Ontario Waste Diversion: Blue Box Materials & Municipal Hazardous & Special Waste October 1, 2009

1. Ontario Waste Diversion: Blue Box Materials & Municipal Hazardous & Special WasteOctober 1, 2009

2. Today’s Presentation • Regulatory environment & changes in the wind • Stewardship Ontario program highlights • Blue Box program – 2010 fees & changes • new Consolidated MHSW program • What do they mean for your industry

3. Regulatory Authority for Waste Programs Ontario Waste Diversion Act, 2002 Minister of the Environmentdefines obligated materials & sets out requirements Waste Diversion Ontario makes sure regulation & requirements are fulfilled, created & monitors Stewardship Ontario Stewardship Ontario operate program according to approved plan

4. Shifting Policy & Legislative Environment • Act under review • expect white paper this fall • expect new legislation next spring • Look out for: • extended producer responsibility (EPR) for all waste diversion programs meaning industry responsible for collection to processing • new measures to ensure improved waste diversion performance, e.g., higher targets for all materials designated under regulation

5. Stewardship Ontario’s Two Programs Consolidated Municipal Hazardous or Special Waste Program (brand new but built on Phase 1 MHSW) Blue Box Program (5 years) and

6. Review of Preliminary Blue Box 2010 Fees

7. Blue Box – A Success Story • Part of our households for 25+ years • young adults never known life without recycling • Almost everybody has access to programs • 90%+ recycle regularly • We recycle more than 900,000 • tonnes annually • Recovering 66% of recyclables • in household waste • But there’s room for all of • us to get better • we can recycle more

8. Blue Box – A Shared Responsibility Current Blue Box Program Plan – • Requested by Minister (2003), • Stewardship Ontario directed to develop & operate • Shared responsibility with municipalities on 50/50 basis • What’s industry’s role?

9. Industry’s Role: You’re a Blue Box Steward if… You’re a brand owner: • company/person resident in ON who introduces printed paper or consumer packaging into ON marketplace • packaging is made from glass, metal, paper, plastic (or any combination) You’re a first importer: • first company/person to take ownership of products imported into province where brand owner is not resident in Ontario You’re exempt: • company/person with less than $2M in annual gross sales

10. If you’re a Blue Box Steward Blue Box stewards – • pay fees for printed paper & packaging • examples of printed paper: flyers, brochures • examples of packaging: branded consumer products such as lotions, over-the-counter drugs in plastic & cardboard containers • fees contribute to 50% share of recycling costs • as noted, expect extended producer moving from shared to full responsibility

11. Steps in Calculating Annual Blue Box Fees Municipalities report recycling net operating costs to WDO To meet obligation, stewards pay fees on materials used for printed paper & packaging WDO tells Stewardship Ontario amount of 50% share • Variations in fees based on - type & amount • how much it costs to collect; • how much revenue is earned when materials are sold • Strive for fairness! We negotiate with municipalities on best practices & other matters $ Agree final overall obligation Agree on final total industry obligation

12. Blue Box Preliminary Budget for 2010 2009 Blue Box municipal payment - $78.5 M 2010 Blue Box municipal payment - $83.5 M Increase - $5M Why? • mainly higher reported municipal operating & infrastructure costs • Stewardship Ontario able to reduce overall payment obligation to municipalities by applying factors such as best practices Total Blue Box preliminary budget - $88.4 - including program management costs - market development for plastic packaging to keep sustainable for those wanting to use it

13. Material Categories of Interest to Pharma

14. Examples of 2010 Blue Box Fee Rates

15. Introduction to Approved Consolidated MHSW Program

16. Consolidated MHSW Program Approved • Minister approved on Sept. 22 • Start up on July 1, 2010 • Fees for this program kick in on launch day • Who’s obligated―brand owners or first importers of any designated materials supplied for sale or use in ON market

17. What’s new/different in this plan compared to Phase 1 MHSW? • More materials • 9 materials in Phase 1 23 materials • Full extended producer responsibility • 80%100% • includes cost of collection to final disposal • More opportunities to take MHSW materials to collection locations • greater convenience for consumers to do right thing

18. If you are now a Consolidated MHSW Steward MHSW stewards responsible for - • pharmaceutical, sharps & syringes waste generated in Ontario’s residential sector only • managing unwanted materials safely & appropriately • collection through end-of-lifedisposal

19. How do Pharmaceuticals/Sharps Fit In? (1) • Minister’s program request letter identifies • pharmaceuticals • sharps including syringes • Pharmaceuticals means all drugs defined by Food & Drugs Act (Canada) Regulation • 3 categories • prescription • non-prescription • natural health products • Creams, gells, lotions, pill, liquids, gases, etc.

