Copyright 2009, Blake, Cassels & Graydon LLP
Originally published in Blakes Bulletin on Environmental Law, May 2009
On May 20, 2009, Éco Entreprises Québec (ÉEQ) put its reporting and payment system online, making it easier for companies to help pay for curbside recycling programs in the province.
Industry in Quebec began paying these dues in 2007, for reporting year 2005/2006. The next reporting and payment deadlines (for 2007) are August 5 and September 4, 2009, respectively. Returns can be filed, and dues paid, at http://www.ecoentreprises.qc.ca .
Legal Framework
Quebec's Environment Quality Act provides that companies may be required to pay a portion of the cost of recycling the containers, packaging and printed matter used to market their products. Under Quebec's extended producer liability program, industry associations such as ÉEQ are responsible for adopting fee schedules (subject to government approval) and collecting fees from member companies. ÉEQ hands over the fees to RECYC-QUEBEC, which in turn distributes the money to municipalities, to help pay for up to 50% of the cost of their curbside recycling programs. A different industry association, ReycleMédias, collects dues for written media. Written media is distinguished from printed matter in that it delivers news, opinion or comments at fixed intervals (at least once a year).
Draft fee schedules are published in the Quebec Official Gazette every year and include information on exemptions, dispute settlement procedures, and other related issues. Interest charges apply for late reporting and the schedule of contributions sets a date after which penalties will be imposed. For the 2007 reporting year, the deadline is November 4, 2009. In the current schedule, penalties are 10% of the contribution owed, rising to 20% if ÉEQ has to pursue legal action to collect the dues.
Inclusions and Exemptions
The owner of a brand, name or "distinguishing guise" is required to pay dues in relation to: i) containers and packaging used for marketing a product under its brand in Quebec; ii) containers and packaging identified by its brand; and iii) printed materials identified by its brand. If, however, the owner of a brand has no place of business in Quebec, the first supplier may be required to pay the dues even if he or she did not import the products. Containers and packaging that are added to a product in a retail outlet are exempted from dues unless the retail outlet is operated under a franchise from the brand owner or a similar arrangement.
For 2007, there are three additional important exemptions. Where consignment systems (such as for beer bottles) or recycling programs are already in place, participating companies are exempt from paying dues to ÉEQ. Companies that have only one retail outlet or have revenues under C$1-million are exempted. Finally, companies producing less than a metric ton of covered materials are also exempted.
The fee schedule contains a price index for each class of material that is used to calculate an annualized contribution amount based on weight. Companies that produce between one and five metric tons of covered materials can opt to pay a lump sum.
What is meant by "containers", "packaging" and "printed matter"
Containers and packaging include materials used to contain, protect, wrap or present a product at any point in the supply chain. The following important exemptions apply:
1) containers and packaging whose ultimate user is a commercial or industrial establishment;
2) transport packaging, unless also used for the delivery of the product to the consumer;
3) containers and packaging themselves sold as products, unless given free of charge;
4) containers and packaging made to protect a product throughout its use, if designed to last for five years or more; and
5) containers and packaging that are taken into charge at the distribution site, for example, french fries and burger boxes used by fast food restaurants where the food is consumed on the premises.
The "printed matter" category covers a wide range of materials, from annual reports to telephone books and complimentary calendars. However, books and written media are always excluded from this category.
Conclusion
To avoid additional costs and to maintain positive business relationships down the supply chain, all brand owners operating in Quebec or selling products here should be aware of this contribution system. Failure to make declarations and pay dues on time can result in penalties and can negatively impact retailers who may face claims from ÉEQ for unpaid dues.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
