Canada's most populous city stands to lose millions of dollars to a new deposit return program in Ontario that covers liquor store purchases, and officials are looking to the province to offset the loss.

Even though Toronto Mayor David Miller calls the return program "the right thing to do," he notes that it's a "several-million-dollar concern."

Miller's comments come in response to documents obtained by The Canadian Press under the Freedom of Information Act, which state the city stands to lose a substantial revenue stream under the deposit return program for Liquor Control Board of Ontario (LCBO) containers.

The Ontario government launched the deposit return program in February and while the exact financial impact it will have on other Ontario communities is not known, the program runs provincewide.

Under the program, almost all liquor containers purchased can be returned to the province's beer stores for a full deposit refund.

The documents outline three key areas where city revenues will take a hit as a result:

  • There will be less blue box content to sell to the glass market
  • The cost per tonne of processing blue boxes will rise because the same number of crews and trucks will still make the same number of stops, no matter how full the city's blue boxes are
  • Scavengers will have more material to illegally pluck out of blue boxes, exacerbating the city's loss of salable blue box content

"No . . . savings are expected from less LCBO containers in the waste stream," reads a briefing note prepared last month by Toronto's Solid Waste Management Services division.

"There will also be lost revenue from the removal of aluminum, PET (clear plastic) and gable-top (paper with plastic screw top) LCBO containers."

Miller and city officials said it's too early to know how many millions of dollars the city will lose this year. Officials will have a better grasp of the financial impact in a few months, Miller told The Canadian Press.

"We won't know, probably for the remainder of the year, whether there will be significant amounts of glass left in our system so that we can pursue the aggregate replacement market," Miller said.

A September 2006 letter from the mayor's office to Ontario Environment Minister Laurel Broten, also obtained by The Canadian Press, said the city already has a "significant problem" with scavengers targeting beer containers and aluminum cans.

Putting a deposit return on liquor store containers will only "exasperate and expand the problem." The city anticipates losses in the "hundreds of thousands of dollars per year" to scavenging alone, Miller wrote.

The mayor called for Waste Diversion Ontario, the provincial agency that distributes blue box funding to the municipalities, to pay the full cost of the blue box program. That would give Toronto an extra $5 to $8 million each year, Miller wrote.

Anne O'Hagan, a spokesperson for the province's environment minister, said the government is taking a wait-and-see approach before it makes any further funding decisions.

The Ontario government notes that Toronto already receives funding intended to ease the transition from its blue box program to the deposit return program.

Under the provincial Waste Diversion Act, all companies that produce packaging and printed material in Ontario, known as stewards, must pay for 50 per cent of the province's municipal blue box waste diversion programs.

However, Ministry of Public Infrastructure Renewal spokesperson Amy Tang said that under the new deposit return program, the board is no longer a designated steward. That means it no longer pays the 50-per-cent fee to Stewardship Ontario, the provincial body that collects packaging fees from industry.

The board has agreed to pay Waste Diversion Ontario $5 million this year and another $5 million next year to help municipalities offset any lost revenue, Tang added.

The province will review the funding in two years' time to determine whether more money is warranted, she said.

At the very least, the mayor says he wants the liquor control board to remain a steward so it will continue to pay half the cost of running the blue box program.

"We don't want to lose that funding because of the deposit return," Miller said.

Geoff Rathbone, the acting general manager of Toronto's solid waste department, said the $5 million is "pretty much what they contributed to (Waste Diversion Ontario)" through Stewardship Ontario.

But he said the city is concerned about the cost of recycling those containers that stay in the blue boxes after the two-year funding period passes.

It costs the city $120 per tonne to pick up and process blue box material, Rathbone said. The cost could rise, he said, if less recyclable material ends up in the blue boxes, because the city has "a certain fixed cost to go out each day and to collect material."

In just two months, Rathbone says there's already been a 50-to 80-per-cent drop in the amount of glass tonnage collected by the city. The city expects to lose more than 100,000 tonnes of glass by year's end, he said.