January 14, 2026

From the evolution of Extended Producer Responsibility (EPR) for packaging, to plastics policy in flux, the pending CUSMA review, accelerating PFAS regulation, and changes affecting environmental claims, these are some of the key environmental issues the Paper and Paperboard Packaging Environmental Council (PPEC) will be watching in the year ahead.

Taken together, these issues show that packaging and recycling policy is becoming more complex and is increasingly shaping how companies plan, invest, and make packaging decisions.

Extended Producer Responsibility (EPR) – a policy approach where producers are financially and operationally responsible for managing the recycling of their packaging – continues to evolve across Canada, while new EPR laws are being introduced across the United States. Together, these developments are increasing costs, complexity, and uncertainty across the packaging value chain.

In Canada, the most recent shift is in Ontario, where the Blue Box program transitioned from a municipally operated system with partial producer funding to a full producer responsibility model. As of January 1, 2026, obligated producers are 100% financially and operationally responsible for residential packaging and paper recycling. While PPEC member mills and converters are not typically defined as obligated producers under EPR regulations, these changes are impacting the environment in which members operate.

EPR and recycling policies have long been relevant to PPEC and its members because the paper packaging industry relies on recycled content as its primary feedstock. Using and reusing recycled fibres is not just an input decision, it is a valuable resource that keeps materials in use and supports Canada’s recycling system. While that remains true, what has changed is the scale and impact of these policies. EPR is no longer just a cost or compliance consideration; it is reshaping packaging value chains, recycling systems, commercial relationships, and information flows across multiple jurisdictions.

As EPR obligations grow more complex across North America, brand owners and retailers, who are most often the legally obligated producers, are facing increased reporting and compliance demands. In response, they may seek more information, such as material composition and specifications, from suppliers to support EPR reporting.

Looking ahead, EPR can be expected to remain a visible and widely discussed issue in 2026. As programs transition and expand, challenges, learning curves, and confusion are inevitable in a complex recycling system with multiple stakeholders and overlapping legislative and regulatory requirements. EPR is not a simple policy to explain or implement. As a result, media coverage and stakeholder communications will not always capture its full complexity, even as it reshapes recycling systems and influences packaging decisions across North America.

Canada’s plastics policy framework remains in flux. While the Single-Use Plastics Prohibition Regulations remain in force, the legal foundation underpinning the federal approach continues to be challenged. The Federal Court of Appeal has not yet issued its decision in Responsible Plastic Use Coalition v. Canada, a case that raises questions about the federal government’s designation of “plastic manufactured items” as toxic under the Canadian Environmental Protection Act (CEPA).

Although the ban remains in effect pending the appeal, this ongoing legal uncertainty makes it harder for businesses to make long-term decisions about packaging design, material choices, and investments in alternatives to plastics.

Globally, negotiations toward a UN Global Plastics Treaty will continue in early 2026, advancing efforts toward a legally binding international agreement to address plastic pollution. Canada, as a founding member of the High Ambition Coalition to End Plastic Pollution, reiterated its commitment when G7 Environment Ministers met last fall and "reaffirmed their constructive engagement towards an international legally binding instrument on plastic pollution.”

As PPEC has previously outlined in its blog Why the Global Plastics Treaty Matters for Canada’s Packaging Industry, these global negotiations have the potential to influence domestic policy approaches, recycling systems, and packaging markets well beyond plastics alone.

While trade policy is not environmental policy, it can have potential impacts on recycling systems and packaging decisions. As PPEC has previously noted in its blog Exploring the Environmental Implications of Potential Tariffs, trade measures targeting specific materials or jurisdictions can influence supply chains, sustainability planning, and environmental outcomes in ways that are not always immediately apparent.

The Canada–United States–Mexico Agreement (CUSMA) is scheduled for its first six-year joint review on July 1, 2026. While the review is not expected to result in direct changes to recycling regulations, it may introduce uncertainty for recycling and recycled commodities markets. Changes in trade conditions could affect the economics of moving recyclable materials across borders, with implications for costs, end markets, and planning.

Per- and polyfluoroalkyl substances (PFAS) – a class of chemicals used across various industries, found in products such as firefighting foams, textiles, cosmetics, and some types of food-contact packaging – remain an evolving issue, with regulatory activity accelerating in Canada.

The federal government is advancing a PFAS strategy under the Canadian Environmental Protection Act (CEPA). This includes a proposed class-based approach that would add PFAS, excluding fluoropolymers, to the List of Toxic Substances, enabling future regulatory controls. The government is also expanding information-gathering and reporting requirements to better understand how PFAS are used and move through supply chains.

The first phase of this framework has begun. The Prohibition of Certain Toxic Substances Regulations, 2025 were published on December 31, 2025, and will come into force on June 30, 2026. While this initial phase does not focus on packaging, Phase 2 is expected to target food packaging materials, which could affect segments of the paper packaging industry.

Key issues for PPEC are the need to distinguish between intentionally added PFAS and unintentional or legacy PFAS, and how recycled content may be affected given that recycled materials may contain trace PFAS due to historical use, raising questions about measurement, mitigation, and regulatory treatment.

As regulatory approaches unfold, understanding how PFAS move through recycling systems and how they can be managed remains an evolving area of research. Members may see increased data requests from customers and additional reporting requirements from governments. Addressing PFAS will require coordinated action across regulators, manufacturers, suppliers, recyclers, and end markets, as it is not an issue for any single sector to solve in isolation.

PPEC continues to monitor developments related to making environmental claims in Canada, including proposed amendments to the federal Competition Act and recent changes in leadership at the Competition Bureau. Commissioner Matthew Boswell ended his term early, under whose leadership the Competition Act was amended to address greenwashing (the act of making misleading or false environmental claims).

At the same time, Budget 2025 proposed amendments to certain greenwashing provisions under the Competition Act, including a proposal to remove the requirement that environmental claims be substantiated using internationally recognized methodologies.

The proposed changes introduce uncertainty about how claims will be interpreted and enforced going forward. This matters for PPEC members and their customers because environmental claims, including when paper packaging is labelled as “recyclable,” must be clear, accurate, and evidence based.

As this evolves, members should be mindful of a shifting environmental claims legal and regulatory landscape in Canada and review company and product sustainability disclosures to assess risk and ensure appropriate substantiation. PPEC advises caution, including avoiding vague or absolute claims such as “100%” statements, while ensuring compliance with applicable federal legislation.

PPEC's Bottom Line...

Taken together, these issues reflect a common theme: environmental policy affecting packaging and recycling is becoming more complex and the impacts are adding up.

This is less about any one regulation and more about their combined effect. EPR is becoming more expensive and more visible, PFAS presents new challenges with many unanswered questions, and other policies continue to shift. The result is an environment where expectations are increasing, and where decisions made for one material or policy can affect other materials and recycling systems overall.

For the paper packaging industry, this means policy developments may play a bigger role in business and recycling decisions.

PPEC will continue to track these issues closely in 2026, supporting members as they adapt to a changing policy environment while reinforcing the role of paper packaging in a circular economy.