Canada – recycling cash mystery deposited with minister

Tens of millions of dollars that Canadian have paid in recycling deposits over the past decade are largely unaccounted for, according to the province‘‘s auditor general. While Daryl Wilson said he‘‘s turned up no evidence that anyone is lining their pockets, in his annual report for 2004 he says the province is not adequately tracking what the deposit money is being used for.



Canada East reports that when the province‘‘s beverages container act was introduced in 1992, it was hailed as an innovative program that encouraged New Brunswickers to recycle while generating funds for the environmental trust fund, which provides money for various projects aimed at improving the environment. Under the programme, the consumer pays 10 cents deposit per container. That money is collected from retailers by distributors, who in turn are to pay 2.5 cents into the environmental trust fund with another 2.5 cents going to defray the cost of recycling the containers. The consumer gets the other five cents when they return the bottle.



However, some containers, approximately 20 per cent of the millions sold each year, are never sent back for recycling. The distributors contracted to manage the recycling program don‘‘t have to pay back a deposit, or the cost of recycling these unredeemed containers. Mr. Wilson estimates the money saved by the distributors on the unredeemed containers adds up to C$51 million over the past 12 years. "There has been a lot of money paid for the recycling of containers that have not been redeemed." He said the government doesn‘‘t know to what extent that money is being used to offset the cost of recycling and provide a rate of return for the distributors. "We feel the department should get audit level evidence to determine whether that money, or what extent of it is still necessary," Mr. Wilson said.



A similar issue was addressed by the auditor general in 1994. A recommendation was made to demand annual audited statements from Encorp, the major player in the recycling program, but the recommendation was never followed up on by the Environment Department. "I was surprised by that," Mr. Wilson said. Encorp manages the recycling of non-alcoholic beverage containers in the province, while Neighborhood Recycling has the contract to recycle non-refillable liquor bottles. The general manager of Encorp, Bryan Howell, said all the money being collected in deposits, including the unredeemed bottles, is being put to good use. In 2003-04 Mr. Howell said the company collected C$18 million in deposits. Of that, Mr. Howell said that approximately C$4 million went to the environmental trust fund, C$8 million to deposit refunds and taxes, C$4 million to redemption centres who by law get a cut of the money, and another million went toward collecting the containers. That left C$1 million, which Mr. Howell said didn‘‘t cover the cost of processing material for market.



He added that the market is not great for certain recyclable material. "Some of these markets, we have to pay people to take it," Mr. Howell said, citing small drinking boxes as an example. "It costs us more in freight alone than what we get paid for it." Mr. Howell had no arguments with the auditor‘‘s figures, but said they need to be put in context. "What (the report) fails to do is explain where this money went. If he would have asked us, we would have showed him." He said Encorp is a private firm and wouldn‘‘t say exactly how much it makes each year. But he did say government is free to look at how the deposit money is spent. "This does not generate a significant profit for us," he said, noting the company only has four employees.



"Come see our offices, you‘‘ll see." Environment Minister Brenda Fowlie said her staff will review Mr. Wilson&lsquo