Canadian Tire scraps eco fees starting Tuesday

TORONTO - 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 government and businesses, the store chain announced Monday.

TORONTO - 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 government and businesses, the store chain announced Monday.

The fees, which sparked widespread confusion when retailers started charging them on thousands of new items July 1, were the victim of a "botched" roll out and "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."

Waste Diversion Ontario set up a very complicated structure for charging eco fees and left retailers to sort it out, Arnett explained in a release.

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

"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.

Stewardship Ontario, an industry-led organization that oversees the program, also shares in the blame because it didn't do a good job in preparing Ontario consumers for the new fees, Arnett added.

"Stewardship Ontario did not provide answers to the many questions customers and the media had in the face of fees that nobody understood," he wrote.

Canadian Tire, which apologized last week for overcharging some of its customers, stumbled too in implementing the fees, largely because of how complex they were, Arnett acknowledged.

"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."

The Canadian retailing giant won't be charging any more eco fees until it can "sort out a better system" with Stewardship Ontario and the provincial government.

It's also looking into listing the new eco fees on price tags and shelf labels to make it more transparent, Arnett said.

The government gave Stewardship Ontario the power to collect fees to fund a recycling program that diverts potentially hazardous items, such as fire extinguishers, household cleaners and paint, from Ontario's landfills.

But there was no public warning that the eco fee, which was first introduced in 2008, would be slapped on thousands of new items earlier this month.

Stewardship Ontario collects fees from retailers and manufacturers who, in turn, determine the fees that they pass on to consumers.

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

Consumers, critics and some industry groups have been scratching their heads about why certain items are subject to the levy, such as laundry detergent, grass seed and environmentally friendly products that use natural ingredients.

The fee furor has provided rich fodder for Ontario's opposition parties, with the Progressive Conservatives promising to scrap the levy if they win the 2011 provincial election.

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

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, said Opposition Leader Tim Hudak.

"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," he 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 scrap the fees should be applauded, but Premier Dalton McGuinty should have never allowed the industry to effectively regulate itself with respect to the eco fees, said NDP Leader Andrea Horwath.

"The McGuinty government dropped the ball, 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," she said in a statement.

 
 
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