The changing face of user-pay programs in Canada
By: Janet Robins & Maria Kelleher
Solid Waste Magazine – 2005-08-01
Despite the diminishing availability of landfill space in many places in Canada, residential waste generation continues to rise. For instance, according to Statistics Canada’s Waste Management Industry Survey (2004), on a per capita basis Ontario waste generation increased slightly from 359 to 363 kilograms per household per year between 2000 and 2002. User-pay systems may be the antidote to this upward trend.
User pay, also referred to as variable rate pricing, pay-as-you-throw (PAYT), unit pricing and sometimes simply “bag tags,” comes in a variety of forms. A full user-pay program requires the homeowner to pay for every bag or can of garbage set at the curb. Partial user-pay programs require homeowners to pay only for a portion. Usually between one and three bags are “free” before tags or stickers are required.
In 2001, RIS International Ltd. completed a study for the City of Toronto that examined both full and partial user-pay programs in 15 communities and concluded that they have a significant initial impact and then, over time, achieve higher recycling rates and greater diversion from landfill. In those cases where the results plateaued or tapered off slightly, the culprit appeared to be that the number of “free” bags remained constant (i.e., was not further reduced). Simply put, the lower the number of “free” bags, the greater the increase in waste diversion.
In a recent update of the 2001 study, developments were observed.
The City of Stratford experienced a tapering off from its initial 25 per cent waste diversion, because of different unit pricing for waste at the curb versus waste at the landfill. When Stratford introduced full user pay in 1997, it charged $1.20 per bag at the curb but only 50 cents at the landfill. Consequently, self-haulage of residential waste to landfill soared by 160 per cent. The average vehicle discarded 2.1 bags, compared with one bag per household placed at the curb. Recycling rates remained constant, but the initial reduction in waste sent to landfill dissipated. Eventually, comparable user fees were introduced at the curb and landfill to eliminate the disparity. Between 2001 and 2004 the city increased the price of the bag at the curb from $1.20 to $1.75, and raised the landfill fee from 50 cents to $1.65 per bag. Self-hauls to the landfill have decreased to levels close to those recorded at the beginning of the program.
Other Ontario communities, including the County of Wellington and the City of Barrie, have had similar experiences when their user fees differed between garbage set at the curb and taken to the landfill.
Ontario program growth
In 1996 there were about 59 user pay-programs in Ontario. (All were implemented between 1991 and 1996.) By 2001, the number had more than doubled to 120 communities. Today, an estimated 152 Ontario communities have implemented user pay. The number is based on Waste Diversion Ontario’s 2003 Data Call which identifies 92 communities with user-pay, including 18 programs in Bluewater, 12 municipalities in Niagara Region, five municipalities in Quinte Waste Solutions, 16 in Simcoe County and three in both Peel York Region (plus three others not identified in the Data Call: Sudbury, North Glengarry and Muskoka).
Approximately a third (34 per cent) of the communities have full user pay and just over half (52 per cent) have a partial program (with a limit of between one and three “free” bags). The remaining 14 per cent have variations on the partial user-pay program.
Other noteworthy facts about Ontario Programs:
* The largest community to adopt partial user pay is the Region of Peel (population one million) which introduced a three-bag partial user-pay program in 2001.
* The largest community to adopt a full user-pay program is the County of Oxford (population 100,000) which introduced full user pay in 2003.
* The Town of Gananoque (population 5,000) became one of the very first user-pay programs, introduced in Ontario in 1991.
* The Town of Georgina (population 40,000) was the first municipality in the Greater Toronto Area to implement a full user-pay program, in 1997.
Until recently, most of the user-pay programs introduced in the 1990s in Ontario occurred in communities with 25,000 residents or less. There was some doubt that the approach could succeed in larger centres. The trend changed when some larger municipalities such as Barrie, Stratford, Niagara Region, Northumberland and Georgina moved forward. Today, a number of large municipalities have introduced at least partial user pay (with the majority permitting the first three bags “free” before requiring the resident to purchase tags for additional bags). These communities include Sudbury, Thunder Bay, and Markham, plus the Regions of Peel, Durham, and York. Only the City of Kingston, Niagara Region and Simcoe County have a partial two-bag user-pay program.
The City of Toronto continues to struggle with the user-pay concept, and recent efforts to introduce a partial program have met with great resistance. Currently, Toronto residents are permitted to place up to six bags at the curb, every other week. In December 2004, a proposal was submitted to the works committee recommending a fee of $1.50 for every bag beyond the first two bags on each pickup. The works committee rejected the proposal. (One councilor denounced the earlier plan as a “head tax” on large families.) A new proposal submitted in June of this year recommended a partial user-pay system that would permit four “free” bags before requiring a $1.00/bag sticker. While the partial user-pay program was accepted by the works committee, it softened the proposal: the new plan calls for a limit of five bags by April 1, 2006 and four bags by April 1, 2007.
