Environment Committee on April 12th, 2021

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Thank you, Mr. Chair.

John, I wanted to quickly jump back to you. I know you didn't get to finish your opening statement. Do you have anything that you wanted to quickly add or finish up with before I go to my questions?

[John Galt]

The only key points I wanted to make were around the alternatives.

I think everyone here agrees that keeping plastics out of the environment is the right issue. The fundamental concept I wanted to get across is to say that if we move to an alternative material, let's make sure that it's not going to have a larger environmental impact in production, that it's not going to have a larger environmental impact in collection and reuse, and finally, let's make sure that when it does break down and finds its way into the environment, it isn't going to represent an even more hazardous substance. Fundamentally, those are the three points we've been debating here, but I don't know that we've integrated them.

The final point I was going to make on this, and then I'll close, concerns my observations from visiting waste management companies and from other things we've done to try to understand this issue. We're rather pitting one side against the other here. My final point was that I think doing so is a mistake. Nobody's going to win in doing so.

There have been salient and good arguments made by many people that we have to control plastics finding a way into the environment. I'm not arguing with any of those fundamental principles. The concern I have is that when we talk about how we do this, how do we make sure that not only plastics but all waste doesn't find its way into the environment? What does it mean to identify materials that can be reused? What does it mean to have waste management bring enough of it back to make it economic to reprocess and reuse effectively?

Those are the closing comments. It's a system-level problem, and I find we're looking at it in too many small pieces, rather than together. That's probably my most significant comment.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

It's rather like a win-lose right now. What you're saying is that there actually is a win-win.

In that sense of a win-win, are there other countries that are doing it like a win-win [Technical difficulty—Editor] very good for the environment and good for recycling?

[John Galt]

Absolutely, and because we're a global company, we have the opportunity to work around the world with various countries.

I'll talk about Germany and Norway, because they're the gold standard in the collection and reuse of plastics today. Both countries claim and deliver a 97% recovery and reuse rate today. That's today. As a matter of fact, Germany alone recovers and recycles three times the amount of plastic materials that Canada in its entirety uses annually. They have, then, proven solutions.

What we did was look at what the formula was for success. The formula for success included such things as minimum recycled content requirements on all containers. That creates demand.

The second thing was much more convenient and effective waste control systems.

I lived in Europe, in Luxembourg, for five years of my life, and starting 20 years ago, systems existed such that I could place the materials in an appropriate location conveniently. In Canada, in the 15 minutes between my farm and Husky, the way of collecting materials differs. That's the second element of it that was to me absolutely crucial.

The third thing is incentivizing industry by way of investment in the recycling infrastructure. That's a significant part of the German equation today.

Finally, I think the gold standard is putting value on it. What I mean by that is—and a lot of people have different opinions, including within my industry—through a deposit. If you look at a deposit system, you see that what's really powerful about it is that whether the individual returns the container for the deposit or throws it into the environment, the deposit system incentivizes somebody to collect it and recover it before it can find its way through our streams, into our lakes and out into our oceans, so [Technical difficulty—Editor] globally that we're good.

Quite frankly, there are 300 member companies in the plastics recycling association in Germany. [Technical difficulty—Editor] so it's also really good for employment and business.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

John, I want to quickly go back to employment and business.

You said you had a three-year plan to invest $190 million. I'm sure many companies across Canada have similar plans for investment that lead to employment and all kinds of economic activity.

What do you see happening if the bill goes ahead as it is, as opposed to what would happen with alternatives such as you're proposing?

[The Chair, Liberal, Francis Scarpaleggia]

You have 30 seconds, please.

[John Galt]

I can tell you right away what did happen. A company that's been recycling PET bottles for more than 10 years and producing 100% recycled containers had a plan to introduce a new recyclable food service container and put a recycling plant up for it. They were also putting a bag recycling plant up. They put both of those investments on hold.

Many other investments by companies in recycling infrastructure that would have dealt with the issue of the root cause and created value for this material have been stopped. At Husky—we have many operations worldwide—we'll simply make those investments and expand our capabilities where the markets are receptive to them, where they're looking for a recycled solution.

Then the last one—

[The Chair, Liberal, Francis Scarpaleggia]

We'll have to stop there.

We'll go to Mr. Longfield for five minutes, please.

[Lloyd Longfield, Liberal, Guelph, ON]

Yes, the clock is always against us.

Could you please finish your sentence, Mr. Galt?

[John Galt]

Another key thing, which I know a lot of people aren't thinking about, is the medical devices industry. When I mentioned the point that 73% of medical devices use plastic, and we've just gone through a pandemic, Canada is almost wholly dependent on foreign nations for the supply of critical medical devices. I have the import data here.

