Over the past two decades, federal and provincial lawmakers have implemented extended producer responsibility (EPR) programs covering a growing range of products such as plastic and paper packaging, batteries, electronic equipment, paints, pesticide containers, pharmaceuticals, used oil and used tires. This trend does not appear to be slowing down. If anything, it is accelerating as governments incentivize sustainable product design with the goal of creating a circular economy. In this Blakes bulletin, we discuss the EPR landscape in Canada and how recent developments impact Canadian businesses.
What Is Extended Producer Responsibility?
EPR is a policy approach that extends a producer’s responsibility for a product to the post-consumer stage of the product’s life cycle. It shifts financial and physical responsibility for the collection of end-of-life products, including their packaging, and their recycling, reuse or proper disposal from provincial and municipal governments to brand owners, manufacturers, importers or retailers of such products. The idea behind EPR programs is that by requiring producers to bear the cost of managing their products at end of life and by mandating certain material recovery targets, producers are incentivized to use more sustainable materials that are easier and cheaper to recover and reuse than lower-grade, harder-to-recycle materials.
Which Canadian Jurisdictions Have EPR Regimes?
All provinces and territories, except Nunavut, have a mandatory EPR program in place. Because EPR programs predominantly exist at the provincial and territorial level, producers face the daunting prospect of determining their compliance obligations under EPR programs that differ, sometimes materially, between jurisdictions. In many jurisdictions, EPR legislation is directed at packaging, paper products, single-use plastics and a growing range of other products, including batteries, tires, electric and electronic products, paint, pharmaceutical products, hazardous products, and oil.
In addition to the provincial EPR programs, the Government of Canada requires companies that manufacture, import or place plastic, resins and plastic products on the Canadian market to report to the newly created Federal Plastics Registry (Registry). The reporting obligations associated with the Registry are to be introduced in phases, with Phase 1 currently underway. Phase 1 reporting obligations apply to producers of plastic packaging, electronic and electrical equipment, and single-use and disposable products destined for the residential waste stream, with reports due September 29, 2025. Additional requirements will be phased in between 2026 and 2027, covering more product categories and waste streams. For example, generators of 1,000 kg or more of packaging and plastic waste at industrial, commercial and institutional premises must report to the Registry starting in 2026. Please see our previous bulletins on the Registry for more information: Canada Publishes Notice for the Reporting of Plastic and Canada Publishes Phase 1 Guidance for the Reporting of Plastics.
How Do the EPR Regimes Apply to Businesses?
Determining Who Is the Responsible Producer
EPR frameworks typically use a producer hierarchy to determine who is responsible for each category of product. Generally, brand holders or owners who are resident in Canada or the applicable province or territory are placed at the top of the hierarchy, and compliance obligations rest with them. If there is no resident brand holder or owner, compliance obligations fall to the importer of the product, with a supplier or retailer being the last responsible entity should there be no resident brand holder or importer. There are variations between jurisdictions and product categories regarding who is deemed the responsible producer, meaning that businesses need to consult each applicable piece of EPR legislation in all the jurisdictions in which they operate to determine their compliance obligations.
Some EPR regimes create exemptions for “small producers” (or similar terminology). These exemptions are generally based on corporate revenue or the quantity of material supplied into the jurisdiction in a year.
Producer Obligations
The obligations of responsible producers vary between jurisdictions but generally include registration, fee payment, reporting and record-keeping obligations. Most importantly, organizations are often required to submit plans outlining their approach to recovery of the captured product or subscribe to an EPR plan or program offered by a producer responsibility organization (PRO), which in some instances must be approved by the regulator. In some jurisdictions, organizations are also permitted to delegate their EPR compliance obligations to a PRO that establishes and operates waste management systems on their behalf. PROs can also report and carry out mandatory public education initiatives for producers. Ultimately, however, individual producers remain responsible for compliance with EPR legislation.
With the transition to full EPR programs proceeding rapidly and plans in many jurisdictions to expand producer responsibility to additional product categories and waste streams, businesses should evaluate whether they are “obligated producers” in any of the Canadian jurisdictions in which they operate and, if so, whether they are in compliance with all EPR requirements. Given the differing approaches across Canada and the wide range of products captured in some regimes but not others, Canadian businesses should bear in mind that just because one regime applies or does not apply in one province or territory does not mean the same is true in another Canadian jurisdiction.
Penalties for Non-Compliance
Compliance with EPR requirements is more important than ever, as new EPR legislation with more stringent penalties come into force and existing EPR regimes mature, leading to more aggressive enforcement by regulators. Penalties for non-compliance can be significant. For instance, under Ontario’s regime, non-compliance with the Resource Recovery and Circular Economy Act, 2016 and its EPR regulations can result in a fine of C$250,000 per day on which the offence occurs or continues for a first-time offender, and C$500,000 per day on which the offence occurs or continues for subsequent offences. Officers, directors, employees and agents of a corporation that authorize, assent to, acquiesce in or fail to take all reasonable care to prevent the commission of the offence by the corporation may also be prosecuted and can face fines of C$50,000 per day for a first offence or C$100,000 per day for a subsequent offence.
Additionally, Ontario’s Resource Productivity and Recovery Authority (RPRA), which enforces the province’s EPR regimes, has the power to issue compliance orders and administrative monetary penalties (AMPs), all of which are publicly disclosed. The frequency with which the RPRA has issued compliance orders and imposed AMPs has increased in the last two years, indicating a more concerted effort to crack down on non-compliance following an initial “grace period” as new EPR legislation transitioned into force. To date, the RPRA has issued over 20 compliance orders and six AMPs related to products under the various EPR regimes, including blue box materials (paper, plastic, glass and metal items), batteries, electrical and electronic equipment, and tires. The AMPs issued by the RPRA have ranged from C$75,000 to C$1-million, with an average penalty amount of approximately C$545,000.
For more information on how the Canadian EPR requirements may impact your business, please contact the authors or any member of our Environmental group.
