Consultations on the 2022 Schedule of Contributions: You have questions, we have answers!
The consultation period on the 2022 SoC is officially closed.
Éco Entreprises Québec thanks contributing companies for participating in the consultation process for the 2022 Schedule of Contributions, hosted on February 22nd by Isabelle Laflèche, Director, Company Services and Mathieu Guillemette, Principal Director, Modernization of curbside recycling and Fee structure.
In all, 184 participants had an opportunity to hear about the highlights, conditions submitted under the Draft 2022 Schedule of Contributions and ask any questions they had.
Couldn’t make it? Access the documentation regarding the consultations in the Schedules of Contributions and Consultation section of our website.
- Executive summary of the consultations: At a glance, view a summary of the conditions submitted for the 2022 draft Schedule of Contributions
- Contribution table calculations (project): Download a document presenting the detailed calculations in the 2022 contribution table
- PowerPoint presentation of the Consultations and consultations document: View the contents or check out details on the highlights
- Video recording of the consultations: Listen to the consultation and hear all answers to questions asked by company representatives.
- Draft 2022 Schedule of Contributions: View the application rules and contribution table.
Top 10 questions submitted by contributing companies
1.When does the Schedule of Contributions take effect and what will the payment schedule be?
The virtual meeting of February 22nd is part of a two-week consultation process from the time documents are posted on ÉEQ’s website (February 15 to March 1). Companies have until March 1st to reply to the questionnaire sent after the February 22nd consultation and send their comments to ÉEQ.
ÉEQ will submit the Draft Schedule of Contributions and report on the consultation with companies to its board of directors on March 18th, and then to RECYC-QUÉBEC, as required under article 11.1.1 of ÉEQ’s certification agreement.
The Schedule of Contributions will then be submitted to the government of Quebec for analysis and recommendation of adoption. Once the Schedule of Contributions is published in the Gazette Officielle du Québec, ÉEQ will notify contributing companies, who may then access the schedule of obligations.
2.What explains the increase of total costs and how will it impact companies?
For the 2022 Schedule, the anticipated 6.5% of net municipal costs is lower than that of recent years. However, abolishing cost allocation by material class ahead of the formula increases the share of net costs assumed by ÉEQ, as the share of newsprint goes from 6.5% in the 2021 Schedule to 2.0% in the 2022 Schedule, which has an upward impact of $9.2 million for ÉEQ. Adding ÉEQ fees and other allocations ($13.3 million, up $2.1 million from the 2021 Schedule) and replenishing the Risk Fund ($6.2 million) increases total costs before allocations to $239.4 million, an increase of 15.0% over the previous year.
Two-thirds of companies will see an increase of less than 15%, which was the average increase for last year’s Schedule. One out of 9 companies will see a drop in their contribution for 2022, whereas one third of companies will see an increase of more than 15% with the 2022 Schedule.
3.What legislation will influence these changes?
The Environment Quality Act was first amended in March 2021 through Bill 65, requiring the production of a single Schedule of Contributions by the two organizations certified under the compensation plan:
- ÉEQ, for Containers, Packaging and Printed matter, and
- RecycleMédias, for Newspapers.
This means that a more thorough update of the Schedule rules must be carried out.
Additionally, the Draft amendment to the Regulation respecting compensation for municipal services provided to recover and reclaim residual materials was published last December 8th. The consultation process has been completed, but the Draft has not yet been adopted. The Draft Regulation confirms the abolition of cost allocation by materials class ahead of the formula, which has a significant impact on material rates.
4.Why was the cost allocation by materials class abolished?
Before this measure was in place, costs were set by regulation and reviewed only every two or three years. Indeed, from one year to another, rates did not reflect the reality on the field. This abolition, which ÉEQ had been calling for for several years, will mean that the formula calculating cost allocation directly can be maintained, while making the process more agile and more aligned with reality.
5.Is activity-based costing (ABC) a theoretical study?
No. It reflects the actual costs of the curbside recycling system.
6.If the fee increase for HDPE should peak at 50%, how would the rest of the costs owed be covered?
Each class of materials has its own cost ceiling calculation. Residual costs are therefore distributed or allocated across other materials within a same category. In that specific case, this case, the amount is allocated between other containers and packaging; the rate increase for other containers and packaging is less than 1%.
7.Is the sorting process for coloured HDPE containers different from the process for black HDPE containers and, if so, what impact does that have on recycling costs?
Yes. The number of coloured packaging is increasing, and that poses challenges for the current system. Although coloured HDPE containers may be correctly sorted, they have no suitable outlet on the market. Most recyclers don’t want them. ÉEQ will address this matter with the eco-modulation of its Schedule of Contributions so that associated costs reflect the reality on the field.
8.What about liability for online sales sites and online marketplaces?
Whenever a product ordered on the internet transits through an online sales site that handles getting that product to the consumer:
- The manufacturer will be responsible for reporting the primary packaging, which is the one protecting the product.
- The online sales site will be responsible for reporting the shipping packaging.
For marketplaces that handle only the transaction between a manufacturer and the end-user or consumer, but not the shipping, the manufacturer will be responsible for all of the packaging.
9.We are a manufacturer that ships directly to our distribution centres, not to the end-user or consumer. Are we exempt from contributing?
If you only have a shipping packaging designed specifically to ship products to your distribution centre, and that packaging is never sent to consumers, then, it is indeed exempt from the contribution obligation.
10.Does the contribution exemption for the minimum threshold quantity of CP & PM placed on the market remain the same?
Yes. There are three exemption categories:
- A- You produce less than one metric tonne of materials per year.
- B- Your annual revenues are under one million dollars.
- C- You are a retailer and only have one point of sales of less than 10,000 square feet in area.
You must still register your company on the reporting portal and confirm your payment exemption in the reporting system for every Schedule of Contributions!