Recycling revenues continue to see a decline

Bruce Area & Solid Waste Recycling (BASWR), that was contracted by Saugeen Shores and other municipality partners for recycling, is in a significant deficit situation as commodity revenues continue to decline globally.

“The future doesn’t look bright,” said John Rich, Saugeen Shores Council representative on the BASWR Board of Directors. “There are two million dollars in reserve but there will be stewardship changes down the line and the amount of equipment we will need to provide due to process changes may be upwards of $2 million. If reserves continue to be depleted, funds will have to come from the partners “or somewhere’.  “If things continue, we will see another decline of approximately $200,000 in reserves and a possible 13.5 per cent expense increase.”

Mayor Luke Charbonneau said that he doesn’t like seeing a depletion in reserves and doesn’t like paying a capital cost anymore than anyone else.  “However, we need to have capital reserves for BASWR as it can cause this municipal organization to suffer and risk failure and we cannot have BASWR fail.  It’s a mistake to let BASWR deplete its reserves.”

The reasons behind the decline in recycling revenues is a global issue.

For many years, China received the bulk of scrap plastic from around the world, processing much of it into a higher quality material that could be used by manufacturers.

But at the start of 2018, it closed its doors to almost all foreign plastic waste, as well as many other recyclables, in a push to protect its local environment and air quality, leaving developed nations struggling to find places to send their waste.  The United States is the world’s second highest user of plastics after China.

Until 2017, China took 51% of all plastic waste traded globally. Unfortunately, the world has discovered that plastics collected for recycling are actually being exported with little control and these materials, according to reports, may not even be recycled but are ending up in landfills, dumps or waterways and endangering the environment and human health in all countries.

Beijing’s decision to halt shipments of two dozen types of solid waste, including certain plastics, paper and textiles, took effect on January 1, 2018.

In mainland China, imports of plastic waste have dropped from 600,000 tonnes per month in 2016 to about 30,000 a month in 2018 and continue to decline, according to data cited by a new report from Greenpeace and environmental NGO Global Alliance for Incinerator Alternatives.

The Chinese government has said it also plans to ban plastic bags in the country’s major cities by the end of the year, Reuters reports. The bags will then be banned in the rest of the country in 2022. Other single-use plastics like utensils and containers, will reportedly be phased out over a longer timeline. Single-use straws in restaurants will be banned by the end of this year, 2020.  This isn’t the first time China has announced a sweeping anti-plastics campaign that has had a major impact on recyclables around the world.

For many recycling companies world-wide, including BASWR of Bruce and Grey Counties, the result has been considerable financial losses, as presented to Saugeen Shores Council.

Bruce Area Solid Waste Recycling (BASWR), a not-for-profit organization that services 87% of Bruce County, submitted its budget to Saugeen Shores Council on February 24th.  The municipality, along with partners in the region, supports BASWR.  Members that support BASWR are the Municipality of Arran-Elderslie, Town of Brockton, Township of Huron-Kinloss, Municipality of Kincardine, Municipality of South Bruce, South Bruce Peninsula and Municipality of Saugeen Shores.

BASWR saw 2019 revenues of $1,788,833 while total expenses were $3,277,658 for a net income loss of $1,488,825.  Among increased expenses that contributed to the loss, included three pay periods in months such as October (extra $50,000); annual truck licensing fees of $30,000; high vehicle maintenance costs and increased equipment costs.

The net amount required from members is $1,048,855.43, with Saugeen Shores portion of the BASWR 2020 budget increasing from an initial estimate of $229,813.19 to $251,262.80 representing an increase of 14.80% over 2019.

The $21,449.61 difference is to be offset by a reduction of the transfer to the Landfill Expansion Reserve and, therefore, does not have an effect on the tax rate.