Environment Committee on April 26th, 2021

[The Chair, Liberal, Francis Scarpaleggia]

Welcome, members and witnesses, to meeting number 27 of the House of Commons Standing Committee on Environment and Sustainable Development.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Monday, November 2, the committee is meeting on its study of single-use plastics.

For the benefit of the witnesses—because the members are quite familiar with this—the witnesses will have five minutes to present. When they're not speaking, they should put themselves on mute. After the presentations, we'll have multiple rounds of questions. If you could direct your comments and answers through the chair, that would be appreciated.

Today, from the City of Montréal, we have Maja Vodanovic, mayor of the borough of Lachine, but also a member, I believe, of the advisory committee of the zero plastics group. From Merlin Plastics, we have Tony Moucachen, president and chief executive officer. From the Retail Council of Canada, we have Mr. Philippe Cantin, senior director, sustainability innovation and circular economy.

I'll just go by the order here. We'll start with Ms. Vodanovic for five minutes, please.

[Maja Vodanovic, Mayor of the Borough of Lachine, City of Montréal]

Hello, everyone.

First of all, thank you for inviting me today. I'm honoured to be here. Actually, I'm thrilled to be able to talk about plastics. I'm a borough mayor, but I'm completely fascinated by the whole Canadian plastics industry.

I represent the greater Montreal area at National Zero Waste Council, where I co-chaired the plastics advisory panel with Andrew Marr, who is part of Metro Vancouver.

We created about 12 recommendations for different plastic wastes across Canada, which we identified as the most problematic ones. We created this document because we need to work better together. The federal, provincial and municipal governments need to collaborate. We need to create new federal, provincial and municipal legislation and bylaws that will allow us to implement these needed solutions.

This is why I'm so thrilled that you can hear me today, because we definitely need the federal government involved in order to solve these issues.

[The Chair, Liberal, Francis Scarpaleggia]

Excuse me, Ms. Vodanovic. Could you just hold the mike up a little closer to you?

[Maja Vodanovic]

Okay. I'm sorry.

We need to impose recycled content in packaging on the Canadian market. We need a packaging standard, and we need to define corresponding eco-fees. We need to ban certain products and expand deposit systems, and we must implement extended producer responsibility nationwide in a coherent and harmonized fashion.

In order to create a viable market for recycled content, for recycled plastics, the federal government must impose mandatory and incrementally increased recycled content in plastics on the Canadian market. This legislation must rapidly be put in place in order for Canada to reach its target of 50% recycled content by 2030. The European Union and California have already voted for these recycled content laws, and Montreal just joined the Canada Plastics Pact, which aims to impose 30% recycled content in Canadian packaging. It is the most important legislation that must be put in place as fast as possible. It alone can kick-start a circular economy in the plastic industry.

Why do we need to impose recycled content? It's because virgin plastics are inexpensive, thanks to oil and very cheap shale gas in Canada. Billons of dollars of investments from our governments, both federal and provincial, into the virgin plastic industry contribute to keeping those prices very low, and this makes it difficult, if not impossible, for recycled plastic, which gets 1,000 times less money, to be anywhere as competitive.

Of the various plastic objects we see around us, as I'm sure you already know, only 9% are recycled, and they're mostly downcycled, which means recycled into lower-quality resins. We need courageous legislation and equivalent funding from the federal government to bring post-consumer plastics back into the loop.

How do we bring them back into the loop? We need to influence the market, because in a market economy it is consumer decision that influences the industry, and the experience in other countries demonstrates that adding visible eco-fees on problematic, non-recyclable and single-use items is the most effective means of reducing those wastes.

I'm proud to say that our Canadian packaging industry, PAC, is currently working to define a national standard to rate packaging based on its recycled content and environmental impact, and I'm working with them on that. This standard will allow our government to set appropriate eco-fees that will encourage good packaging.