[Lloyd Longfield, Liberal, Guelph, ON]

Right. I can't go too much farther than that. We do have some data, and we do have that. You can submit it to us as well.

[John Galt]

Perfect.

[Lloyd Longfield, Liberal, Guelph, ON]

I have visited your plant in Luxembourg and I've visited your plant in Bolton many times, working with the plant development people on the hydraulics and control systems.

One of the areas I wanted to explore was the use of recycled plastics in your feedstock. We just finished debating Bill C-204, and it sounded like we were starting to debate it again today. The recyclers in both British Columbia and Alberta said that you're going in the wrong direction. Limiting the travel of product actually cuts this off at the knees by eliminating the supply chain opportunities.

In the case of your feedstock, are you able to specify amounts of plastic recycled material that can be used on your injection presses?

[John Galt]

We can handle up to 100%. There are three fundamental technologies for recycling plastic in use worldwide: mechanical recycling, chemical recycling and waste-to-energy. All are developed. All of them we are capable of producing. As I mentioned, one customer has been producing containers from 100% post-consumer material now for over 10 years.

[Lloyd Longfield, Liberal, Guelph, ON]

The regime in Europe is quite different. In fact, definitions are quite different when we talk about toxicity. In the EU they talk about it as hazards-based, and in Canada we talk about it as risk-based. I've also worked with one of your major competitors in Austria. There is a very strong global plastics machine manufacturing industry in Europe, where their standards are, I would argue, more stringent than ours. Could you compare where we're going with this legislation with the position of the EU?

[John Galt]

The new EU regulations, which will take effect by the end of 2024, are much more aggressive than what we have here. They've followed that framework that I talked about earlier, imposing a higher percentage of recycled content across all products and mandating tethered closures so that when the closure is removed, it doesn't separate and can come back and be recycled and reused.

They've set a framework of a three-year program to increase recycled content, they've increased certain design aspects on the packages to make sure they don't separate and find their way into the environment, and they've mandated that you can't sell a product if you're not compliant with these regulations.

[Lloyd Longfield, Liberal, Guelph, ON]

Right, so user responsibility is another key that needs to be embedded in what we're discussing.

[John Galt]

Absolutely. You have to get the brands that want to deliver the product together with the people producing and recycling it.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you.

I want to switch over to Mr. Roter. [Technical difficulty—Editor] organization has come to Guelph. In fact, [Technical difficulty—Editor] our mayor and I were talking about The Natural Step program and how that applies to the different orders of government. Again, Bill C-204 , which we were debating, is pushing some requirements on municipalities to stop shipping plastics that will end up in landfills.

Could you talk about how The Natural Step works with the three orders of government to try to coordinate with us, and maybe how you're working with the Canadian Council of Ministers of the Environment, if that's an organization that you're familiar with and working with?

[George Roter]

Yes. Thanks for the question.

With the Canada Plastics Pact, which is an initiative of The Natural Step Canada, we have a broad range of partners. Right now that includes municipalities, which need to be part of this system and the system changes. It also includes Environment and Climate Change Canada [Technical difficulty—Editor] circular economy with plastics. We have had in the past some engagement with the CCME, and I think we welcome more engagement with the provinces as we go forward.

[Lloyd Longfield, Liberal, Guelph, ON]

I think that's one of the key missing pieces for us as we're trying to put effective legislation in place.

Germany and others in the EU, cross-nationally, have good collaboration, and we all need to be working together. I think setting up an “us versus them” isn't helpful for any of us to get to where we need to get to.

[George Roter]

Yes, I think we see something very similar.

One thing that we're in the midst of right now is talking to the various corporate and commercial members of the Canada Plastics Pact, and one of the things that has come up in these conversations is how difficult it is sometimes to work all across Canada without a set of standards, without harmonization. I talked about data to know what's going on, and there really is a role for the federal government in bringing some of that together.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you very much.

Ms. Pauzé, you have the floor for two and a half minutes.

[Monique Pauzé, Bloc, Repentigny, QC]

My questions will be almost on the same topic.

I'm surprised we haven't talked about subsidies yet.

Mr. Roter, in your appearance before the committee in May 2019, you mentioned that manufacturing companies had to bear the burden of collecting recycling and that those that produce plastics receive 30 times more subsidies than recycling companies.

Do you agree that the recycling sector, which is under provincial jurisdiction, should receive the same consideration as the production sector and receive equivalent subsidies?

[The Chair, Liberal, Francis Scarpaleggia]

To whom is your question addressed?

It's to Mr. Roter.