July 15 Public Consultation Webcast & Round Table

1. July 15 Public ConsultationWebcast & Round Table Slide 1

2. Consultation Process • Issues identified in approved Blue Box Program Plan (BBPP) • Revising the governance structure • Market development • Two phases Slide 2

3. Webcast & Round Table Consultation Stewards & Stakeholders Consultation Process: Phase 1 Slide 3

4. Consultation Process: Phase 2 Considering Options • Seek opinions on issues in approved BBPP only • Timing of “enhancements” requested by Minister; potential impact on fees unknown Slide 4

5. Preliminary Steward Fees 2005 • At August 25 open consultation- • will also present preliminary stewardship fees for 2005 & • basis for calculating those fees Slide 5

6. Phase 1 Objectives • Solicit feedback early in process • Build on lessons learned from implementation of BBPP Slide 6

7. Today’s Agenda • Welcome • Topic #1: Governance, Derek Stephenson • Topic #2: Market Development, Geoff Love • Questions/comments from webcast participants • Break (webcast ends approximately 11 a.m.) • Round Table #1, One hour • Break – food available for working lunch • Round Table #2, One hour • Closing remarks (approximately 2 p.m.) Slide 7

8. Format • Webcast participants - handling questions • Moving to ‘Round Tables’ - option Slide 8

9. Derek StephensonRevising the Governance Structure Slide 9

10. Presentation Overview • Review current Board of Directors • What current BBPP includes • Steward registration update • Issues to consider • Options for discussion only • Next steps Slide 10

11. Board of Directors • Food & consumer products manufacturers • Non-alcoholic beverage manufacturers • Grocery distributors • General merchandise retailers • Newspaper publishers • Paint manufacturers & consumer & chemical product manufacturers • Retailer of alcoholic beverages • Stewardship Ontario CEO Slide 11

12. up to 20 seats up to 7 additional sectors Future Governance Model Approved BBPP states that the founding Board would expand to: Number of industry sectors will be determined when total members & proportion of total annual fees contributed by each sector is known Slide 12

13. Future Governance Model Additional sectors may include: • Electronic & electrical products • Toys & sporting goods • Non-prescription pharmaceuticals • Quick service food • Importers • Distributors • Hardware & automotive Slide 13

14. Generate designated Blue Box wastes Other companies with commercial connections to Blue Box wastes Other persons with an interest in corporation’s activities Initial Criteria for Eligibility As agreed by Stewardship Ontario’s Board of Directors Slide 14

15. Additional Considerations for Board of Directors • Configuration & voting representation would consider financial contributions of each sector to Stewardship Ontario • Board decisions will require majority vote & approval of minimum number of sectors • Stewardship Ontario will review size & composition of Board annually Slide 15

16. Registration Status Report Current to July 8, 2004 • 1384 registered Stewards • 443 registrants have not yet filed reports • 2,000 (estimated) additional potential Stewards identified & not yet registered • 350 registered Stewards; represent 97% of reported levies owing • 591 other registered Stewards account for remaining 3% of fees to date Slide 16

17. Financial Contribution by Sector Slide 17

18. Some Issues to be Considered 1. Is Board representation by sector appropriate? 2. Are membership criteria correct? 3. Restructure only when full membership composition known? 4. Review annually or less often? Slide 18

19. Today’s Discussion Three possible options: • Maintain current sectoral representation • Expand Board to between 12 & 15 members, including Non-Stewards • Expand Board to 20 members, including Non-Stewards Slide 19

20. Please Note • Options are for discussion only • Options not reviewed by Stewardship Ontario Governance Committee or Board • Comments on other alternatives welcome Slide 20

21. Option 1 Continue with current Board composition with voting rights tied to financial contribution Slide 21

22. Option 1 (cont’d) • Maintain current Board sectors with voting rights allocated on reported financial contributions • Representation from other stakeholders (material suppliers, NGO) could be considered (non-voting) Slide 22

23. Option 1 Analysis • PROS: • Voting reflects financial contribution • Easy transition from current Board • CONS: • ‘Strong get stronger’ • Not seen as ‘inclusive’ • No direct representation from other key stakeholders • Major generators of Blue Box materials (i.e., newspapers) get relatively small representation • Sectors on current Board represent approximately 91% of fees contributed and 88% of tonnes reported Slide 23

