What is the Fee Setting Methodology Project?

Canadian Stewardship Services Alliance (CSSA) has initiated a project to identify options to change the way steward material fee rates are calculated.  Calculating steward material fees is undertaken by CSSA on behalf of the Boards of Directors and therefore, the stewards, of Multi-Material British Columbia (MMBC), Multi-Material Stewardship Western (MMSW), Multi-Material Stewardship Manitoba (MMSM), and Stewardship Ontario (SO).  In doing so, CSSA works to harmonize the fee setting for these packaging and printed paper (PPP) programs. 

Over 85% of the material fees paid to these four programs are paid by stewards who contribute to all four programs.   For these stewards, the methodology used for setting fees is a critical element of CSSA's strategy to harmonize the administration of PPP programs.   That said, all stewards want to understand the methodology for calculating fees, want to be able to explain this methodology to their internal stakeholders and want to feel confident that the fees they pay reflect their reasonable share of the costs to manage their materials.

With four unique PPP programs to draw experience from, CSSA has initiated the Fee Setting Methodology Project to address the existing and emerging challenges with the methodology used today to calculate fees and to seek approaches that enable the harmonization of the fee setting methodology while respecting the unique characteristics of the provincial regulations and waste management reverse supply chain designs.

How are stewards engaged in the project?

Stewards that represent a broad spectrum of steward business sectors were invited to form a Steward Consultation Committee (SCC). The SCC consists of 20 dedicated steward representatives from a broad cross-section of manufacturing, retail and quick service food sectors.  See below for a full list of SCC members.

Co-chaired by PepsiCo Beverages' Neil Antymis, and Scott Tudor from Sobeys, the SCC's objective is to develop fee methodology options for consideration by all stakeholders that:

1. Can be harmonized across the country
2. Are explicitly linked to the costs that are measureable in the supply chain and drive cost differentiation amongst the materials that are managed
3. Are easier to understand and explain to others
4. Fairly allocates recycling system costs (collection and processing)

The development of the fee setting process is being facilitated through a series of six workshops conducted with members of the SCC from May through September.  (While six are planned, more will be added if necessary to ensure the SCC is able to engage in a thorough review of all the issues and options.)  The workshops are iterative in nature, each building on work of the previous sessions to an ultimate outcome - methodology options to be presented to the steward community. 

When will stewards be able to review and provide feedback on the methodology options?

We expect that the fee methodology options, each accompanied by a business case, will be presented to stewards at the Annual Steward Meeting in October for review and feedback. However, if the SCC members need more time to review options and finish the process, then presentation of options to the wider stakeholder group will be presented at a later date.

The objective is to have a new fee setting methodology available for the 2017 fee setting cycle. (2016 fees will be calculated using the current methodology.)

What progress has the SCC made to date?

The SCC has completed its first two (of six) workshops. Workshop #1 was dedicated to establishing a common understanding amongst all participants on the purpose and desired outcomes of the Fee Review project and undertaking a comprehensive review of the current methodology and its inherent challenges. The SCC also reviewed the reasons why it is time to update the fee mechanism.

Workshop #2 focused on the principles that underpin the current fee setting methodology, and which are common to all four of CSSA's PPP programs as articulated in legislation and/or program plans.  SCC members were asked to validate/challenge the current principles to determine if they will remain sound in the future as the EPR landscape continues to evolve. 

The current common principles for PPP fee setting are as follows:

• Encourage reduction, redesign and recyclability
• Reflect the costs to manage the material
• Recognize the benefits to all stewards from the high performance of certain materials
• Equitably share program management costs.

Deciding on the correct set of principles is still a work in progress by the committee, but their objective is to align on a core set of principles that will stand the test of time.

What's Next?

The Steward Consultation Committee is looking forward to Workshop Three in early July when members will hear presentations from various stakeholder groups that have expressed an interest in sharing their views on the methodology with the committee.    

CSSA is committed to communicating with stakeholders on the Fee Methodology Project on an ongoing basis. Please stay tuned for the next Fee Methodology Update later this summer. 

We welcome your input and ideas.  If you have feedback on this newsletter or any other aspects of the fee methodology project, please contact [email protected].    

Steward Consultation Committee