Ontario's e-waste fees rollout anything but smooth 1 April, 2009 By Liam Lahey

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The OES is an invention of the Ontario Government, charged with overseeing and implementing the WEEE program, under the Waste Diversion Act. Collected fees would be used by the OES to operate the WEEE plan.

Ontario would be following in the footsteps of Alberta, British Columbia, Nova Scotia and Saskatchewan by implementing a waste diversion program for designated electronic products. The purpose is to transfer the cost for the management of electronics waste from municipalities to the companies that produce, sell or distribute the products. Under Phase 1 of the WEEE plan, products designated for the fee includes TVs, desktop computers, portable computers, computer peripherals (mouse, keyboard, hard drive, optical drive), monitors, printers and fax machines. Phase 2 of the plan would extend the green levies to phones, cameras and audiovisual equipment. Phase 2 would follow 12 months after approval of the first phase, the OES website stated.

At issue, from an IT channel perspective is the means by which the program has been brought to market as it puts a lot of burden and responsibility on the channel.

"Everyone's making their best efforts to take a program that was seemingly designed without a whole lot of input from key members of the channel and implement it," remarked Howard Tuffnail, senior vice-president of finance, Tech Data Canada. "Ontario isn't the first province to implement such a levy and from a green perspective, it makes sense, but ultimately it's a fee that's essentially being implemented by the government . . . that represents an additional cost that must be borne by someone in the channel.

"That ultimately falls to the end user because in many cases the fees identified exceed the margin that many of the channel participants make on the product. It's not something a distributor or reseller can eat and bury as a cost of doing business. It has to be passed along to the end consumer."

Carol Hochu, executive director of the OES in Toronto, said the OES was created as a non-profit corporation established by Waste Diversion Ontario (WDO) and it comprised of manufacturers, retailers, and other stakeholders to work cooperatively with WDO to develop a waste diversion plan for WEEE in response to the Minister of the Environment's request.

"WDO submitted the Phase 1 WEEE plan to the Minister on March 31, 2008. There was a broad, transparent and open consultation process. On July 10, 2008, the Ontario Minister of the Environment approved the WEEE program plan, which included a proposed launch date of April 1, 2009," she said. "Since July, OES has been working tirelessly on implementing the province wide Phase 1 program while at the same time developing the Phase 2 WEEE program plan, which is due to the Minister of the Environment in July 2009 -- a very challenging undertaking given the extremely tight timeframes which have been set by the government."

She added the WEEE program aims to collect 75,000 tonnes of waste electronics such as old computers and TVs over the next five years. The intent is to divert them into reuse and recycle programs.

Brent Clooney, senior director and legal counsel for Ingram Micro Canada, said Ingram Micro understands the OES' big picture but he too said there is much confusion surrounding Phase 1 of the WEEE program.

"There's definitely some information missing and there's a last minute scramble. I hope we get a lot of those things nailed down before the April 1st launch or shortly thereafter," he said. "The challenge is because Ontario has differences in terms of how (the program would) be administered behind the scenes, so how we're going to sign up with our customers and vendors so we don't have to be charged by our vendors . . . and for our customers we don't have to charge them.

"Because the channel is so complex . . . there's a lot of people asking questions and OES is trying to manage that, but there isn't a clear rollout that we've seen in some of the other provinces."

Clooney is also a board member of B.C.'s electronic stewardship program (Electronic Stewardship Association of British Columbia) on behalf of Ingram Micro Canada.

"The challenge for Ontario, you have a lot of players involved in industry associations involved for the other provinces and in a lot of ways, it's similar," he said. "But in other provinces, they've been able to say 'it is a visible fee at the point of purchase' and mandating what will be on the invoice; that clarity is there. In the Ontario program, they can't say that as strong because of legislative restraints . . . it's not as clear at the point of purchase for the end consumer."

In other provinces it's more an at-retail application, Tuffnail said. The challenges for Ontario's electronics manufacturers, distributors, resellers, and retailers is working out who's going to do what to whom through the channel.

"I don't know if any one province is a model . . . we certainly would say Ontario's program as it's laid out doesn't represent the best practices of learning as laid out in other provinces," he said. "Certainly, as key participants in the channel, Tech Data was never approached or invited to any of the discussions as to how best to roll this thing out and to our knowledge, neither were any of our reseller partners."

What's more, Tech Data Canada said it received very little insight from any of its major manufacturers on the subject.

"I'm not sure what exactly the consultative process was, but if there was one it didn't reach out to the core constituents in the channel," Tuffnail added.

Clooney said in each provincial program, manufacturers and retailers have had good representation and consultation.

"But the distis and the channel have been absent from the process (in Ontario) for the most part so far," he said. "We support these types of green levies . . . we want them if it's going to be a fee system with harmonization with other provinces so we can administer it with as little impact as possible to our business and to our customers' businesses."

Michelle Warren, principal analyst, MW Consulting, said the premise of the program is good and significant for the times.

"The brand owners (vendors) are responsible for collecting and remitting the funds . . . they should add an extra line to the invoice when issued to the distis and resellers. This charge should (ideally) be passed along to the customers. The challenge will lie in how that is done -- built into the product price or listed separately," she said. "If built in, it is hidden. Full disclosure works best, but it might cause an argument with end-users.

"That said it could cause a bit of a logistical hassle for some reseller partners too. Adding a line onto an invoice to collect the funds is the simplest way to collect the money for remittance."

Customers would also need to be educated about the initiative, she added. But on the whole, Warren said the timing is good for the WEEE plan rollout in that it gives IT partners the opportunity to push Q1 product sales as a way for their clients to save money.

When asked if consumers in Ontario have been adequately informed of the forthcoming green fees, Hochu said consumers and businesses could search for the nearest collection site by going to www.dowhatyoucan.ca on April 1 and selecting "electronics".

Meanwhile, a second public consultation concerning Phase 2 (face-to-face and webinar options) is scheduled for April 30 in Toronto. The Revised (Phase 1 and 2) Program Plan Development consultation document is available at: www.ontarioelectronicstewardship.ca/consultation/phase2_1_revised/plan_dev_phase2_1.html.

For more information, surf to www.ontarioelectronicstewardship.ca.