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Government Watch
  Monthly Summary Report (March-April 2011)
 


INTRODUCTION

In order to keep our members further informed on the latest government regulations and stewardship programs affecting the industry, the CHHMA has introduced a new Government Watch Monthly Summary Report. The report will be sent out at the end of each month as well as posted on the CHHMA website in the News section.

The report will include information on any new legislation or recycling/stewardship programs as well as keep members updated on news and progress of legislation and programs introduced in previous issues.


THE FEDERAL BUDGET (MAY 3, 2011)

Parliament Dissolved and Budget Died

When Parliament was dissolved in late March for a General Election on May 2, all business on the Order Paper automatically died. That was the fate of the federal Budget for the government’s fiscal year that began on April 1st. Once Parliament is re-convened following the election, an early item of business will likely be a further Budget.

There are elements of the March Budget that merit the attention of CHHMA members.

The Economic Outlook

An important part of every Budget is the Economic Outlook section. The Department of Finance regularly surveys 15 private sector economists for their views on the outlook for the Canadian economy. These economists have had a proven track record over many Budgets. Accordingly, CHHMA members can regard these Budget projections with a reasonable degree of confidence as they compare these results to their own business outlooks. The Budget reflected a survey of them carried out in early March.

The private sector economists expect Gross Domestic Product (GDP) to expand at a 2.9 per cent rate this year and then decrease gradually to a 2.5 per cent rate in both 2014 and 2015. It is generally accepted that annual GDP growth of less than 3.0 per cent is indicative of an economy that is under-performing.

U.S. GDP growth is heading in the opposite direction, according to our private sector forecasters. They expect a growth rate this year of 3.1 per cent, gaining slightly to 3.3 per cent in 2014 before reducing to 3.2 per cent in 2015. They also believe that the Exchange Rate (US cents/C$) will average 99.7 cent this year. It will then contract slowly but steadily to 96.5 cents by 2015.

Short-term rates, as measured by the 3-month treasury bill rate, will rise from an average of 0.6 per cent in 2010 to 1.3 per cent this year and then climb steadily to 4.1 per cent in 2015. The private sector forecasters expect the same patter to prevail for long-term, rates, this time as measured by the 10-year government bond rate.

Healthy Housing Market Essential

CHHMA has long advocated that a buoyant housing market in Canada is essential to the overall health of the national economy. Repeated surveys have demonstrated clearly that essential ingredients for a flourishing housing industry are low interest rated and high levels of consumer confidence.

Statistics Canada reported that the nation-wide value of residential building permits had declined 15.6 cent between February 2010 and February this year on the heels of a 5.3 per cent annualized drop in January. When the status of the 2011 federal Budget becomes clear, CHHMA will again be urging the Finance Minister to tangibly recognize the importance of a healthy housing market on the national economy.

ecoENERGY Retrofit Homes Program

In the Budget, the federal government committed $400 million for 2011-2012 to extend the ecoENERGY Retrofit Homes program for one year. The program was set to expire March 31. The program was first announced in 2007 and helps homeowners offset the costs of renovations to make their homes more energy efficient. Further details were to be announced in the near future.

Vince Laberge, president of the Canadian Home Builder’s Association (CHBA), said this program helps bolster the government’s efforts to combat the underground cash economy in home renovation services. “Illegal contracting creates problems for consumers, costs jobs and income, undermines our continuous efforts to build a professional industry and costs governments billions of dollars annually in lost revenue.”

Accelerated Capital Cost Allowance

The Budget proposed that the temporary accelerated depreciation or “capital cost allowance “ (CCA) rate of 50% per year for equipment acquired by a taxpayer primarily for use in Canada for the manufacturing or processing of goods for sale or lease, which had been set to expire after 2011, would be extended for two years, and will apply to eligible machinery and equipment acquired before 2014. Manufacturing and processing equipment acquired after 2013 will be eligible for CCA at a rate of 30% unless the accelerated rate is further extended.

The Budget also proposed to expand the types of clean energy generation equipment which will be eligible for accelerated CCA at an annual rate of 50%. In addition to the types of equipment currently eligible for the current rate, the Budget proposed to extend the 50% CCA rate to equipment acquired after March 22, 2011 which is used by a taxpayer, or the lessee of a taxpayer, to generate electricity using waste heat.

Corporate Taxes

The Budget contained no changes to tax rates but did include promises to keep tax rates down. No changes were proposed to the previously legislated corporate tax reductions, which will generally reduce the combined federal-provincial rate to 25% in most provinces within the next few years.

