Eco fee or eco tax?

July 15 2010 by Ellen Roseman

The Ontario Ombudsman wants to wade into this stinking pool of surcharges that are popping up on sales receipts. That’s great news.

Lately, I’ve been thinking that an eco fee really is a tax. Here’s why.

In my latest column, I said the goal was to shift the cost of disposing of hazardous wastes from taxpayers to product manufacturers and importers. That’s what I was told by Stewardship Ontario.

But everyone knows that businesses don’t absorb extra costs for long. They pass the costs on to consumers and that’s exactly what is happening.

Ontario Electronic Stewardship is a similar program for recycling computers, printers, TVs and phones. As you can see here, the fees have gone up substantially. Businesses will get consumers to swallow the cost.

These stewardship programs are shifting costs from municipal taxpayers to consumers. You and I are still paying to recycle hazardous wastes, but now it’s through a user-pay system.

It would be great if we could avoid buying these costly-to-dispose products, but we can’t. Today, the Canadian Consumer Specialty Products Association (CCSPA) and the Consumers Council of Canada (CCC) asked the Government of Ontario to remove soaps, detergents and cleaning products from the eco fee program.

“Consumers do not throw out half-empty containers of soap or detergent,” says CCC President Don Mercer. “Rather, they buy what they need and use it up. The eco fee, in effect, charges consumers for a service they will not use.”

Ontario makes money from eco fees. The harmonized sales tax is applied on top of the fees, so there’s a huge potential for higher revenue.

Blogger Preet Banerjee picked up on this point in his recent post.

Many readers told me they were shocked to see taxes piled on other taxes. Gasoline, for example, is already heavily taxed by both federal and provincial governments. Now it has the 13 per cent HST on top.

Some said they’ve seen stores charging 5 cents for plastic bags, adding HST (0.65 cents) and rounding up the cost to 6 cents. Is this even legal?

One reader, who paid 64 cents to mail a letter — since HST is added to the 57-cent cost of a postage stamp — pointed out that a stamp is also a tax.

Ontario should admit that eco fees are actually a tax. As such, they should be made visible and standardized. There should be a complete list published in booklet form, just as was done for the HST.

This is not a program of making businesses pay more. It’s a pass-through to the consumer.

17 comments

  1. Riscario Insider | @riscario

    Jul 15 2010

    The eco fee looks like a tax.

    I have functioning computer equipment to donate and the charity now has handling fees to offset recycling costs. The equipment works. There’s no recycling involved. Why penalize generosity?

  2. Brian Matthey

    Jul 16 2010

    New Twitter account

    McGuintyhas2go

    Come on Ontario speak up-Enough is enough!

  3. rab

    Jul 16 2010

    This is just one more example of government’s tendency to constantly push more and more taxes on Canadians in various jurisdictions.

    What is most disgusting about this is that as taxes increase, flagrant and abusive government spending increases – often to the direct or indirect benefit of the politicians who voted for it.

    I’d be tempted to vote for a party that would take real action against such abuse, but it looks like none of these foxes is willing to disturb the hen house status quo.

  4. second opinion mike

    Jul 16 2010

    We get the kind of government we deserve!

    This may be amongst the most cynical of tax gouging strategies, but it is the culmination of consumers/voters ignoring the health fee tax, the increased user fee taxes, the tire recycling tax, etc etc etc.

    You either vote your way out of the cycle or you whine for a week and then just accept it.

    Clearly, past Ontario voters have opted for the whining solution. Hopefully, tomorrow is another day and people will stay motivated to end the cynical cycle we have allowed to develop.

    I do not blame McGuinty…..I blame me!

  5. DK

    Jul 16 2010

    This EcoFEE is either a tax or it should be included in the advertised price of the item.

    If the manufacturer is charged this fee, I am fine with them passing it down to the retailers and then on to the customer. That’s the natural flow of production cost.

    However, it should be illegal for retailers to advertise a product on the shelf and then add this fee after.

    I have no problem with your bill showing a breakdown of cost, but the price of any item advertised should include all taxes.

    It works for gasoline, why can’t it work for everything else?

  6. NT

    Jul 18 2010

    Manufacturers have the option to absorb the cost, but it appears that it’s simply being passed on to the retailers, who choose to pass it on to the consumer.

    I purchased eco light bulbs at Home Depot and was charged $0.84, but when I asked the manager how the fee was determined I could not get a straight answer.

    Instead, I was told to check the website. When I said the fee should be posted, I was told that there were thousands of items and Home Depot was not prepared to update their price list.

    This is just plain wrong. As a consumer, I should know ahead of time exactly how much I’m paying – is it going to be 5 cents or 10 dollars? – not at the cash register.

    I’m so angry that this tax or fee, whatever you want to call it, was implemented. I’m absolutely furious. What can I do to voice my concern?

  7. m.a. horton

    Jul 19 2010

    I would like to know why I have to pay an eco fee when I purchase paint, then to get rid of the can I also have to pay the hazardous waste company more money to dispose of the can????

    It used to be free to take your stuff there to keep it out of the landfills, and all it used to cost was the cost of the gas to get there……

    Hello, garbage can.

  8. bill & sylvia waud

    Jul 19 2010

    I think this so called eco fee is a disgrace to the people, especially to people on fixed incomes, seniors who rely on old age security and the Canada pension plan.

    The so called old age security was adjusted every three months based on the cost of living, “BUT” the government have seen fit to freeze it. It has not been adjusted in 13 months, if I am not mistaken.

    Canada is the highest taxed country in the world. Enough is too much. BACK UP!

  9. j a szakon

    Jul 21 2010

    re: “What you’ve got is the tax being passed on from someone to the consumer which means it’s an indirect tax, and under the Constitution Act… the province can only impose direct taxes, they can’t impose indirect taxes.”

    SADLY, THIS DIRECT VS INDIRECT TAXATION LEGEND, WHICH WE WERE ALL TAUGHT IN SCHOOL, IS NO LONGER LAW — if it were, the GST would be illegal (provincial jurisdiction): Provinces do sales taxes, the Feds do income and excise taxes “and never the two shall meet”. That was Canadian Law and precedent for quite a while.

    Maybe like the lack of an amending formula in our revised Constitution (Act of 1982), that direct vs indirect taxation rule was over-looked? erased? made subject to the notwithstanding clause?

    The PROBLEM is taxpayers (voters, citizens) are so used to being ripped off/overtaxed/having specific-purpose taxes thrown into “general revenues” and slush-funded into wherever the government of the day decides it suits them best (eg, the EI/UI surplus, tire taxes) that they have lost the ability to rise up and SHOUT at the governments involved in these SCAMS to STOP!

  10. Humberto Oramas

    Jun 21 2011

    @Ellen Roseman: In B.C. we’ve had eco-fees for so long we forgot to bitch. Last year the B.C. fiberals snuck in the HST behind our backs and is charging it on the fees like your McSquinty did. Did the ombudsman look into it and make a ruling? Cheers! We have a fight coming up.

  11. Rob

    Jan 4 2012

    I’m not angry at the idea as much as the implementation. Doesn’t the Beer Store already have this recycling thing figured out with the deposit system?

    At least this would work for electronics. Hit me up for $10 when I buy the TV and give it back to me when I bring it back.

    BTW, there are recycling companies that will give you cash for your used electronics. So on top of our fee/tax, I’m sure our wonderful government is profiting further from this as well.

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