Toronto

Canadian Tire drops 'botched' eco fees

Canadian Tire says it won't charge customers Ontario's controversial eco fees, because the program is too complex and was mishandled by both the government and retailers.

Program 'isn't built to be intuitive,' retail chain says

Canadian Tire customers won't be charged Ontario's controversial eco fees starting Tuesday, largely because the program is too complex and was mishandled by both the government and retailers, the retail chain announced Monday.

The fees, mired in confusion since retailers started charging them on thousands of additional items July 1, were the victim of a "botched" rollout and were "poorly handled" by everyone involved, said Mike Arnett, president of Canadian Tire Retail.

"We just think that the whole program that was rolled out on the first of July this year was not well managed by anyone, really, and that it's caused a great deal of confusion for our customers," he said in an interview.

"We're being asked questions that we don't have good answers to, and we really think the program needs to be reworked."

The fees are supposed to be collected by manufacturers and retailers to help fund a recycling program that diverts potentially hazardous items, such as fire extinguishers, household cleaners and paint, from landfills.

They were first introduced in 2008 but were applied to thousands of new items at the start of this month — without advance notice to the public.

Stewardship Ontario, an industry-led organization that oversees the program, collects the fees from retailers and manufacturers. They, in turn, determine the fees that they pass on to consumers.

The fee can be embedded in a product's sticker price, which means that in some cases shoppers won't know whether or how much they're being charged.

'We don't have good answers': Canadian Tire

Waste Diversion Ontario, the government agency that oversees the environmental fee program, set up a very complicated structure for charging eco fees and left much of the interpretation up to retailers, said Arnett in a news release.

Two similar brands of cleaning products could have two different eco fees, depending on slight variations in their ingredients, for example.

"Even more confusing, the 'interpretation' of these fees is left up to each retailer — meaning that five different retailers may charge five different eco fees for the exact same product — all depending on how they interpret the very complicated fee structure," he wrote.

Arnett acknowledged that Canadian Tire, which apologized last week for overcharging some customers, didn't do a good job of implementing the fees, largely because of their complexity.

"Although we quickly fixed any incorrect fees, we still have customers every day asking us why two nearly identical products have different fees," he wrote. "We don't have good answers —because the program itself isn't built to be intuitive for either customers or retailers."

Canadian Tire won't pass along any eco fees to customers until "we can sort out a better system with Stewardship Ontario and the government of Ontario," he said.

Ombudsman investigating

Some customers have been scratching their heads about why certain items are subject to the levy, such as fishbowls, grass seed, kids' bath toys and environmentally friendly products that use natural ingredients.

Ontario's outspoken ombudsman, Andre Marin, is also looking into complaints about the fees after the New Democrats asked him to intervene.

Conservative Leader Tim Hudak said Canadian Tire's decision provides further evidence that Premier Dalton McGuinty's "eco tax grab" —  which hit consumers the same day the new 13 per cent harmonized sales tax kicked in — has created chaos at the cash register.

"Clearly, since this eco tax was brought in hidden behind the HST back on Canada Day, it has been an absolute disaster and a tax increase Ontario families cannot afford," Hudak said.

Environment Minister John Gerretsen belatedly jumped into the fray last week, firing off a scolding letter to Stewardship Ontario demanding that they take "quick action" to stop customers from being overcharged.

He also mused in an interview about making legislative changes that would allow the government to exert more control over the organization.

Stewardship Ontario wrote back two days later, saying it has no authority to interfere in how retailers and manufacturers pass on the eco fees to consumers.

"In the meantime, I would respectfully ask that the parties refrain from any finger-pointing or accusations, especially in the media," CEO Gemma Zecchini said in her July 15 letter to Gerretsen.

"Stewardship Ontario has an important program to operate that requires consumer support if it is to meet its objectives and targets. Tarnishing the reputation of Stewardship Ontario for problems not of its making and outside of its power to remedy is unfair and undermines the objectives of waste diversion in this province."

Zecchini's letter was obtained by the Opposition Conservatives, who passed it out Monday to reporters.

Canadian Tire's decision to stop passing along the fees to its customers should be applauded, but McGuinty should never have allowed the industry to effectively regulate itself on the program, NDP Leader Andrea Horwath said.

"The McGuinty government dropped the ball," she said. "It's now up to the government to pick up the pieces and ensure the companies that profit off this waste should be responsible for getting rid of it — not their customers."