The ecoENERGY Retrofit Homes program and the accelerated capital cost allowance were broadly supported by all parties, so it is likely that both would be reinstated when the next budget is tabled. With the Conservatives winning a majority, it is expected that the planned corporate income tax cut of 1.5% for January 1 (which will bring the rate to 15%) will go ahead as well. This move would give Canada the lowest corporate tax rate in the G7 and in turn, should help position the country as tax competitive with an attractive investment environment.


MATERIAL HAZARDOUS & SPECIAL WASTE (MHSW) PROGRAM NEWS (APRIL 21, 2011)

Stewardship Ontario would like to remind stewards that Q2 2011 MHSW reports on all nine Phase 1 materials are due by April 30, 2011. The Q2 report includes data from January 1, 2011 to March 31, 2011. Q2 payments are due by May 31, 2011.

Effective August 1, 2011, stewards who fail to report and pay fees by the dates specified in Appendix C of the Rules will be subject to a late-reporting penalty calculated at 10% of the fees due and interest on unpaid fees. Any steward that has been notified of their MHSW Program obligation and has failed to report is subject to a late-reporting penalty. Penalties are retroactive to the original notification date.

If you have questions, please contact Stewardship Ontario by phone at 1-888-288-3360 or by email at werecycle@stewardshipontario.ca.

Stewardship Ontario is developing a new Municipal Hazardous & Special Waste (MHSW) program as requested by the Ontario Minister of the Environment. To help form the new plan, Stewardship Ontario hosted a series of consultation meetings with stewards between February 22 and March 3, 2011. Invitations were sent out via email the week of February 7th to all registered Phase 1 MHSW stewards. The purpose of the meetings was to review draft MHSW material definitions and receive feedback and suggestions from attendees. These meetings also updated stewards on recent Stewardship Ontario activities and the direction that they have received from the Ministry on amending the MHSW program over the last few months.  The sessions were very well attended with over 90 steward companies and associations represented. Interested parties were also encouraged to submit questions and comments during a one week “comment period” following each consultation.

Please visit the links below for:
• Material Definitions resulting from the consultations
• Consultation Q&A resulting from the queries and comments received during the comment period

For further information on the consultation meetings, please contact Ahpy Bokpe at abokpe@stewardshipontario.ca or 416-323-1010, ext. 160.

The MHSW program was developed to collect household hazardous and special wastes and manage these materials to their end-of-life (recycled or safely disposed) in accordance with the Waste Diversion Act, 2002. Phase 1 was implemented in July 2008 with nine materials and Phase 2 and 3 were launched in July 2010; bringing the total number of materials to 22 (known as the Consolidated MHSW program).

Last October, the Ontario government announced that Phase 2 and 3 were being permanently discontinued. This means that when this decision is fully implemented:

Phase 1 – Remains the responsibility of stewards. Stewards will continue to pay fees to support the collection and diversion of these wastes. Stewardship Ontario will continue to pay service providers under current agreements with municipalities.

Phase 2 – The province will provide funding to municipalities to properly manage, recycle and dispose of these materials.

Phase 3 – Municipalities are required to fund the safe management of these materials.

Therefore, stewards will no longer be part of the program for Phase 2 and 3 and will not be required to pay fees.
 
On March 27, the Toronto Star published an article on the $18 million in costs associated with the Ontario government’s decision to cancel Phase 2 and 3 of the MHSW program and the request by Stewardship Ontario to be reimbursed for these costs. The $18 million bill includes a charge of $8 to $10 million for research and development of the program; legal fees; marketing campaigns; and the purchase of a $3 million computer system designed to track an array of household hazardous waste materials through the recycling process. A separate fee of $8.6 million covers the payments that Stewardship Ontario made to the municipalities that collected recycled materials since the cancellation. Environment minister John Wilkinson confirmed that the ministry is auditing Stewardship Ontario’s claim.

As of July 1, 2011, there will be no contractual arrangement for the municipal collection of the nine Phase 1 materials unless a new agreement is reached. Stewardship Ontario is currently drafting a new legal agreement and will provide a copy to all municipalities who wish to participate in Phase 1 MHSW collection sometime in March. Negotiations will then start shortly afterwards.

The Rechargeable Battery Recycling Corporation of Canada (RBRCC), also known as Call2Recycle, recently submitted an Industry Stewardship Plan (ISP) to Waste Diversion Ontario proposing to recycle all household batteries throughout Ontario. If the battery ISP is approved, it is likely that single-use batteries (a Phase 1 MHSW material) will be managed in their entirety by RBRCC.

For further information, contact Tamara Burns, VP Operations MHSW at tburns@stewardshipontario.ca or 416-323-0101 ext.185.