24. Option 2 Increase Board of Directors to between 12 &15 seats Slide 24

25. Option 2 (cont’d) • Add sectors to existing Board & add non-steward representation: • 3 to 5 more contributing sectors (based on financial contribution) • 1 to 2 AMO or NGO Slide 25

26. Option 2 Analysis • PROS: • Wider steward representation • Greater transparency by including Non-Stewards • Introduces ‘fresh blood’ • CONS: • Voting may not fully represent financial contribution • Increased size may encumber decision making • Some obligated industry sectors may not feel represented Slide 26

27. Option 3 Increase Board seats to 20 Slide 27

28. Option 3 (cont’d) • Allocate 70% of Board (14 seats) on basis of payments in, with: • 20% (4 seats) to material suppliers • 10% (2 seats) to AMO/NGO Slide 28

29. Option 3 Analysis • PROS: • Protects relationship to payment in • Includes material suppliers & other stakeholders • Greater transparency & political comfort • CONS: • Not purely ‘pay as you play’ • Some stakeholders oppose key elements of BBPP • Increased size, strategic differences complicate decision making Slide 29

30. Next Steps – Summer 2004 • July 23 – Post draft report on comments received today & preliminary recommendations • Aug. 6 – Closing date for comments on draft report • Week of Aug. 15 – Stewardship Ontario Governance Committee to review draft report; post preferred option(s) • Aug. 25 – Webcast & public consultation on options Slide 30

31. Next Steps – Fall 2004 & Beyond • Early September – Governance Committee to review comments; recommendations to Stewardship Ontario Board of Directors • September/October – Recommendations to WDO Board of Directors • Selected governance model takes effect by next Annual General Meeting (June 2005) Slide 31

32. Your comments, please! Slide 32

33. Geoff LoveMarket Development Slide 33

34. Overview of Market Development • Approved BBPP on market development • Market development progress; where we are relative to BBPP targets • Your thoughts on how to proceed on market development Slide 34

35. Market Development & Targets The program will: • Include targets for overall quantity of Blue Box waste to be diverted …, & material specific targets for Blue Box waste to be captured …; • Include a plan, with funding provisions, outlining activities to develop &promote products that result … From Minister of Environment’s September 2002 request for Blue Box Waste Diversion Program Slide 35

36. Three core elements in market development strategy in approved BBPP: Public-private Green Procurement initiative Targeted Market Development Investment program for recycled glass Market Development Plans for others as needed to meet targets BBPP Market Development Slide 36

37. Market Development Goals • Support developing capacity to use all recovered Blue Box materials. • Promote enhancement of recovered material value. • Enhance material recovery to meet targets (where markets are the barrier). • Reduce overall Blue Box Program costs. Slide 37

38. Guiding principles: Stewardship Ontario to invest in market development in partnership with others. Stewardship Ontario’s investments to be linked to material specific targets; support end markets for targeted tonnes at next least cost. Market Development Principles Slide 38

39. Principles (con’t) • Avoidcross-subsidizing material-specific market development. • Implement a Request for Proposal/competitive bid process to allocate market development funds. Slide 39

40. Glass Market Development Investment Program • Implementation Projects: longer term • Up to $2 M (from glass Stewards) for 2004/05 • REOI posted on website (7 responses) • MacViro retained to review & evaluate REOIs • Initiating meetings with GTA municipalities, re: mixed glass tonnes • Detailed RFP for qualified applicants (fall/winter) Slide 40

41. Glass (con’t) • Glass Business Planning/Feasibility Study: nearer term • $500K business planning & feasibility study fund to support projects up to $25K (matching funding basis) • ReMM retained to help develop funding guidelines & identify priority projects (increased tonnes and/or reduced costs) • Plan to post guidelines - late July; first project funds expected in fall 2004 Slide 41

42. Green Procurement Update • Program Goal: demand pull for Blue Box materials (reduce costs) • Initial design considerations (from BBPP): • Voluntary; not labeling driven • Public-private joint initiative; not to re-invent wheel • Results driven • Consider codes/best practice promotion approach Slide 42

