Hidden consumer fees created to finance new bottle refund program
Province is forbidding retailers from showing new bottle charges on customer receipts
A new bottle return system developed by beverage companies, and adopted by the New Brunswick government, will pay consumers an estimated $18 million more in enhanced refunds on returned empties this year. But that will be financed, in part, by $11 million in hidden fees likely to be imposed on those same consumers
In addition, another $12 million per year the province has been using for community environmental projects is being diverted into the industry-run program.
New Brunswick Environment Minister Gary Crossman has called the new bottle return system a "good-news story" but he acknowledges the new fees imposed on consumers will erode some of the benefit of larger refunds.
He also says his department has not figured out how it will resupply $12-million per year in funding to New Brunswick's environmental trust fund, now that the bottle deposit money that used to feed it has been fully redirected to the company managing bottle returns.
"No fees from the beverage containers program will be remitted to the environmental trust fund under the new model for managing empty beverage containers," Crossman said during a legislature committee hearing that looked at the changes in November.
"The accumulated surplus of the environmental trust fund will be sufficient to continue investing in priority projects at the current level, as other revenue streams are evaluated."
Since 1992, New Brunswick consumers have been required to pay 10-cent deposits — 20 in the case of wine and liquor bottles — when buying packaged beverages, to encourage recycling.
Those deposits were eligible for a 50-per-cent refund when the container was returned to a recycling depot, with the other 50 per cent split equally between paying program expenses and financing the province's environmental trust fund.
But, beginning last week, the refund increased to 100 per cent of the deposit paid.
That change was orchestrated by Encorp Atlantic, a not-for-profit organization created by the beverage industry that manages bottle returns in New Brunswick.
It has been promoting the new system to the public by emphasizing that refund amounts paid to those who return beverage containers have doubled.
"More money is now going back to consumers than ever before."
However, to help finance those larger refunds, Encorp is being allowed by the province to charge a patchwork of new container recycling fees that for consumers will reduce part, and in some cases all, of the value of the enhanced refund.
Encorp president Pierre Landry would not agree to an interview about the new charges to consumers, which Encorp is permitted by the province to set on its own.
He said, via text messages, that the fees are a complex issue that are not easy for the public to grasp.
"This transition has been very challenging," Landry said, in declining an interview request.
"As much as I would like to focus on environmental performance and consumer access and convenience, I do not have any further comments."
The single largest category of recyclable containers subject to a 10-cent deposit in New Brunswick is the plastic drink bottle, mostly used for water and soft drinks.
An estimated 154 million will be sold in New Brunswick this year and although the refund on those will increase by five cents, a three-cent recycling fee has been established by Encorp on those containers. In most cases it is payable by the consumer when the drink is purchased and reduces the benefit of the enhanced refund by more than half.
The effect is different on different types of containers.
On aluminum soft drink cans, the fee has been set at one cent. On aluminum beer cans, it is two cents.
However, on steel juice cans the recycling fee has been set at eight cents, three cents more than the increased refund on those containers.
Similarly, wine and liquor bottles which carry a deposit of 20 cents, will see refunds increase by 10 cents — not enough to cover their new recycling fee of 11 cents.
That makes the new fees nearly invisible in New Brunswick and difficult to track for interested consumers.
In British Columbia, where the industry body Encorp Pacific runs a nearly identical program, retailers are encouraged to show container recycling fees on retail receipts for the sake of transparency, according to the Recycling Council of British Columbia.
On its website, the council says Encorp Pacific "has encouraged retailers to show this fee as a separate item on your till receipt," much the way bottle deposit charges are itemized.
That's not the case in New Brunswick.
In materials explaining to retailers how the new system works here, Encorp Atlantic warns that the provincial government is forbidding retailers by regulation from disclosing any information to consumers about the new fee on receipts.
"While the presence of a [container recycling fee] can be communicated to the public, [it] cannot be presented by retailers as a separate line item that is part of the point-of-sale calculation on consumer receipts," retail store owners were told in a written directive on the issue.
In an emailed statement, New Brunswick's Environment Department said it is standing government policy that recycling costs charged to New Brunswick consumers on a variety of products, such as paint, oil, electronics and other products, not be shown on a customer receipt and the new bottle charges are the same.
"However, producers or retailers can inform the public of a recycling fee on producer websites, flyers, or shelving signage so there is visibility/transparency," said the statement.
Added to the murkiness for consumers is the fact Encorp says the container recycling fee charges are being levied on beverage companies and will be passed along to consumers as companies see fit.
New Brunswick's largest beverage retailer, N.B. Liquor, has said it is passing these costs onto consumers, but Encorp says it does not know if that practice will be universal.
"Brand owners may, at their sole discretion, decide to absorb these costs, or pass them on to retailers," Encorp states in materials explaining the new charge.
"Likewise, retailers may choose to absorb these costs, or pass on these costs to consumers."
In the changes, oversight for the bottle return program has been transferred from the New Brunswick Environment Department to the Crown corporation Recycle N.B.
However, last week Recycle N.B. said any questions about the new program and the new charges would have to be answered by Encorp.
Under the new program, Encorp can raise the container recycling fee it charges on 90-days' notice and, in an emailed statement, Recycle N.B. CEO Frank LeBlanc said his body has no authority over those issues.
"Encorp is not required to notify Recycle N.B. when [container recycling fee] charges are set or being adjusted, either as an increase or a decrease," said LeBlanc in the statement.
He said Recycle N.B. "does not review or approve" the container recycling fee.
Environmental groups are already expressing some nervousness about the decision to divert revenues away from the province's environmental trust fund to Encorp without a definitive plan in place to replace them.
A collection of three groups in southern New Brunswick issued a joint statement Friday asking for "consultation and dialogue" with the province about its plans to replenish the trust fund.
"We look forward to that consultation happening so that we can continue to support local environmental and community actions," read the statement from the Petitcodiac Watershed Alliance, Eastern Charlotte Waterways and ACAP Saint John.
A request to interview Environment Minister Gary Crossman about the changes was acknowledged by the department but not granted.
In a statement, the department said it understands the importance of the province's environmental trust fund to community groups that are supported by it, but a new method of financing the fund has not been settled on.
ABOUT THE AUTHOR
