Auto Service World
Feature   June 1, 2008   by J. D. Ney, Assistant Editor, with files from Tom Venetis, Editor

Treading Carefully Over Tire Recycling Plans

Ontario Is Looking Into a Tire Stewardship Program. Are There Lessons To Be Learned From Other Provincial Programs?


“Ontarians throw away some 12 million used tires a year, and unlike other provinces with government recycling programs, too many are left in dangerous stockpiles, buried in landfills or shipped out of province to be burned as fuel.” Such was the introduction for a March 28th 2008 article in the Toronto Star that sent some serious shock waves through the Ontario tire business.

Written by Kerry Gillespie, the publication’s Ontario Legislative correspondent, the article goes on to suggest Environment Minister John Gerretsen is examining the feasibility of a provincially legislated tire recovery program. Many in the province consider this to be the re-opening of Pandora’s Box, one that has remained sealed since the last ill-fatted effort in 2004. According to the article, Gerretsen was quoted as saying, “It’s unacceptable that Ontario is the only jurisdiction in Canada that doesn’t have a tire recycling program right now and that’s why we want to get one going as quickly as possible.”

It should be noted that although the minister put the ASAP-tag on his time-line, there are some very specific steps that must be undertaken before any legislation is even drafted. One such step is sending something like a letter of intent to Waste Diversion Ontario who will then begin the process of putting together the legislative details. According to a source close to the minister, no such letter has been drafted and it would be “premature to discuss the matter, as a number of things have to happen first.” This lack of notification was also confirmed by representatives of WDO say they are aware of the minister’s public remarks, but are as of now, “on hold and waiting.”

Does Ontario have a ‘crisis’ with mounds of used tires?

But while we are all on hold and waiting, it is a good idea to take a closer look at the issue of tire recycling. While Gillespie in the article seems quite convinced that Ontario is rife with dangerous mounds of tires, there are many in the industry that say this is simply not the case.

According to Gillespie, the problem of used tires is a dire, albeit vague one, (suggestions that “Many” are left in stockpiles seems to impart some lack of credible research.) However, the problem, according to key players in the Ontario tire industry is at most a minor one. What’s more, despite Gerretsen’s insistence that Ontario needs to adopt a governmental program, there are those in the business of recycling tires that say that’s the last thing we need, mostly due to the sheer size of the province’s used tire market.

“There are programs right across the country,” says Glenn Warnica, president of the Ontario Tire Dealer’s Association. “However, Ontario is an anomaly. There are 12 million end-of-life products through the tire chain in Ontario. All the other provinces pale in size. So the complexity of the issue is greater than in other provinces.”

Warnica also went on to mention that in fact, the government has set aside $200,000 in a recent budget for a study on scrap tire piles in the province. While the results are not yet ready for release, Warnica says the findings of this study will show that the piles are much fewer and smaller than many suppose.

By way of example, the problem of tire stockpiles is best explained by Peter Hutley, with the Ontario Tire Collectors Association.

“Most stockpiles today are legacy stockpiles that have been around since Hagersville,” he says, with only one of those being of any significant size. It is this matter of relative size that many in the province are likely to find confusing. When one hears that there is a stockpile of 10,000 tires sitting someplace, the initial reaction is to think of that as massive, which is simply not the case according to Hutley. “In Ontario, our company alone handles and moves 20,000 tires a day, so a pile of 10,000 or so, really is nothing,” he says.

The major problem in the tire recycling business, according to Hutley, however, is not one particularly addressed by the most recent examples of governmental tire recovery programs.

“We’re very serious about tire recycling, but we almost stand alone with the idea that we don’t feel there is a problem,” he says. “There are companies that want that recovery business, so the free market is dealing with them. The problem is that in an open market, you can take those tires wherever you want, and it is perfectly legal to take them to a landfill. In fact, that is the cheapest and easiest place to go. But that is something we are dead against.”

Instead, Hutley says his company relies on three other methods in disposing of used tires.

The first and preferred method is straight reuse, and somewhere in the neighborhood of 10 per cent of Ontario’s tires are eligible for reuse, and are usually shipped to Mexico or the Caribbean. As such, people in the industry call these “island tires.” Secondly, Hutley says the majority of his tires go to a plant in Cambridge Ontario, which produces crumb rubber that is then used as field turf, auto parts, fatigue mats and other value added products. Third, Hutley sends about 9,000 tires a week to the blasting mat industry, where tires are cut and re-sewn into protective mats for the heavy con- struction industry. That said, Hutley did acknowledge the need to route some tires through the fuel energy route, as well as sending some used tires out of province for their proper disposal. However, he insists that it is for good reason.

“The tire drive energy market used in cement kilns for example, is used as a safety valve for us,” he says. “During some parts of the year, such as the fall, we simply get way too many tires for the blasting mat or the crumb rubber plants to handle, and so the excess goes to the tire dive energy sector. We could send all of our tires there, but we chose to use it as a last resort.”

