Think Tank: Canada’s Recycling Challenges

Oct 6, 2017, 19:44 PM
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May/June 2016

Dour markets, metals theft, and numerous product stewardship programs are just a few of the challenges for Canadian recyclers, but CARI’s Tracy Shaw is helping the industry manage them all.

Tracy Shaw, president and CEO of the Canadian Association of Recycling Industries, has three priority issues for the Canadian recycling industry written on the whiteboard in her Ottawa-based office: stewardship, metals theft, and trade. Those are big issues for Shaw, her two-person staff, and the association’s 257 member companies to address, but, she asserts confidently and with a laugh, “We’re small but mighty.”

CARI has a 75-year history of helping Canadian recyclers address their big issues and promote their industry. For 20 of the past 21 years, a Shaw has served at CARI’s helm. Len Shaw, Tracy’s father, was CARI’s executive director for 19 years. Tracy joined the association in January 2011 as manager of communications, working closely with her father until his retirement in 2014. “My dad opened up the door for me to see into the policy and advocacy sides of CARI’s work,” she says. When he stepped down, Tracy says she saw the opportunity to use her diverse skills in an executive role. “I loved the idea of being able to advocate for what I see as a vastly misunderstood industry,” she explains. “I wanted to be in a position where I could help our members and the Canadian recycling industry in general on a worldwide scale.”

Shaw became CARI’s top executive in June 2015 during a challenging time for the recycling industry, and she readily admits the transition was difficult. “I really had to hit the ground running when I first took over,” she says. Hiring a new communications manager in September 2015 eased her workload, allowing her to focus on “providing services to the members and advocating for the industry,” she says. Now, after almost a year in her new role, Shaw says, “I feel that I’ve found my rhythm.” Armed with a new strategic plan for CARI—and eyeing the three priorities on her whiteboard, among others—Shaw is poised to lead the Canadian recycling industry into its next 75 years. Scrap talked with Shaw about the key issues that will define her work, the industry, and the association going forward.

How would you describe Canada’s recent economic conditions, and how are they affecting Canadian recyclers? The past year has been tough. Our economy is resource-heavy and export-driven. We have a heavy reliance on our oil reserves and our mineral and metal deposits, so the decline in oil prices has had a huge effect on the Canadian economy as a whole and on the province of Alberta in particular. That, combined with the strong U.S. dollar and China’s slower growth and lower demand for resources, has reduced Canada’s exports. We also aren’t seeing much growth in our domestic manufacturing, which is what the recycling industry needs to speed things up again. Fortunately, some recycling markets are seeing a little bit of growth now—it’s slow and unsteady, but I’m hopeful it will continue.

You mentioned the stronger U.S. dollar. How has that affected the Canadian recycling market? The majority of our trade is with the United States, and a lot of our contracts are in U.S. dollars. In general, the stronger U.S. dollar is good if you’re selling and hurts if you’re buying. For Canadian recyclers, for example, it hurts when they purchase equipment in U.S. dollars. The Canadian and U.S. currencies just aren’t compatible at the moment, but we’re hoping their relationship is going to stabilize. For us, the advantage of having a weaker U.S. dollar should be an increase in manufacturing in Canada, but that’s not guaranteed because the production costs in emerging markets are so low.

Are the Canadian scrap and scrap-consuming sectors consolidating due to the market conditions? If so, how is that trend affecting CARI? We were seeing some consolidation and vertical integration, with a few consumers buying up feeder yards. Some medium-sized recycling businesses also have merged with or bought out some competitors. More recently, some of the consumers that had vertically integrated are starting to sell off or shut down the acquired facilities. In CARI, a couple of our bigger international members have been directed by their head offices not to renew or have reduced the number of branches included under their membership. We’re also seeing some of the smaller member companies getting bought up or shutting their doors. Hopefully that trend won’t continue.

Product stewardship is a high-profile issue in Canada. Can you discuss that trend, noting which products are the main targets and how CARI is responding to such programs? The Canadian Council of Ministers of the Environment adopted an extended producer responsibility strategy for Canada in 2009. At that time, we put together a policy on EPR and product stewardship programs that supports them when they’re necessary but only under these five conditions: that the manufacturer is responsible for its product’s end-of-life management cost; producers must focus on designing products to minimize their environmental impacts; the program should be based on the private-sector competitive process; the program’s cost should not be listed separately but internalized, like other costs; and any collection system is developed with the recycling industry’s input.

Electronics are the most highly stewarded materials in Canada. All 10 provinces and one territory have stewardship programs for electronics. Two provinces in particular—British Columbia and Ontario—seem to be picking up the stewardship mantle and adopting an across-the-board approach. This trend started with packaging and paper in British Columbia and is moving on to, essentially, everything. They’re now looking toward white goods as one of their next targets. The basic goals for both of these provinces is achieving zero waste and eliminating government funding for collection programs. They want to have producer responsibility for everything in the province. Ontario, in fact, has proposed zero-waste legislation similar to the circular economy strategy in Europe. It’s the next level of stewardship.

On a related issue, Ontario is issuing standards for the handling and disposal of end-of-life vehicles. It’s not asking for producer responsibility or product stewardship in this case. Rather, it’s establishing standards for the recycling industry as to how it removes and manages the pollutants from ELVs. We are concerned that the standards as written do not account for the difference between auto wreckers and recyclers and that they don’t define where in the process an ELV becomes scrap material.

