There was an article in today's Toronto Star on proposed legislation that would require the residents of the city of Toronto to pay a refundable deposit on all batteries that are purchased in Toronto.

This would be similar to the beer bottle deposit. Every bottle of beer purchased at either the LCBO or the Beer Store has a 10 cent deposit added to the purchase price. When you return the empty bottle of beer. You get your 10 cents back. This program was expanded to include wine bottles a few months ago.

I am all for protecting the environment. I recycle diligently. Everything that can be recycled in the Blue bin goes in the Blue Bin. There are two garbage bins in the kitchen. One for regular garbage and one for the Green Bin garbage (organic waste). I have considered setting up a composter but believe that it would be a waste with the town already collects organic waste. As a household we put out less than one garbage bin every two weeks.

Deposit on batteries looks like a plan to generate revenue for the cash strapped city. It would be very difficult to administer, enforce and would cost the consumer more that it is worth. A better alternative would be to allow a zip locked sandwich bag of batteries to be placed in the Blue Bin.

This looks like another tax on the residents of Toronto under the guise of protecting the environment. Meanwhile collect all of those dead batteries in your garage they could be worth money soon.

How the Beer Bottle/Wine Bottle Refund Works?

1. Fixed Collection Points for Deposits.

The 10 cent deposit for beer and wine bottles are collected at LCBO stores and the Beer Store. Both are government of Ontario operated cooperations which collect the deposit. Only the Beer Store transacts the refund.

2. Cyclical Transactions, High Rate of Return.

Almost every time beer is purchased at the Beer Store, empties are returned. This means the government holds your deposit but you are not adding to your deposit. If you return more empties that you purchase you will decrease the amount of money that the government holds as a deposit.

Most beer bottles and wine bottles are returned to one of the 441 retail stores located throughout the province. 96% of all beer bottles and cans are returned.

3. Reusable Item.

Beer bottles are actually reused. They are returned to the bottler, cleaned and refilled. This saves the manufacturer money. Wine bottles are recycled for glass. The province diverted it from the Blue Bin program was because some regions do not have a recycling program. Also the coloured wine bottles would break and 'contaminate' clear glass which recyclers would pay more for.

4. Interest Free Loan.

The deposit that consumers place on beer bottles are an interest free loan to Ontario. According to the Canadian Brewing Industry in the year 2005 there were 5196742 hectolitres of bottled beer and 840548 hectolitres of canned beer sold in Ontario. One hectolitre is 292.8 bottles of beer or 280.8 cans of beer. Therefore there were 1521606058 bottles of beer and 236025878 cans of beer sold. [1]

A 10 cent deposit each container resulted in a total of $175,763,193 collected as deposits in a year. If the average rate of return was two weeks, this is considering that bars and restaurants would return empties on a frequent basis and household consumers would be much less frequent, $6,760,122 was held by government in deposits at any one time. At an interest rate of 4% Ontario made $270,404 a year.

A return rate of 96% meant 4% of empties are not returned. These deposits are kept by the government of Ontario. This is an additional $7,030,527 revenue for the government.

The deposit and refund program generates at least $7,300,931 for Ontario every year.

This is a very conservative estimate. The population growth in Ontario is 6.1% per year, so the amount of beer sales would have increased since 2005. Deposits on larger items such as kegs have not been included. The calculation also excludes wine bottle deposits and their rate of return. The rate of return on wine bottles should be much less. As a rule more affluent consumers drink wine and returns can only be made at the Beer Store. Most will not find it not worth the trouble. As a result the rate of return on wine bottles and containers, with a 20 cent deposit, should be much less.

Why the Batteries Refund Will Not Work?

1. No Fixed Collection Points.

Batteries are sold every where. They are sold at large stores such as Walmart, Future Shop. They are also sold a small convenience stores and dollar stores. Most of these stores would collect a deposit from the consumer on batteries but Toronto would have a hard time consolidating these collections. Sales would be difficult to verify.

The refund process would be just as complicated. If each collection point was to issue a refund a battery bought at large retailer but returned to a small convenience store would result in a temporary negative cash flow for the small convenience store. Most convenience stores would not be willing to refund the deposit.

2. Collect From the Importer.

The easiest option would be for Toronto to collect the deposit from the importer, have the retailer collect from the consumer and then refund the consumer at a central recycling station. However I don't believe that the city of Toronto has the legal authority to do this. Especially if the importer is not located.

3. Low Return Rates.

Just like the wine bottles that are not returned to the Beer Store. Batteries that have to be returned a recycling centre will not be returned. It would cost the consumer more in transportation.

1 comments

  1. Ruben // December 13, 2009 at 9:39 PM  

    Every store that sells pop must accept pop bottles for refund. Why would this not work for batteries?