Good afternoon, Madam Chair. I'm proud to speak to the committee today about Dow Canada.
Our main product in Alberta, polyethylene, is sold to customers across Canada and worldwide to make durable industrial goods as well as packaging and consumer products. We also supply industry in the region with other petrochemical derivatives. Dow announced a multi-billion dollar expansion and decarbonization of our Fort Saskatchewan facility, and I am pleased to discuss that during the question and answer session. In Ontario we have two manufacturing facilities—one in Scarborough and one in Sarnia. These facilities produce emulsions and specialty plastic resins, respectively.
This committee is undertaking a massive project, and it's very important work. I provided the committee with information about the work that Dow has done around the world to recover plastic waste and return it to the economy and, as you can see from our materials, I can personally attest to how London, Ontario, plastic was transformed into my lawn furniture. I am happy to talk to the committee about other advents in that technology, including our low-carbon and bio-based Crocs, which are a very comfortable potential market for recovered plastic.
The enormity of the challenges are so broad that it's difficult to distill into a five-minute presentation, so we will focus on three recommendations for the committee to consider as it contemplates this very important work.
First, we need to create demand for this recycled content. In April, Dow CEO Jim Fitterling publicly stated that our company is in favour of a recycled content mandate for plastic packaging. The right way to do this is to ensure that it is both ambitious and achievable over time. Recycled content mandates send clear economic signals that incentivize investments and circularity. In creating mandates, however, we recommend that policy-makers think about the unintended consequences of regulatory decisions. We need policy signals that recognize that plastic recovery allows us to displace virgin resources and reuse materials that have already been extracted. This is a mechanism to reduce our scope 3 GHGs.
Our second recommendation is for the creation of an accelerated capital cost allowance tax credit that would allow for the rapid depreciation of any investments made by the private sector to collect, treat and transform plastic waste and return it to the economy. I provided the committee with a chart that details the “materials ecosystem” for plastic production—a road map through which science and economics break down the unwanted materials and reconstitute them into the basic building blocks for plastic production and then reassemble them into something useful once again. It details each point in the process where infrastructure can be improved to recapture plastic waste. The stages—and it truly is a circle—start with the final product, then include the application itself—collecting, sorting, cleaning, mechanical separation, biowaste designs for circularity—and then return the resin to the manufacturing process to the “final product”.
A key challenge for growing the circular economy is that, often, recycled materials are much more expensive than those made from virgin resin. A tax credit that can shrink the delta between the price of virgin resin and the costs associated with the recovery and transformation of post-consumer resin would be welcome. I provided the clerk with a copy of our pre-budget submission that focuses on the need for this tax credit. Ultimately, the committee and the government need to recognize that governments themselves are spending money in dealing with this waste, so any investment that private industry makes will ultimately reduce the capital that the municipalities spend on that waste management.
Our third recommendation is to be as open-minded as possible when looking at the possible markets for these post-consumer plastics. The various permutations of the concept of mass balancing gives many in industry heartache. We should not be looking to limit the markets that these recovered materials could be entering, but instead supporting policies that help drive investment in technologies that can recycle more material to a higher quality, and these include chemicals recycling.
We should not place artificial barriers in any resulting policy. We urge this committee to recommend to the Government of Canada that recycled content mandates remain technology-neutral, and to ensure that the focus of any recycled content mandate is to maintain the value of these resources and prevent fugitive plastic waste from entering the environment. By returning waste plastic into the economy, we are solving two environmental problems at the exact same time.
I welcome any questions that the committee members may have.