New Electronics Tax Won’t Help Recycling

The McGuinty government has been trying to sneak through another new tax under the noses of unsuspecting Ontario consumers. The government ordered Waste Diversion Ontario to create a plan to deal with electronics waste starting with computers, printers, monitors and fax machines. The plan creates a new unelected and unaccountable organization - Ontario Electronic Stewardship - to set the new tax rates to be imposed on manufacturers and assemblers. When the companies mark up the tax and pass it along starting early in 2009, consumers will be on the hook for over $104 million in new costs for a tax that will do little to increase recycling.

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Recycling is a great idea, but this tax proposal is wrong-headed for many reasons. It won't work because it provides no incentives to recycle, such as successful rebate programs used for liquor returns. It is hidden and unaccountable. It will increase consumer costs. It will destroy a growing industry. There is a far less costly and more sensible alternative, namely a deposit-return program. Most recycling programs provide a deposit-return rebate at end use. One has an incentive to bring back empty bottles because one will get back a few bucks. A program like that would be both sensible and supportable. But this program does not do that. It charges a recycling fee on the front end but provides no incentive to return electronic items by returning that fee. Instead, in bureaucratic fashion, the government expects brochures and other advertising to create that incentive. Imagine what the sides of our roadways would look like if we applied the same policy to pop bottles and beer cans! Ontarions may be unaware but there already exists a thriving recycling and reuse industry in Ontario with a capacity of 170,000 tonnes per year; almost double the required program capacity of 90,000 tonnes per year. With this much existing excess capacity, a government-run program is not only redundant, but threatens the viability of successful tax-paying industry. This proposal amounts to nothing more than a new tax on electronic items. Phase 1, alone, of this new tax will drain between $104 and $209 million a year out of the pockets of consumers in Ontario; $62 million going to government and the rest to electronics companies. To avoid the tax, consumers will move purchases out of province hurting Ontario businesses even more than they already hurt. Ontario consumers need to beware: there are three more phases of new taxes to follow, as well! These new consumer costs address neither the growth of Phase 1 costs, nor the economic impacts of Phases 2, 3, and 4 which would encompass copiers; Personal Digital Assistants (PDAs); scanners; telephones; cell phones; and all other audio equipment including stereos, speakers, MP3 players, IPods, DVD players, etc. These new tax rates have not yet been established. While campaigning last June in advance of the last fall's provincial election, Premier Dalton McGuinty unambiguously promised not to raise the taxes of Ontarions. Phase 1 of the WEEE Program Plan breaks that promise with the imposition of a new tax on electronics under the guise of a recycling program. Given his track record on tax promises, Ontarions shouldn't be too surprised. With this program the Ontario government is stepping in the way of current natural progress on the reduction of electronic waste in land-fills. Without a rebate program and by hiding taxes they will do little to help the environment but much to increase the genuine perception that environmental protection amounts to little more than tax grabs and increased costs.

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