Ontario Tire Fee Increase Explained

Mar 28, 2013

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Ontario Farm Group in talks with Ontario Tire Stewardship

By , Farms.com

An increase in tire cost has sparked a heated discussion among Ontario farmers recently, with a lack of information on the issue coupled with confusion resulting in some misreported facts.

Andrew Horsman, Executive Director of Ontario Tire Stewardship (OTS) speaks to the issue in an exclusive interview with Farms.com.

The OTS is a not-for-profit industry corporation that is responsible for making sure that 100% of Ontario’s scrap tires get recycled. It was formed in Sept. 2009 and to-date has 14 locations concentrated primarily in Brampton, Toronto (GTA) and the Ottawa area.

“We are responsible for making sure that they [tires] don’t get illegally dumped, stockpiled, or burned – that they get recycled here in Ontario,” said Horsman.

The corporation was formed by companies like Canadian Tire that supply tires in Ontario, in response to legislation that was introduced by the provincial government that required them to create a recycling program for tires at the end of life.

Under the Act, companies that supply tires were made responsible for not only creating a solution for end of life tires but also funding it. Every time a company brings in a new tire to sell in Ontario they are responsible for paying a fee to OTS – which covers the costs of collection, transportation and recycling of that tire.

“The program has been extremely successful,” says Horsman noting that it has attracted new recyclers into the province. Roughly 40 million dollars of investment has occurred over the past three-years, new recycling facilities have been built, and existing recyclers have added capacity.

Horsman explains that since the program was launched, the off-road market has been challenging for OTS, largely because of its diversity and that the province requires that they manage a full-range of tires.

According to Horsman, the recent spike in fees is because the original fees that were previously being charged were insufficient to cover the costs of managing off-road tires.

“What you are seeing now is a change in the rates to reflect the true cost of recycling those tires,” explains Horsman.

The fee increases are varied because it’s now being calculated based on weight. “Weight is the primary driver of cost – we transport things based on weight, we recycle things based on weight,” says Horsman.

Weight based classification allows OTF to more equitably assign cost to a tire.

Earlier this year, the government proposed an amendment, regulation 84/03, to the legislation that brought the program in the first place.

“That regulation spells-out in some detail, how we must go about calculating costs, how we go about assigning costs to different categories, how we calculate our fees, how do you implement those fees,” explains Horsman.

There was at least one consultation meeting held in Aug. 2012 that was attended by industry stakeholders including farm groups like Ontario Federation of Agriculture (OFA). While OFA has confirmed with Farms.com that there was a staffer who attended that meeting, the amount of tire increase came as a surprise to the farm group.

“While we are a private company, we absolutely do consult with the stakeholders who are affected by the changes,” said Horsman.

Both parties (OFA and OTF) confirm that they are currently in ongoing discussions on the issue. Horsman presented to OFA last week and will be meeting with them again early next week.

Horsman admits that the process may have been ambiguous and long, but says that OTF is now working with OFS to identify what the major issues are and how they might be able to work together to help mitigate the cost burden on farmers.

“The introduction of the new fees has been driven in part by that regulation,” concludes Horsman.

Editor’s note: Farms.com would like to thank Andrew Horsman, Executive Director of OTS for reaching out to our outlet to help better communicate this issue with Ontario farmers. Our outlet has heard the frustrations of farmers themselves and we hope that this story will help bring some clarity to the issue.

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