July 23, 2020

Financial Update for Stewards Registered with Stewardship Ontario's MHSW Program

The Stewardship Ontario Board has reviewed finances in light of the recent Resource Productivity and Recovery Authority (RPRA) approval of the Industry Stewardship Organization (ISO) Surplus Fund Transfer Addendum and has set initial fee reduction schedules for some MHSW materials.
 
As Stewards are aware, there have been a number of important developments since the original wind up plan was developed. Importantly RPRA conditions associated with approval of the ISO surplus fund transfer changed the methodology by which the share of surplus funds to be allocated between Industry Stewardship Plan (ISP) Members and Stewardship Ontario Stewards is determined. In addition, the COVID crisis has increased financial risk for the organization as it makes plans to wind up the MHSW Program. The April Ministerial direction Stewardship Ontario received regarding the ISO surplus fund transfer also acknowledges the possibility of a potential extension of the MHSW Program or a delay in transition to MHSW operations under the Resource Recovery and Circular Economy Act, 2016 (RRCEA). With 11 months remaining based on the current MHSW Program termination date, draft RRCEA regulations which are required to facilitate transition have not yet been published.  
 
All of these developments require Stewardship Ontario to take a more cautious approach to the implementation of fee reductions than was originally anticipated in the MHSW Wind Up Plan submitted in September 2019. Stewardship Ontario does not wish to invoice stewards for wind up costs. As such it must retain certain reserve amounts to deal with potential cost increases associated with the MHSW wind up process.
 
Initial fee reduction schedules are highly dependent on program cost variables and will likely be adjusted throughout the wind up process. When it becomes clear that the MHSW Program will terminate as currently scheduled, Stewardship Ontario should be able to allocate additional amounts toward fee reduction at the end of the program.
 
The planned fee reduction process for various MHSW materials is described below. All schedules are subject to further review as the wind up process unfolds.

Pressurized Containers (Refillable and Non-refillable)
Stewardship Ontario will implement fee reductions for these materials beginning with invoices sent to Stewards at the end of July 2020. Stewardship Ontario has invited all pressurized container stewards to attend a fee reduction webinar on July 28, 2020 where it will provide an update of finances for the material category and outline its estimate of fee reduction amounts for the remainder of the wind up period and describe the invoicing process associated with implementation of fee reductions.
 
Oil Containers and Oil Filters
Stewardship Ontario will implement fee reductions for these materials beginning with invoices sent to stewards at the end of October 2020. It will schedule an information webinar for these stewards at the end of October to provide an update of finances for the material category and outline its estimate of fee reduction amounts for the remainder of the wind up period and describe the invoicing process associated with implementation of fee reductions.
 
Antifreeze, Fertilizers, Paints and Solvents
Stewardship Ontario may be in a position to implement fee reductions for these materials some time in 2021. It will schedule an information webinar for these stewards in January 2021 to provide an update of finances for the material category and indicate whether a fee reduction can be implemented in these categories prior to the termination of the program.

Note: Stewardship Ontario currently does not have any stewards remaining in the pesticide category and as such will not be issuing any fee reductions with respect to this material category.
 
Single-use Batteries
The single-use battery program terminated on June 30, 2020. Stewardship Ontario will issue final invoices to stewards in this category at the end of September 2020. These invoices will include a fee reduction amount subject to final service provider claims and steward adjustment reports and actual costs incurred in the material category. Stewardship Ontario will schedule an information webinar for these stewards at the end of September to provide an update of finances for the material category, identify the amount of the fee reduction associated with final steward invoices and describe the anticipated process for the eventual disbursement of any residual funds associated with the material category.
 
Please note: Stewards registered with Stewardship Ontario have been allocated a portion of surplus funds in each MHSW material category. Stewardship Ontario will ensure that all Stewardship Ontario stewards benefit from the allocation of these surplus funds through the disbursement of fee reduction amounts or by lowering costs that would otherwise be payable to Stewardship Ontario by these stewards.
 
It is Stewardship Ontario's intention to manage finances related to the wind up of the MHSW Program that is fair for all program participants and consistent with the principles of the program's governing statute and regulations.

Stewards with any questions about this notice or MHSW Program financing should contact Stewardship Ontario at mhswwindup@stewardshipontario.ca.