Hidden consumer fees created to finance new bottle refund program

A new bottle return system developed by beverage companies, and adopted by the New Brunswick government, willpay consumers an estimated $18 million more in enhanced refunds on returned empties this year. But that will be financed, in part, by$11 million in hidden fees likely to be imposed on those same consumers

In addition, another $12 million per year the province has been using for communityenvironmentalprojects is being diverted into the industry-run program.

New Brunswick Environment Minister Gary Crossman has called the new bottle return system a "good-news story" but he acknowledges the new fees imposed on consumers will erode some of the benefit of larger refunds.

He also says his department has not figured out how it will resupply $12-million per year in funding to New Brunswick's environmentaltrust fund, now that the bottledepositmoney that used to feedit has been fully redirected to the company managing bottle returns.

"No fees from the beverage containers program will be remitted to the environmental trust fund under the new model for managing empty beveragecontainers," Crossman said during a legislature committeehearing that looked at the changes in November.

"The accumulated surplus of the environmental trust fund will be sufficient to continue investing in priority projects at the current level, as other revenue streams are evaluated."

WATCH | The CBC's Robert Jones breaks down the new fees:

New fees erode the value of N.B.'s bigger bottle refunds

7 months ago

Duration 1:02

Bottle refunds doubled in New Brunswick on April 1. But new hidden fees imposed on consumers by the beverage industry are clawing back some of that new bounty.

Since 1992, New Brunswick consumers have been required to pay 10-cent deposits 20in the case of wine and liquor bottles when buying packaged beverages, to encourage recycling.

Those deposits were eligiblefor a 50-per-cent refund whenthe containerwas returned to a recycling depot, with the other 50 per cent split equally between paying program expenses and financing the province's environmentaltrust fund.

But, beginning last week, the refund increased to 100 per cent of the deposit paid.

That changewas orchestrated by Encorp Atlantic, a not-for-profit organizationcreated by the beverage industrythat manages bottle returns in New Brunswick.

It has been promoting the new system to the public by emphasizing thatrefund amounts paid to those who return beverage containers have doubled.

"Good news for New Brunswickers, beverage containers are fully refundable starting April 1, 2024," said Encorp in a new release it issued last month announcing the change.

"More money is now going back to consumers than ever before."

However, to help finance those larger refunds,Encorp is being allowed by the province to charge a patchwork of new container recycling feesthat for consumers will reduce part, and in some cases all, of the value of the enhanced refund.

Encorp president Pierre Landrywould not agree to an interview about the new charges to consumers, which Encorp is permitted by the province to set on its own.

Hesaid, via text messages, that the fees are a complex issue that are not easy for the public to grasp.

"This transition has been very challenging," Landry said, in declining an interview request.

"As much as I would like to focus on environmental performance and consumer access and convenience, I do not have any further comments."

The single largest category of recyclable containers subject to a 10-cent deposit in New Brunswick is the plastic drink bottle, mostly used for water and soft drinks.

An estimated 154 million will be sold in New Brunswick this year and although the refund on thosewill increase by fivecents, a three-cent recycling fee has been established by Encorp on those containers.In most cases it is payable by the consumer when the drink is purchased and reduces the benefit of the enhanced refund by more than half.

The effect is different on different types of containers.

On aluminum soft drink cans, the fee has been set at onecent.On aluminum beer cans, it is twocents.

However, on steel juice cans the recycling fee has been set at eightcents, three cents more than the increased refund on those containers.

Similarly, wine and liquor bottles which carry a deposit of 20 cents, will see refunds increase by 10 cents not enough to cover their new recycling fee of 11 cents.

That makes the new fees nearly invisible in New Brunswick and difficult to track for interested consumers.

In British Columbia, where the industry body Encorp Pacific runs a nearly identical program, retailers are encouraged to show container recycling fees on retailreceipts for the sake of transparency, according to the Recycling Council of British Columbia.

On its website,the council says Encorp Pacific "has encouraged retailers to show this fee as a separateitem on your till receipt," much the way bottle deposit charges are itemized.

That's not the case in New Brunswick.

In materials explaining to retailers how the new system works here, Encorp Atlantic warns that the provincial government is forbidding retailers by regulation from disclosing any information to consumers about the new fee onreceipts.

"While the presence of a [container recycling fee]can be communicated to the public, [it]cannot be presented by retailers as a separate line item that is part of the point-of-sale calculation on consumer receipts," retail store owners were told in a written directive on the issue.

In an emailed statement, New Brunswick's Environment Department said it is standing government policy that recycling costs charged to New Brunswick consumers on a variety of products, such aspaint, oil, electronics and other products, not be shown on a customer receipt and the new bottle charges are the same.

"However, producers or retailers can inform the public of a recycling fee on producer websites, flyers, or shelving signage so there is visibility/transparency," said the statement.

Added to the murkiness for consumers is the fact Encorp says the container recycling fee charges are being levied on beverage companies and will be passed along to consumers as companies see fit.

New Brunswick's largest beverage retailer, N.B. Liquor, has said it is passing these costs onto consumers, but Encorp says it does not know if that practice will be universal.

"Brand owners may, at their sole discretion, decide to absorb these costs, or pass them on to retailers," Encorp states in materials explaining the new charge.

"Likewise, retailers may choose to absorb these costs, orpass on these costs to consumers."

In the changes, oversight for the bottle return program has been transferred from the New Brunswick Environment Department to the Crown corporation Recycle N.B.

However,last weekRecycle N.B. said any questions about the new program and the new charges would have to be answered by Encorp.

Under thenew program,Encorp can raise the container recycling feeit charges on 90-days' noticeand, in an emailed statement, Recycle N.B. CEO Frank LeBlanc said his body has no authority over those issues.

"Encorp is not required to notify Recycle N.B. when [container recycling fee]charges are set or being adjusted, either as an increase or a decrease," said LeBlanc in the statement.

He said Recycle N.B."does not review or approve"the container recycling fee.

Environmental groups are already expressing some nervousness about the decision to divert revenues away from the province's environmental trust fund to Encorp without a definitive plan in place to replace them.

A collection of three groups in southern New Brunswick issued a joint statementFriday asking for"consultation and dialogue" with the province about its plans to replenish the trustfund.

"We look forward to that consultation happening so that we can continue to support local environmental and community actions," read the statementfrom the PetitcodiacWatershedAlliance, Eastern Charlotte Waterways and ACAP Saint John.

A request to interview Environment Minister Gary Crossman about the changes was acknowledged by the department but not granted.

In a statement, thedepartment said it understands the importance of the province's environmentaltrust fund to community groups that are supported by it, but a new method of financing the fund has not been settled on.