I would like you now to imagine if you could see an eco-fee on the label of a product. Let's take a water bottle, for example, and on its label, you see that 10 cents is added for an eco-fee because it is made exclusively from virgin plastic and it is for, let's say, type 5 plastic, which is very difficult to recycle in our country. Next to it, you see a product that has zero cents in eco-fees and is made with 30% recycled content and type 1 or 2 plastic, which is recycled in your community. Then you could ask yourself, do I pay 10 cents for this non-recyclable product, or do I not pay a fee because it is a good product? That would curb the market.

Producers already pay a recycling fee across Canada on all products, but that fee is not visible. It is combined in the total product cost and it does not reflect the true recyclability of the product—not enough, anyway, to make a real difference for the market. Labelling would enable the consumer to make an informed choice and shape the market in the needed direction. Knowing as a consumer that you are buying a certified good package is the best way for efficient EPR.

EPR makes producers responsible for their product to the very end of life, and producers are very important municipal partners, because when they become responsible for financing, managing and operating a full recycling system, they can contribute positively to the community, the environment and our economy. When the producers become financially responsible for the end of life of their product, they gain the incentive to design and operate systems most efficiently.

A few years ago, B.C. implemented a comprehensive EPR, the extended producer responsibility program. Now it has the highest recycling rates in Canada.

[The Chair, Liberal, Francis Scarpaleggia]

I think we're a bit past the five-minute mark.

[Maja Vodanovic]

I'm sorry.

[The Chair, Liberal, Francis Scarpaleggia]

It's all right; it's not the first time. Witnesses do this regularly, so don't feel bad.

[Maja Vodanovic]

Okay.

[The Chair, Liberal, Francis Scarpaleggia]

There will be time to get information in when you answer questions.

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

[Tony Moucachen, President and Chief Executive Officer, Merlin Plastics]

Thank you for inviting me to the committee.

The current federal approach is focused on introducing bans on some plastics. As a recycler, I know this approach fails to recognize the value of post-consumer plastics to industry and society.

Bans on plastic products suggest that the material is problematic, when in fact it is the absence of appropriate waste management systems that is the issue. Many plastics can already be recycled, but, as a society, we have not invested sufficiently in the system, infrastructure and technology required to maximize recycling opportunities.

Some plastics are considered harder to recycle than others, but there are solutions available or in pilot phase that can address our requirements. Canada needs to focus on supporting economic development opportunities to augment the technologies for mechanical recycling and create the space for chemical recycling technology to flourish.

The current federal government approach will not address the crux of the issue: namely, how we will deal with the end of life of packaging. Instead of introducing a ban, I would rather see the introduction of a disruptive fee levied against packaging that does not comply with required recyclability standards, such as design for recyclability guidelines. As a business person and innovator who built the largest plastics recycling company in Canada, I know we can do better if industry and governments co-operate and focus on solutions.

Rather than introducing bans—or what I could call a stick approach—I would urge the government to instead use a carrot approach and incentivize brand owners to design their packages for recyclability and incentivize them to use post-consumer resin in their packaging. We need to make brand owners accountable for the end-of-life design of their package through eco-fees, which Maja has clearly described and I greatly support.

I would also urge the government to encourage the development of further recycling infrastructure and investment in the building of such infrastructure.

The above would result in, one, improved product design for recyclability, which is the key element for future development; two, technological innovation in mechanical and chemical recycling; three, greater capacity to recycle; and four, more end markets for recycled content in the product.

This approach has three further benefits. It meets environmental sustainability goals, since plastics are often a more sustainable choice compared to alternative materials. It will demonstrate efficient use and reuse of extracted resources. It will catapult Canada into global leadership on this important issue.

Plastics have demonstrated, in many cases, their benefit. We see it through COVID-19 in having masks to prevent infecting other people. We see it in our clothes. We see it in our fridge in packaging milk, etc. There is good use for it, and it's not in any way, shape or form toxic; it actually helps us in our society, but we need good policy to make it circular, as Maja has described and I have mentioned.