As for shipping tires out of province, Hutley says it is simply a question of capacity. Seeing as his company collects up to 20,000 tires a day, he says they certainly don’t want to hold those tires for any period of time if they can avoid it, so some end up being processed in Quebec facilities because Hutley says that province is way ahead of the curve in terms of tire recycling capacity.

“Quebec is a net importer of used tires, and I’m proud of them and what they have been able to accomplish,” he says. “They are the furthest ahead in terms of capacity for recycling, and can handle the recycling of about 10-12 million a year.”

Seeing as Quebec as a province doesn’t produce nearly that many used tires in a year, Hutley sees it as being a pretty clear choice to send some of Ontario’s excess waste there for reuse, rather than dumping them into Ontario kilns or landfills.

Where the government has stepped in

It almost goes without saying that where matters of business are concerned, most industries will always try and keep government out of their affairs, preferring instead to create their own privately-driven solutions to perceived problems. Suffice to say that tire recyclers are no different. In fact, when Ontario last looked into the option of a provincially administered program, the industry response was quick and harsh. This time around appears to be no different.

“As I see it on the announcement (the one made by the Ont. Environment Minister) is the rekindling of the Ontario Tire Stewardship Plan,” says Warnica. “As the OTDA, we have always been supporters of a managed scrapped tire program for the province of Ontario. However, we do not support the program that was presented in 2005 which was generated by OTS and put forward. Very obviously we are strong supporters and have been involved in the process of attempting to develop a program that is good to the consumer and the environment.”

The result of those program development efforts on behalf of industry shareholders was OnTread.

“OnTread is designed to be Ontario Tire Recycling and Economic Development Plan,”
says Warnica. “Our focus was different. First, we are not supporters of taxation or additional taxes and therefore our focus was more on an EPR perspective, meaning Extended Producer Responsibility, the funding of the program through the producers and the incentivizing of the consumer to use products that are created with recycled products, and as a result of those incentives drive the demand and create new higher-use products and move the end of first life tires through to better uses.”

Speaking in terms of the 2005 plan, Hutley is critical of what he sees as an unsustainable administration and cost structure.

“We felt as though the collection model would not work,” he says. “They wanted to pay 90 cents a tire, and also have one flat rate for the north. So if we couldn’t make the dollars work for pick-ups in Kenora, then those tires simply would not get picked-up. Right now it works, and all the tires in Kenora get recycled, but the bottom line is people have to be willing to pay for tire disposal.”

In fact, many retailers like Wal-Mart are already charging a tire disposal fee, which according to association members, is already proof enough that in Ontario anyway, the industry is policing itself. Speaking about the 2005 plan, Warnica echoes this sentiment. “The budget that was struck for the OTS plan was significant and a great deal of the funding in that formula went to things that were already cov- ered by free enterprise and the free market,” he says. “The relationship between the collector and the retailer requires no change, other than registration of collectors and haulers.

Hutley also sees the need for change in terms of hauler and collector legislation. “Currently there is no license required for haulers,” he says. “You can preach diversion, but a plan in terms of tracking or a manifesto system is required, because as of now, there is no paper trail to say where specific tires go, and that needs to happen first, to make sure no tires are getting to landfills.”

However, despite all the OTDA support, even Warnica does acknowledge that the OnTread plan was not warmly received, only adding to the confusion surrounding the whole issue. “To be honest, we have not had direct communications with actual manufactures,” he says. “The communications has been with the board of the OTS, and we do sit on the board, but with have a minority position on that board, and we have brought our views forward. But our views have not been well received. At this point, out goal is to facilitate communications between all the players: the environmentalists, collectors, producers of second-life products.”

Despite having no shortage of speculation and opposing program plans, in the end, Ontario is officially no closer to having a fully realized provincial plan than they were in 2005.

However, if Minister Gerresten truly believes that it is absolutely unacceptable that Ontario continues to operate without a provincially designed and administered plan, it is likely that some of the other provinces may provide inspiration for that plan.

Across the country

Regardless of argument on both sides of the legislative fence, it would appear as though Canada’s largest tire market is at the very least going to be heading into some governmental debate on the matter. Since governments rarely make decisions based on new or innovative ideas, Ontario tire dealers and installers can get a pretty good idea of what an Ontario government run tire recycling program might look like, by examining existing programs in other provinces.

While it is true that the raw numbers of tires in Ontario takes it to a league all of its own, examining the procedures in other parts of the country should still provide some valuable insight.

Manitoba

Tire Stewardship Manitoba (TSM) started their Program in 1995 as a program that was regulated by the Manitoba provincial government, as well as a board of directors, who established a tire levy of $2.80 on passenger, light-truck and commercial truck tires. Prior to that, there was a $3.00 Tire Tax. However, there has been a recent and significant change to the system.

“The government decided to turn the program over to industry much like our oil program in Manitoba, which is an industry-run program,” says Brett Eckstein, executive director. “After April 1, 2008 Tire Stewardship Manitoba took over the recycling.”