Legislators’ ignorance about our industry really hurts us when it comes to these EPR and product stewardship programs. They understand that facilities are managing some of these products, but they don’t have an overall understanding of what we do, where our place is in the cycle, and how important it is for the cycle to remain market-driven.      

How are Canadian legislators addressing the metals theft problem, and how have CARI and its members responded to combat the issue? CARI has been on the forefront of the metals theft issue for many years. We initiated a service that eventually became the system. When we’re talking with law enforcement, we point to that system as an example of how the recycling industry and the law enforcement community can work together.

In the political arena, CARI has had some success in limiting or eliminating legislation against the industry regarding metals theft. When we’re involved in the legislative consultations, our message is that recyclers are victims of these thefts as well, and we believe that protecting property is more efficient and more cost effective than repairing the damage and replacing stolen material.

Canada has no federal legislation on metals theft, so the problem is tackled at the municipal and provincial levels. British Columbia, for example, has metals theft legislation that regulates metal dealers, requiring them to submit certain data and limiting the amount of cash purchases, among other points. We were moderately effective there in eliminating tag-and-hold requirements and in reducing the amount of material that recyclers have to track—instead of all metals, it’s just the metals of primary concern, such as copper.

Nova Scotia—the first province to enact metals theft legislation—is a better success story. The legislators there actually repealed the law because they thought it did not help reduce scrap thefts and was a burden on recyclers. That was a great win for our industry. More recently, in Alberta, CARI and specifically our vice chair, Dan Klufas of Federal Metals [Calgary, Alberta], worked with law enforcement and other stakeholders to minimize the impact on recyclers and make  the proposed regulations there more effective. We expect the legislators to remove scrap metal dealers entirely from the bill and focus on protecting critical infrastructure. That victory was a tough slog, one we worked on for several years. It showed us that our dialogues with the communications companies and other parties that are driving these laws seem to have made a difference.

The Canadian government has proposed changes to the country’s rail transportation sector, such as potentially requiring shippers of “hazardous materials” to pay additional insurance into a reserve fund to cover catastrophic accidents. How could the proposed changes affect Canadian recyclers? CARI addresses these and other transportation issues as a member of the Coalition of Rail Shippers, a group of industry associations whose members make up about three-quarters of the rail freight customer base in Canada. Generally the “hazardous materials” proposal wouldn’t apply to scrap shipments, so it shouldn’t affect recyclers greatly. It might affect slags and ashes, but scrap is not considered a hazardous material. There are always concerns about railway service, so we’re hoping that the review of the federal Canada Transportation Act results in increased railway capacity to meet demand and makes rail transportation more user-focused so our members aren’t fighting to get railcars and rail service. 

As a Basel Convention member country, Canada can’t export items declared hazardous materials to countries that are outside the OECD without certain approvals from the sending and receiving countries. Has this been a barrier to trade in any scrap commodities? Luckily for us, the United States—which is not a Basel member—is Canada’s largest trading partner, so the bottom line is that the Basel Convention hasn’t been a terrible barrier for us. With the exception of our shipments to China, our exports outside the OECD are pretty limited. The convention requires Canadian shippers to obtain a prior informed consent before exporting to non-OECD countries. Notably, Canada has not yet ratified the ban amendment to the Basel Convention, which prohibits the export of hazardous waste to developing countries for any reason, including recycling.

The CARI board adopted a new strategic plan for the association in 2015. What are the key points of that plan? We focused the plan on three key areas: strengthening CARI’s advocacy muscle, enhancing the value of association membership, and raising positive awareness of the recycling industry. Based on the current economic and political climate, we’ve sharpened those priority areas a bit more. In the advocacy area, for instance, we’re focusing first on issues affecting the industry and CARI members directly and second on promoting the association and the industry as a whole. In the membership area, we’re focusing first on providing benefits to our existing members and second on growing the membership base within the metal sector. And on the awareness front, we’re planning to work with other industry associations to develop a consistent and positive message for the industry.

How is CARI expanding its advocacy presence at the local, provincial, federal, and international levels? We do what we can with our small staff, but we’re also reaching out to members to help them promote the industry and battle some of the issues themselves. Sometimes the national association must be involved, but other times it’s better for the recyclers to be involved, speaking up about how many people they employ in a given district and why they’re important to the local economy. We provide support when necessary, and we’re developing tools—such as talking points and information on the industry—that members can use to advocate for themselves while maintaining a consistent message as well.

What is your biggest concern going forward for Canadian recyclers? For CARI? The biggest concern for recyclers is—and always will be—the current state of the market and the condition of the Canadian and global economies. Speaking for CARI, my biggest concern is the ignorance about our industry—among legislators, regulators, and the public—and getting a clear, consistent message for our industry nationally and internationally. A lot of the unfavorable legislation we face—and even the bad PR we get about whether recycling is necessary at all—comes down to misinformation or ignorance of our industry’s economic and environmental benefits and how important it is on a global scale.

Dour markets, metals theft, and numerous product stewardship programs are just a few of the challenges for Canadian recyclers, but CARI’s Tracy Shaw is helping the industry manage them all.
  • 2016
  • May_Jun

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