That's all I have to say.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you very much, Mr. Moucachen.

Mr. Cantin, you have the floor for five minutes.

[Philippe Cantin, Senior Director, Sustainability Innovation and Circular Economy, Retail Council of Canada]

Thank you, Mr. Chair, for the opportunity to participate in the committee's work today.

Retail is Canada’s largest private sector employer, with over 2.1 million Canadians working in our industry, and annually it generates over $76 billion in wages and employee benefits. The Retail Council of Canada is a non-profit, industry-funded association that represents more than 45,000 storefronts in all retail formats in every community across Canada, and we represent roughly 95% of the grocery market as well.

Overall, we support a national approach to banning certain single-use plastic items, as this will better mirror current supply chains and reduce complexity and red tape for businesses, which is very onerous at the moment, given the current patchwork of municipal and provincial by-laws.

Municipal bans create certain challenges [Technical difficulties] and fairness, when we think of e-commerce and online applications for meal delivery. The federal ban would allow clarity while ensuring more effective enforcement.

More clarity is still needed in definitions and in whether the government intends to expand the scope of the ban. Given the pandemic, it's important for businesses to have as much certainty as possible. Sufficient implementation time must be provided for businesses to deplete stockpiles and prevent materials from going to waste. It will also allow them to start sourcing suitable alternatives. This is particularly important to ensure larger companies do not have an unfair advantage over small and mid-size players on access to alternatives.

Furthermore, the government must more clearly support the development of infrastructure to manage recyclable plastics, bring up recycling rates and increase usage of recycled content in new packaging, as the two speakers who came before me mentioned.

Depending on the category of single-use plastics, the government should provide at least a one-year notice to allow businesses to adjust to the new requirements. For all items, there need to be very clear definitions of inclusions and exclusions by material and function.

Exemptions also need to be clearly defined, with considerations for accessibility, health, food safety, and security. We need to ensure that materials are available and have been assessed to ensure that their impact on the environment is lower than the materials that they'll be replacing. Language around a “viable alternative” needs to be clarified, as there are numerous considerations around what makes something viable and whether an item can be sourced at scale. Restrictions or bans should occur at all three levels throughout the supply chain: manufacturing, import and sale. This type of approach will help promote consistency when it comes to promoting alternatives.

Although we generally support the proposed ban, the RCC does not believe that the CEPA's schedule 1 is the right policy tool to manage plastics. The CEPA's schedule 1 is used to ban specific chemical substances and list them as toxic, not to designate a broad material category such as “plastic manufactured items”. The broad wording could cause significant consumer confusion, and communication cannot be left open for interpretation when we talk about substances or items becoming toxic.

The proposed use of the CEPA's schedule 1 also, unfortunately, politicizes a chemicals management tool that is widely recognized as credible and well reasoned around the world, by both states and industry alike. A different policy tool, such as a pollution prevention plan, could be used in lieu of the CEPA's schedule 1.

When we think of a ban on single-use items and the need for clear definitions, checkout bags are often the first example that comes to mind. In defining checkout bags, it's important to specify that they refer to bags used to carry items out of a store or restaurant. Bags used in grocery stores for fruits and vegetables, meat or bulk items, for example, should not be included in the definition, as they must often be used for food safety reasons.

Many people also rely on straws for accessibility reasons, so there should be exemptions in the proposal to recognize the situation. Language also needs to be clear around whether packages of products such as straws or stir sticks, or products sold with a straw will be captured. The latter should not be, as that would have major supply chain impacts and product design impacts.

[The Chair, Liberal, Francis Scarpaleggia]

Your time is up, Mr. Cantin.

[Philippe Cantin]

Thank you for your attention.

[The Chair, Liberal, Francis Scarpaleggia]

We will now go to questions.

Mr. Albas, you have the floor for six minutes.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Thank you, Mr. Chair.