TSM is a non-profit agency and spearheaded and supported by the Rubber Association of Canada, Retail Council of Canada, Western Canada Tire Dealers and Manitoba Motors Dealer Association.

“A similar approach was used in other provinces, with some differences, but the cores of the programs are very similar,” says Eckstein. “Just like the oil regulations say that in order to sell oil you must manage your oil, [or be part of a program that manages the oil] the regulation here says that in order to sell a tire in Manitoba you must belong to a program or have a program to manage your tires at the end of their lives.”

In Manitoba, for example, if Bridgestone sells tires it manufactures through its branded operations or tire dealers they must be part of the TSM.

“The way the regulation is structured, because we do not manufacture (tires) in Manitoba we say that it applies if you are the first seller,” says Eckstein.

On another note, the good news here for those like Warnica and Hutley, is that whereas under the now defunct provincially run system the rates were legislated, Eckstein says the rates are now determined by industry players.

“The structure of how the program operates and how we finance the system, is left up to the industry,” he says. “April 1st, we put in a new fee structure that allows (the TSM) to be a lot more sustainable, effective and efficient. And that is a significant change, the ability of TSM through the fees that are charged on a broader range of tires more accurately reflects the province wide collection and processing costs. The program (TSB) was not able to sustain itself. The fees now reflect the true cost of recycling.”

New Brunswick

Started in 1996, the New Brunswick program is fundamentally a return to retailer system, which uses the various retailers in the province as a depot for the collection of used tires. Fees are paid on new tires and not collected when the tires reach end of life. With slightly more than 630,000 new car tires and 70,000 truck tires sold and installed in the each year, the New Brunswick system can obviously cope with the demands. However, in terms of such a retailer driven plan working in Ontario, there are serious doubts as to whether or not such a system could work in a market which processes more than 10 times the amount of tires.

“We are in fairly close contact with our various stakeholders to address their issues,” says Jamie Seamans, general manager of Tire Stewardship New Brunswick

“We have recycled thus far some 11 million tires in the province, since 1996. There are about 900,000 to 1 million tires sold (annually) and the recovery rate is up to 90 per cent plus, when they reached their end of use. That does not mean there aren’t some huge piles out there, but if there are, we address those as quickly as possible,” she says.

“We have a contracted collections and processing company and in our case the same company does both, handling the logistics, making sure there are enough drivers to manage all the routes, and they also have the responsibility to developing markets for the rubber material. Our goal for the program is that as much of the material goes to value-added product.”

British Columbia

The current system in British Colombia was started in 2007 and grew out of a government-run program begun in 1991.

According the Mike Hennessy, director of Tire Stewardship program British Columbia, the provincial government has moved their thinking quite radically in the last few years to reach across a range of products in terms of forcing industry to be responsible for end-of-life man
agement of products, such as batteries, electronics, oil and now tires.

“There is a (provincial) regulation called the Recycling Regulation, which covers all the products under the regulation,” says Hennessy. “And when scrap tires fell under the regulation that is when TSBC (Tire Stewardship British Columbia) came into the picture.”

One big change, according to Hennessy, is the manner in which the proceeds from a tire fee or disposal charge is handled. Such a change would be important to Ontario collectors and industry insiders, who are said to be concerned about the allocation of funds under a tire tax scheme.

“What we (at the TSBC) do is collect the money where before the monies were collected on the back of the provincial sales tax,” says Hennessey. “At some point, the Minister of Finance did a calculation of what they thought was collected in Eco Fees and passed that amount to the Ministry of the Environment. So let’s say $10 million was collected, but only $7-$8 million was really needed for that year to fund the tire recycling program, that other $2-$3 million went to other environmental programs. That was the old way.

“With this new way, if you raise $10 million it is all yours and gives us much more flexibility to cover shortages from one year or to have a surplus and use the money for new programs, and allows (the TSBC) to operate much more like a normal business.”

So what’s to be expected?

After all of that, in the end it would appear as though Ontarians can expect quite a bit of political maneuvering in the short-term over any proposed tire disposal plan. Looking at the experience of other provinces, the pattern seems to be: government take-over of the process; government running an unsustainable program; government returning at least partial control to the industry, while retaining some oversight. Armed with that knowledge, one assumption could be that the Ontario government could work out some kind of industry/government hybrid system much like those discussed above, right from the get-go, and avoid having to revisit the issue in a matter of years.

However, as both Warnica and Hutley aptly point out, Ontario’s sheer number of used tires makes interprovincial comparisons extremely difficult. Given that fact, it would seem as though the most definitive statement on the current state of an Ontario tire stewardship program came from the WDO representative, who as you’ll recall, told us: “We’re on hold and waiting.”

What do you think? Have your say and speak your mind! letterstotheeditor@ssgm.com


Print this page

Related


Have your say:

Your email address will not be published. Required fields are marked *

*