20. Pharmaceuticals – Prescription Drugs • Available from pharmacies only with written prescription from practitioner • Containers & quantities typically differ from those for over-the-counter • Intended for use in both human & animals • Biological drugs & radiopharmaceuticals • Controlled substances & narcotics • Tablets & pills dispensed in containers of various sizes • Ointments & creams in containers of various sizes • Liquids in containers of various sizes • Gases, e.g. inhalers & sometimes liquids dispensed in original containers

21. Pharmaceuticals – Non-Prescription Drugs • Over-the-counter drugs • both human and household pets • tablet, gel-cap, liquid & powdered form • for example: • allergy and sinus relief products • cold and cough remedies • headache and migrane pain relief • all sizes, all container types

22. Pharmaceutical – Natural Health Products • Orally ingested natural health products • Examples: • vitamins & minerals • herbal remedies • homeopathic medicines • traditional medicines • Excludes food, e.g. probiotic yogurt

23. Excluded Pharmaceuticals • Food: defined under Food & Drug Act (Canada) • Non-prescription drug products sold in food format, primarily marketed & sold as food • Non-orally ingested non-prescription drugs & natural health products including non-prescription topical creams • Orally-ingested non-prescription drug & natural health product: drops, lozenges & chewing gum for coughs, sore throats or halitosis

24. Sharps, including Syringes • Consists of needles, syringes & lancets • For humans & companion animals (pets) • From residential sector Excludes • Sharps from commercial & institutional sectors

25. Estimates on Amount of Pharmas Preliminary estimates: 24 M units could come back for appropriate disposal in year one. We are targeting about half of that (47% of the 10%) 244 M units sold into market(2007) About 10% won’t be used by consumers

26. Plans for Collecting Pharma Materials (1) • Estimate 290 tonnes collected in 2008: • 42 tonnes from municipal depots (know for sure) • about 250 tonnes from pharmacies • estimate from primary service provider picking up returned drugs • voluntary take-back programs estimated at 90% of chain & banner pharmacies • not validated; will establish actual figures in next steps • take-back program paid for by pharmacies • under Consolidated MHSW program, take-back will be a service provided to pharmacies; suppliers will pay program cost through stewardship fees

27. Plans for Collecting Pharmas (2) • Goal to give consumers more return options • return-to-retail (RtR) still primary channel • use existing pharmacy networks • will expand to other non-participating pharmacies • will accept at collection events & permanent depots Also: • pursuing partnerships, e.g. with medicationsreturn.ca to manage collection network • Long term success of program lies with pharmacies

28. Promotion & Education (P&E) Two main factors – • Pharmas are intended to be fully consumed • will promote BUD (buy only what’s needed, use it all up, dispose of left over drugs carefully) • Building consumer knowledge • many consumers unaware of take-back program • will inform people about where to take unwanted drugs, sharps & syringes

29. Year 1 Costs & Fee Rate for Pharma

30. March 2010: Mar. 31, 2010: Apr. – May, 2010: July 1, 2010: register as steward & file report online on material supplied for use in ON in 2009 deadline for reporting 2009 supplied for use in ON CMHSW fees recalculated & communicate before July 1, 2010 (will validate estimate of 244M sales) launch of Consolidated MHSW Program Plan -fees start Key Dates for Pharma Stewards (1)

31. July 31, 2010: file 1st steward report on sales from April 1− June 31, 2010 pay fees (based on ¼ of 2009 sales) reports/fees due quarterly thereafter Key Dates for Pharma Stewards (2)

32. What Should You Do Now? • In October, register to get direct information: www.stewardshipontario.ca, choose MHSW • Watch for official registered notification letter – October/November 3. Start compiling 2009 sales/use data 4. By March 31, 2010 file 2009 sales data using on-line system

33. Stewardship Ontario’s Role • Will help stewards adjust to transition by… • preparing to meet future obligations at the lowest possible cost • ensuring effective/efficient delivery against current obligations • Watch for communication through newsletters & on website: www.stewardshipontario.ca

34. Where to Contact Us Customer Service Email: info@stewardshipontario.ca Phone: 1-888-288-3360 Website: www.stewardshipontario.ca