2009 SCHEDULE OF CONTRIBUTIONS APPROVED BY RECYC-QUÉBEC's BOARD OF DIRECTORS (MARCH 21, 2011)

The 2009 Schedule of Contributions continues its progress towards publication in the Gazette officielle du Québec. RECYC-QUÉBEC submitted a favourable analysis to its Board of Directors, who approved the document on March 10, 2011. The 2009 Schedule of Contributions was sent on to the Government of Quebec, which will also have it studied by relevant government officials. Three to four months are usually required for this process before the document is published in the Gazette officielle du Québec and becomes effective. The 2009 filing period is therefore not expected to begin until early summer 2011. We will keep you informed as the issue progresses.

Éco Entreprises Québec (ÉEQ) suggests stewards begin compiling their data on materials generated between January 1 and December 31, 2009. Moreover, if you generate printed matter with recycled content, be sure to check the Schedule of Contributions for thresholds that could earn you a 20% credit. Ask your suppliers for supporting documentation – this information is required to take advantage of the credit.

For further information, go to www.ecoentreprises.qc.ca.


NEW CANADA CONSUMER PRODUCT SAFETY ACT (CCPSA) (March 17, 2011)

As previously advised, Bill C-36, the new Canada Consumer Product Safety Act (CCPSA) became law last December (to read further on the background of this legislation and the role played by the CHHMA, please click here ). Effective June 20, 2011, the CCPSA will introduce new requirements for industry that will help protect Canadians from unsafe consumer products. The CCPSA will cover a wide variety of consumer products including children’s toys and equipment; children’s jewellery; textiles; household products; and sporting goods. Items such as natural health products, food, cosmetics and drugs will not be covered under this new Act.

New key obligations for businesses will include:

Mandatory Reporting
- The Act requires industry to provide information to Health Canada and to the product's supplier (if applicable) concerning consumer product safety incidents or product defects that result, or could reasonably be expected to result, in death or harmful health effects. This "early warning" provision also applies to inadequate labelling or instructions that could lead to the same results, and to recall orders or other corrective measures initiated in other jurisdictions for human health or safety reasons.

Record Retention
- Retailers will be required to keep records that provide enough details to know which suppliers they purchased products from and also where and when (but not to whom) products were sold.

- Other suppliers who manufacture, import, advertise, sell or test consumer products will be required to keep records to indicate from whom they obtained the product and the businesses to whom they sold it.

These records would be kept by businesses as part of any regular bookkeeping practices and will help to trace products throughout the supply chain should the need arise.

Information on Product Safety: Health Canada can require manufacturers or importers to provide or obtain safety information - including studies or tests - that indicate whether a consumer product meets the requirements of the CCPSA.

General Prohibition: Under the Act, there are prohibitions related to the manufacture, importation, sale or advertisement of consumer products that could pose an unreasonable danger to the health or safety of Canadians.

Packaging and Labelling: Under the CCPSA there are prohibitions related to the packaging, labelling or advertisement of a consumer product in a manner that is false, misleading or deceptive in respect of its safety.

The CHHMA, along with the other eleven associations that make up the Canadian Consumer Product Safety Coalition, continues to work with Health Canada to refine the language around the regulations that support this new legislation.

Several key aspects and definitions require further clarification e.g. whether incidents are to be reported if they occur in a commercial environment, whether reporting deadlines should include business days only, what does “importer of record” actually mean. In addition, the Coalition has raised questions over key parts of the new regulations such as dealing with recalls from other countries (different standards), determining when an “incident” has occurred and further explanation on investigation and reporting procedures. The Coalition has also expressed concerns to Health Canada over issues relating to the release of confidential business information (CBI).

We will keep you updated in further reports on the progress of this legislation and what it means to your business. You can also sign up for CCPSA updates and learn more about the new requirements of the Act, by visiting: http://www.HealthCanada.gc.ca/ProductSafety.

If you haven’t already, your company should designate a person to be responsible for keeping on top of the CCPSA obligations and reporting.
 


CESA FEES FINALIZED FOR BC PORTABLE APPLIANCE AND FLOOR CARE RECYCLING PROGRAM (FEB 9, 2011)

No further update.  Click here to see the previous article.


BC RECYCLING REGULATION PHASE 4 (2012 ELECTRICAL AND ELECTRONIC PRODUCTS INCLUDING: POWER TOOLS, SNOW BLOWERS, MOWERS AND OTHER GARDENING TOOLS) (JAN 21, 2011)

No further update. Click here to see the previous article.

 

BC PORTABLE AND FLOOR CARE APPLIANCE STEWARDSHIP PROGRAM TO COMMENCE APRIL 1, 2011 (JAN 21, 2011) 

No further update. Click here to see the previous article.

 
Canadian Hardware & Housewares Manufacturers Association | 1335 Morningside Ave., Suite 101, Scarborough, ON M1B 5M4
Telephone: (416) 282-0022   Email: pwinter@chhma.ca