I am really excited to have such a wonderful B.C. company like Merlin here today, so this question is obviously for the gentleman from Merlin.

Certainly you recycle plastic goods to create new products, something that I think all here are happy to see. However, under the government's plan to declare all plastics as toxic and to regulate them under CEPA, your recycled goods that use recycled plastics would be considered toxic.

Do you think that is the right way to encourage a better circular economy?

[Tony Moucachen]

I definitely have difficulty, because I don't believe they are toxic. I do want a circular economy, but I also want to give the consumer, as my colleague said, the right information. I don't want to call it “toxic” just because I want to use it as recycling.

The end doesn't justify the means.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Well, the Liberals will say, oh, no, we are removing the “toxic” name from the schedule. However, as I said at this committee last week, the entire structure of CEPA is to regulate based on substances being toxic, and the word is used many times in the act. Therefore, I don't think changing one list will solve that.

Do you think using a law with criminal penalties, like CEPA, is better than working with industry and provinces to develop better recycling systems?

[Tony Moucachen]

I believe you should work with industry and co-operate with them, but I also believe in a stick-and-carrot policy. Those are the two fundamental things that we learn in Business 101. If there is no incentive like eco-fees....

As Maja mentioned, it could be an incentive. It doesn't have to be a stick, but there should be an implication and incentive to make sure that brand owners are moving towards recyclable products and designing their products to be in line with current recycling infrastructure. They should have an incentive to do so. With the lack of an incentive, they won't address it. We all have multiple problems running a business, and what are we going to look after? We're going to look after the ones that are immediate, the ones we need to deal with.

I believe we need a carrot-and-stick approach. Eco-fees are definitely one that is usable. Europe has used it. California has used it, where they give incentive for people who use post-consumer content or use their fees in collecting their package.

Voluntary things can work only for so long. If you want something that's going to work, it has to be regulated in some way, shape or form.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Let's go back to incentives and other things that can be done at the provincial level, because we've heard at this committee that B.C. has much higher recycling rates. I do think that what the supply chains—you and your company and others like it—have done is a big part of that.

To just finish the thought when it comes to CEPA, would the bans and the “toxic” designation under CEPA hurt your business and the businesses you supply with recycled materials?

[Tony Moucachen]

Yes, I believe it could hurt the business. It could give the wrong message to the consumer that this product is hazardous, when we know in fact that it saves lives. When you look at masks for COVID-19, it does save lives. We see it in hospitals. To me, saying that plastics are hurting the environment or are toxic is the wrong message.

When I started the business 30 years ago, the big thing about the environment was clear-cutting. People were coming into British Columbia and taking the trees and turning them into paper. Plastics were an alternative, to stop cutting trees and deforestation.

To me, it's very important to have a circular economy. The question is how we do it. I don't believe the end justifies the means. I believe, philosophically, that this is not the right approach.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

On the right approach, what we've heard from other producers—or what we've heard from producers, period—is that this will chase away investment. They've said that already lots of investment has gone to the United States, and people are not willing to invest in Canada even though we make some virgin resin that is among the best in the world.

If there is less investment in your industry, would that make it harder for people like you to be able to grow a proper circular economy?

[Tony Moucachen]

I believe so. I believe it's like swimming in the ocean. If the tide is high, everybody's going to benefit. If the tide is low, everybody's going to suffer.

We complement each other, virgin resin and recycling content. It's a mosaic. The answer is hybrid. It's not one or the other; it's a combination. That's the way I see it.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

In British Columbia, we've had producer responsibility legislation in place for quite a while. Is that what you're talking about, working with industry to say what fees will be charged and to whom and that they will be rebated? This creates the infrastructure and the certainty for people like you to be able to take in more and to create that circular economy that many other provinces are talking about and becoming very alive to.

[Tony Moucachen]

This is definitely a good approach. Accountability is a good approach. When you want to get serious about anything you do, you start measuring it.