However, Toronto is planning an extremely innovative approach to user pay in its multi-family buildings, and will be the first city in North America to do so. Stay tuned for developments.
Western Canada
Over the past couple of years, Winnipeg has examined user pay for garbage as a method to help it stabilize its property taxes. In 2004, the city tabled a balanced 2004 preliminary operating budget with no tax increase, which included the proposal for a new user-pay garbage fee. The mayor at the time was a strong proponent of user pay for garbage and promoted it as a method to support environmental stewardship. However, lack of public support for the idea and the stepping down of the mayor resulted in the quiet death of the proposal.
Since introducing user pay in 1992, the Capital Regional District (CRD) in British Columbia has seen a gradual reduction in residential garbage sent to landfill and a steady increase in waste diversion rates. Since 1992, solid waste landfilled declined by 15 per cent (by 2003) and waste diversion has increased from 15 per cent in 1991 (prior to the introduction of user pay) to 38 per cent in 1993.
St. Albert, Alberta offers a combined bag/tag and variable container system as part of its user-pay program. This was the first community in Canada to implement a variable container system. Introduced in 1996, St. Albert experienced a 38 per cent reduction in waste going to landfill (2000) and a 50 per cent increase in recycling (2000).
The City of Vancouver is the first large city in Canada to implement a variable can subscription system. Garbage, recycling and yard trimmings programs are funded by solid waste utility fees that are included as a separate item on property owner’s tax notices mailed out in June each year. For 2005, the basic garbage service fee was $28 per property plus $32 for each can; the basic recycling fee was $10 per collection point plus $9 per dwelling (a single family home is charged $19 whereas a duplex is charged $28). All buildings are charged a flat fee of $38 for yard waste.
For a typical single family household the total fee for garbage, recycling and yard trimmings collection is $149, made up of:
* Garbage (2 cans) $92
* Recycling $19
* Yard trimmings $38
Between September and December, 2005 the city will be delivering new carts to residents so that both garbage and yard trimmings can be collected by an automated collection truck using a mechanical arm. Residents now need to decide what size of container they will choose for both garbage and yard trimmings service; the annual fee charged varies by container volume. These new “variable can rate” fees, which are popular in large US cities, will come into effect in Vancouver in 2006: (see pdf)
Selkirk, Manitoba has about 3,500 residential collection stops (single and multi-family) and about 300 businesses. The city introduced a two-bag limit on garbage in June, 2003, with a one dollar tag required for each additional bag. The two-bag limit clearly had an impact on resident behavior; the amount of recyclables recovered during the 12 months after the program was 47 per cent higher (764 tonnes) than in the 12 months before implementation when 521 tonnes of recyclables were collected. Data for the 12 months to June, 2005 show that the trend in increased recycling has continued, with 776 tonnes collected between July, 2004 and June 2005.
Janet Robins is senior consultant and Maria Kelleher is managing partner with RIS International Ltd. in Toronto, Ontario. Contact them at jrobins@risinternational.com and mkelleher@risinternational.com
The U.S. variable container approach
There’s been a tendency in Canada until recently to use bag tags or stickers rather than an approach that’s common south of the border in which householders rent different sizes of containers for weekly collection of their garbage.
Variable container programs enable large communities to use semi-automated collection vehicles. These boost efficiency, reduce worker injuries, and allow the establishment of automated billing systems. The number of standardized containers available for rent depends on the community. Sizes range from a micro can (12 gallons) to a 96 gallon cart (or bigger). Most residents tend to rent a 32 or 64 gallon container. Vancouver will be the first large Canadian city to implement this approach, starting in 2006 (see pages 10-11 for details about Vancouver.
Over time, some U.S. communities have reduced the options available for container rental, focusing on smaller container sizes because the demand for large containers (e.g., 128 or 160 gallons) decreased over time, as people adapted to the variable rate pricing structure. For example, the City of San Jose has added a 20 gallon container to its subscription service and no longer provides the option to rent 128 or 160 gallon containers. Five years ago, a 20 gallon cart was an anomaly in a U.S. variable container programs, but today it has become almost standard. Worchester, Massachusetts used to offer two sizes of garbage bag (15 and 30 gallons). The program now offers only one size of marked bag.
Fees have also increased over time. A 32 gallon container costs $18.30 per month in San Jose, compared to $14.95/month two or three years ago. A sticker for a 32 gallon extra container has increased from $3.75 to $4.50. Three items of bulky waste now cost $23 compared to $19.
Lansing, Michigan charges a mandatory flat fee of $52.50 per household per year for recycling (up from $50/year), and charges the same mandatory fee for leaf and yard waste pick-up. Garbage bags cost $1.80 (up from $1.50). The city has also recently added a container subscription option (21, 32, 65 and 95 gallon carts), whereas in the past, the system was based on bags only.
In Los Angeles, the base level of service fee has increased from $6 to $11/month for single family dwellings and from $4 to $7.27/month for multi-family dwellings.