Surrey Board of Trade Says No Support for Metro Vancouver’s Proposed Waste Levy
Metro Vancouver is proposing bylaw changes to the areas of Generator Levy, Hauler Licensing and Bylaw 181. There has been a consultation underway on Metro Vancouver’s solid waste regulatory framework.
Metro Vancouver will consider proposed bylaws on November 24 on Solid Waste Regulatory Proposals, Waste Hauler Licensing Bylaw, Solid Waste and Recyclable Material Regulatory Amending Bylaw 309 and the Tipping Fee and Solid Waste Disposal Regulation Amending Bylaw No. 308.
“The Surrey Board of Trade has a responsibility to review changes of policy or legislation or programs at all levels of government if they impact our members,” said Anita Huberman, CEO, Surrey Board of Trade.
“Often we agree that such changes may improve economic opportunity. At other times, however, we find that suggested changes would in fact impede members’ ability to compete fairly in an equally balanced marketplace. The proposed generator levy, coupled with a hauler licensing program is one that has caused us concern.”
The Surrey Board of Trade’s Environment & Infrastructure Team reviewed the proposed levy and licensing, and hosted representatives from Metro Vancouver and the Waste Management Association. The members discussed the pros and cons in detail and have come to the conclusion that there are challenges to our members and to the concept of fairness of economic opportunity. As such, the Surrey Board of Trade cannot support the program as outlined for the following reasons:
1. Inherent Conflict of Interest
The changes unfairly skew the market in favour of Metro Vancouver. Metro is regulating the waste disposal/waste haul business in Metro Vancouver. At the same time it is the owner/operator of major waste disposal and waste transfer facilities in Metro. Its proposed regulation can easily be seen as a means of protecting its investment and supporting its operating cost rather than a sincere attempt to provide needed service in the most efficient way and at the lowest cost to the consumer/taxpayer.
There is also an inherent conflict between Metro’s zero waste initiatives and its need to provide revenue to its waste disposal and transfer facilities. Revenues are volume dependent and Metro cannot arbitrarily continue to raise per unit prices to compensate for declining volumes. Progress in environmental management should yield dividends for society at large. Metro needs an analysis to show how improved waste handling reduces everybody’s costs and a plan to scale back its waste management costs as progress takes hold. Less waste should logically mean less cost. A schedule increasing disposal fees from $80/tonne to $93/tonne (16%) over the next 5 years does not meet this expectation.
“If waste haulers are paying a $40/tonne levy to Metro Vancouver, regardless of whether they utilize a Metro facility or a private facility, how can a private facility compete? Simply, they can’t. The market is skewed in favour of Metro.”
2. Impact on Haulers
Most, if not all, commercial waste haulers already provide source separating containers for their clients. However, the onus is now on the haulers to change the behaviour of waste generators, as per Metro’s goal to increase the effectiveness of source separation of mixed solid waste. Haulers compete for client contracts – admonishing haulers for client inability to source separate through fines and other penalties, requires the haulers to be in the position of enforcers of municipal by-laws, without the means or the authority to do so.
The recourse of “off-loading” or downloading the fine onto their clients, breaches current contracts and is a detriment to future contracts. The challenge is that multiplex units and multi-family towers provide individual anonymity when it comes to non-compliant behaviour, regardless of how many times a hauler may leave letters and notices. Waste haulers realistically have little or no means to influence the behaviour of their customers. Source separation has inherent inefficiencies and there are better, more efficient ways to accomplish these objectives. These alternative solutions might even create a few jobs and a contribution to provincial GDP.
3. Licenses as Free Market Disincentives
As the Surrey Board of Trade understands the intended Commercial Waste Hauler Licensing (By-law 181 amendments), licenses are five years for private facilities, and ten years for waste haulers. Neither time period is sufficient to provide long-term stability required by financial institutions or business development strategies. Compounding the detrimental limitation is that the only avenue to appeal is through the same license granting agency.
The short license terms are a major disincentive to private sector investment. Metro is intending to build a transfer station facility in Coquitlam at a cost of about $57M. How can a private entity be able to raise similar investments with only a 5-10 year license; a license that is granted and reviewed by a competitor in the open market?
“It is worth noting that across the street from the new proposed Metro facility, there is a private investor who has an approved license and is willing to commit the capital so long as the split fee and facility license are not in place. This would in effect save Metro Vancouver $57 million in capital costs.”
“The private sector companies — waste haulers and facilities — are full participants in the waste management for the Lower Mainland, and if given sufficient opportunity, could be the means by which Metro can save millions in capital expenditure and operating costs.”