An environmental controversy is brewing in Manitoba. A new Eco-Fee is likely to be introduced on consumer products, specifically electronics. When you go to Best Buy to purchase your new flatscreen TV, you will be hit by an additional fee that could be upwards of $25.00. The fee will appear on your receipt below the subtotal, similarly to a tax.
But here's the thing. It isn't a tax. At least, not a government-issued tax. It is a fee imposed by industry.
Presently, much the recycling and disposal costs in Manitoba are covered by the provincial and municipal governments, funded through provincial and property taxes. But new rules will soon have industry footing their share of the bill, which happens to be most of it. And since companies can't grab from your property tax bill, they will be funding many of the costs by charging consumers a separate fee.
Having industry incur the costs of recycling and disposing of products it creates is a step in the right direction, but the Eco-Fee issue sparking in Manitoba is illustrative of a wrong turn that is all too frequent in environmental policymaking. Two parties hate regulation: industry and the government. Industry, of course, doesn't like the hassle and added costs of government interfering with its business. Government, commonly misperceived as control freaks, generally don't want the hassle and costs of policy creation, enforcement and monitoring. So when something needs to happen -- say, industry paying for disposal of their products -- a common policy takes form: the 'industry-led initiative'.
Such an initiative is generally brought about by a "Stewardship" association, which is basically a group of companies. They see the writing on the wall, and instead of accepting government regulations, they come up with their own plan; "we'll do it, just in our own way". It is usually less strict than regulations would be and are typically voluntary in nature. Both government and industry win out. The environment loses.
Many industry-led initiatives are great and get the job done. But in the case of eco-fees, it isn't the best method. We need only look at the debacle in Ontario. Huge consumer backlash occurred when similar eco-fees were introduced by Stewardship Ontario. Thanks to a very poor information campaign by the industry association, lots of people thought it was a new tax by the government and became known as a secret tax. This was even more problematic given the new and unwelcome Harmonized Sales Tax the province was implementing. Stewardship Ontario and the province threw tantrums each other's way, more consumers got pissed and the fee has since been pulled.
What should have happened is a full blown extended producer responsibility program whereby industry would simply incorporate the added costs of disposal into the cost of the product, rather than a deceiving fee. For industry, the formula would be simple. Make your products easier to safely dispose of and it can be cheaper, attracting more customers.
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