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Eco fees another quagmire for McGuinty

It’s been a bad summer for Dalton McGuinty, whose popularity was already low thanks to a string of screw-ups, including the eHealth debacle. Then along comes the G20 summit, a fiasco fraught with legal issues and abuse of the public and its rights.

Just a week later, Ontarians were hit with the new HST. Sold to us as a way to streamline business practices and encourage job creation, the tax is but the latest step in the process of moving taxes off of corporations and onto individuals.

Also rolled out July 1 was a series of new environmental fees on a host of products, from compact fluorescent light bulbs to fire extinguishers. The goal is to have manufacturers of products contribute to the costs of disposal or recycling of their goods. That in itself is not a bad idea, but the implementation has been nothing short of sorry, with the inadequacies of Stewardship Ontario blowing back on the province.

Industry run, Stewardship Ontario is not a government agency, but is regulated by it. Created in 2004, its mandate is to oversee the Blue Box program, expanding in 2008 to encompass the Municipal Household and Special Waste program, which saw so-called eco fees introduced on a handful of items. At the top of the month, that list expanded to 22 categories of goods deemed to require special handling at the end of their useful lives.

For the most part, we don’t pay up front for the lifecycle of the products we buy. Neither do the makers of goods.

Typically, the costs of waste collection – later augmented by recycling – and pollution have simply been what economists call externalities: someone other than the manufacturer picks up the costs. That someone is the collective we: our taxes pay for waste management and for the health care costs that come from a polluted environment. Individually, we pay with our wallets and with our health. The particulate matter in the air so prevalent on smog days comes with a cost not paid for by the manufacturers pumping the stuff out of their smokestacks.

Introduced July 1, the same day the HST came into play, the eco fees were seen by many of us as yet another tax grab. That sentiment was enhanced by a lack of transparency, and by a huge number of cases where shoppers were charged rates far above what was mandated. In some cases, the fees differed from store to store.

Adding to the confusion is the fact that some manufacturers are simply absorbing the fee or rolling it into their wholesale prices, while others are passing it on to their retail customers. At the store level, merchants can eat the costs or simply pass them on to consumers.

Facing a public backlash, the province is now talking tough with Stewardship Ontario, calling for clear labeling of eco fees so consumers know upfront what to expect. The government is also keen to assure us the fees are not taxes: the money does not go to the province, but is used to pay for disposal of hazardous materials. Of course, they’ll pass those costs onto us, the consumers. Again, that’s fair enough: they make it, but they do so for us.

This practice could act as something of a deterrent, making us think twice about buying some goods, both because of the cost and because of our new awareness that items don’t simply disappear after we dump them.

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