertising. In Manitoba the government pays the newspaper industry’s fees. In Saskatchewan newspapers are exempt from the system.

MMBC is governed by the Canadian Stewardship Services Alliance board which includes representatives from Walmart, Loblaws, Unilever, Proctor and Gamble, Coca Cola, Nestlé, and others.

“[In all provinces] the idea is that everyone contributes but the newspaper industry doesn’t want to,” says Langdon. “From our perspective our program is probably the most progressive and leading edge in the country and the one where we are having the most success engaging directly with producers on how to work with them to adapt to change their packaging. That is exciting and is something we should be proud of.”

Resolving the stalemate

Asked what the newspaper industry is doing to resolve this stalemate, O’Connor admitted nothing has changed. “We have been trying to work with the provincial government to come up with our own stewardship plan to meet the obligations under the regulations but not through MMBC, and we were hoping the government would approve StewardsChoice, which we propose to be a competitive vehicle to MMBC. It is not that are opposed to recycling, it is that we are opposed to being extorted by MMBC.”

In January the provincial government turned down StewardsChoice’s application to become a recycling alternative to MMBC.

Hinds says the government made a mistake lumping newsprint in with packaging. He says newspapers should be treated not as a package “like a yogurt container” but as “a product with social value” which, he adds, brings higher prices on the recycling market than most kinds of packaging, and which is already being successfully recycled by 80 per cent of BC residents. O’Connor said MMBC is keeping the revenue of recycled newsprint, estimated currently at $60 per tonne.

Message to the RDCK board

Asked what he would say to the RDCK board, O’Connor said “If MMBC is telling you the reason they can’t increase service is because newspapers have not paid their exorbitant fee, I would say that that is not true. We never indicated that we would pay their fee and we will go to court before that happens. The industry is pretty adamant about this. MMBC is using this fantasy that newspapers are not paying this $200 as an excuse for not serving the West Kootenay.”

Asked the same question, Hinds said “You have to look at the value of newspapers in the community and it is an untenable cost to newspapers currently, and we simply can’t afford it. We would absolutely have to shut some papers down.”

Langdon, asked what he would say to the RDCK, said, “I think the action being taken by the regional district [lobbying the minister] is the only course of action available to them at this juncture.”

The provincial government’s position

The Star asked the ministry what it is doing to bring the newspaper industry into the fold. It replied by email: “The ministry continues to pursue compliance with all freeriding producers, including newspapers and is in active discussions with the newspaper industry to find a solution.”

 

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