43. Green Procurement Update (con’t) • “Visioning” workshop: June 22 • 4 expert speakers • Technical exchange with London Remade, re: lessons learned from Green Procurement program • Workshop report on website (July 19) • Green Procurement Business Plan to Stewardship Ontario Board, mid September Slide 43

44. Market Development: Others • Market development investments tied to material specific targets(5 year program) • WDO’s Cost Effectiveness Committee report recommended considering future market development activities (not yet approved) Slide 44

45. WDO’s Cost Effectiveness Committee Considerations • Prepare/adopt green procurement protocols • Assess additional market development levies to support low revenue materials • Analyze alternative glass markets/ investigate glass colour sorting technologies • Investigate including composite cans/ expand polycoat materials Slide 45

46. Cost Effectiveness Considerations (cont’d) • Start cost & quality analysis; single stream recycling • Assess impact of increasing recovery of “other household papers” on paper markets • Investigate cooperative marketing service • Implement mixed plastic & plastic film RFQs Slide 46

47. Current Recovery Rates 2001 2002 Actual Estimated Actual Estimated Material Change 2001 - Projected Projected Reported Recovery Reported Recovery 2002 Generation Generation Recovery Rate Recovery Rate (tonnes) (%) (tonnes) (tonnes) (%) (tonnes) (tonnes) (%) PRINTED PAPER 724,100 391,435 54.1% 732,000 409,754 56.0% 18,319 4.7% Printed Paper Total PACKAGING 325,400 134,822 41.4% 332,300 134,980 40.6% 158 0.1% Paper Packaging Total 232,200 26,989 11.6% 238,700 31,928 13.4% 4,939 18.3% Plastics Total 67,900 32,582 48.0% 69,100 33,472 48.4% 890 2.7% Steel Total 28,100 10,875 38.7% 27,000 10,776 39.9% (99) -0.9% Aluminum Total 176,300 102,552 58.2% 179,400 106,097 59.1% 3,545 3.5% Glass Total 829,900 307,820 37.1% 846,500 317,253 37.5% 9,433 3.1% PACKAGING TOTAL TOTALS 1,554,000 699,255 45.0% 1,578,500 727,007 46.1% 27,752 4.0% Similar increase indicated from 2003 Datacall Slide 47

48. 2006 Target Recovery (50%) 2006 Proposed Proposed Material Increase in Target Target Recovery over 2002 Recovery Recovery Rate Total Increase: ~ 20% over 2002 (tonnes) (%) (tonnes) (%) PRINTED PAPER 466,500 60.1% 56,746 13.8% Printed Paper Total PACKAGING 168,600 47.9% 33,620 24.9% Paper Packaging Total 36,900 14.6% 4,972 15.6% Plastics Total 43,100 58.8% 9,628 28.8% Steel Total 14,000 49.0% 3,224 29.9% Aluminum Total 142,600 75.0% 36,503 34.4% Glass Total 405,200 45.2% 87,947 27.7% PACKAGING TOTAL TOTALS 871,700 52.1% 144,693 19.9% Slide 48

49. Annual Increase to Reach 50% 2006 Proposed Annual Increase Proposed Material Target in Recovery over Target Recovery Recovery 2002 Annual increase similar to recent years • 2001 to 2002 • 2002 to 2003 Rate (tonnes) (%) (tonnes) (%) PRINTED PAPER 466,500 60.1% 14,300 3.5% Printed Paper Total PACKAGING 168,600 47.9% 8,400 6.2% Paper Packaging Total 36,900 14.6% 1,300 4.1% Plastics Total 43,100 58.8% 2,500 7.5% Steel Total 14,000 49.0% 800 7.4% Aluminum Total 142,600 75.0% 9,100 8.6% Glass Total 405,200 45.2% 22,100 7.0% PACKAGING TOTAL Slide 49 TOTALS 871,700 52.1% 36,400 5.0%

50. 50% Recovery by 2006 900,000 800,000 700,000 glass 600,000 aluminum 500,000 steel plastics 400,000 paper packaging 300,000 printed paper 200,000 100,000 0 2001 2002 2003 2004 2005 2006 Similar increase to 2003 Datacall Slide 50