Managing EPR Risks in Canada
Non-compliance Fees and Penalties in Canada Explained
This year, the Ontario Resource Productivity & Recovery Authority (RPRA) levied a $340,457 penalty against retailer Casper for ‘failing to establish and operate a recycling collection system (or not joining a collective Producer Responsibility Organization) to manage their blue box (packaging and paper product) material.’ Similarly, British Columbia fined Waves Coffee Inc. $30,891 for non-compliance with the Province’s Recycling Regulation requirements to manage packaging and paper product waste.
These recent, publicized examples explain why understanding EPR non-compliance fees and penalties in Canada is crucial to avoiding hefty fines – and maintaining your business’s reputation.
What you should be aware of:
- Penalties for Late or Incomplete Reporting
Extended Producer Responsibility programs typically require producers to submit annual reports on the amount and type of products sold and the corresponding waste generated. Missing the reporting deadline or providing incomplete or inaccurate information can result in significant fines, and while the exact penalties vary by province (examples of which we will discuss later on), they often include a daily fee for each day that reports are overdue or incomplete.
- Fees for Under-reporting or Misreporting
Similarly, to late reporting, under-reporting the amount of product placed on the market or misreporting the material types can also result in hefty fines. If any discrepancies are found, EPR authorities conduct audits and may impose financial penalties intended to correct misreporting and deter fraudulent practices.
- Administrative Penalties
In addition to specific non-compliance fees, there may be administrative penalties for failing to adhere to various procedural requirements, such as registering with the appropriate EPR program or adhering to collection and recycling targets. These penalties can accumulate quickly, adding to the financial burden of non-compliance.
Province-Specific Variations
As we mentioned before, Extended Producer Responsibility regulations and associated penalties vary across Canadian provinces, and understanding those helps you in your compliance journey. For example:
- British Columbia: Known for its strict enforcement of its EPR program, BC imposes penalties for various environmental compliance issues, including late reporting and failure to meet collection targets. Fines enforced by the Recycling Regulation can be substantial – non-compliance could result in a maximum base penalty of CAD $200,000. At the same time, late payment or non-payment of fees are also subject to a penalty.
- Ontario: On January 1, 2023, Ontario’s new Administrative Penalties Regulation came into effect. The new Regulation gives the RPRA the power to issue monetary penalties to obligated parties non-compliant with the Resource Recovery and Circular Economy Act and its associated regulations. Contraventions and penalties apply to individuals and corporations and have a maximum of CAD $1 million, the maximum sum of the base penalty and ‘economic benefit.’ The Authority may also apply interest on late payment of fees and charges for non-negotiable cheques due to insufficient funds.
Beyond the financial consequences, there are also indirect but far-reaching risks impacting business operations. One of the most significant risks is the potential damage to brand reputation. Consumers become increasingly conscious of environmental issues, and companies that fail to comply with Extended Producer Responsibility regulations may be seen as irresponsible, leading to negative publicity and a loss of customer trust which erodes brand loyalty and, ultimately, affects sales.
Non-compliance can also lead to losing competitive advantage, as competitors who adhere to environmental compliance may become more attractive to eco-conscious consumers. Corporate social responsibility is a crucial driver of consumer decision-making, and non-compliance with environmental regulations can have significant consequences beyond monetary penalties.
How to Manage EPR Risks
There are many strategies to help businesses manage EPR risks. Here are some of them:
- Stay Informed: Extended Producer Responsibility regulations never stop evolving, so it’s crucial to stay updated with the latest requirements in your province. Stay up-to-date by regularly reviewing regulatory updates and participating in industry forums or workshops.
For instance, with our Data Insight Platform, you can enhance your compliance efforts through our benchmarking tool. This tool compares your packaging to similar products in our extensive database of over 50 million SKUs. Data Insight also allows you to forecast your future EPR fees and explore how small packaging can mean significant savings for your organization.
2. Invest in Compliance Systems: Implementing robust data collection, reporting, and tracking systems can help you achieve accurate and timely submissions. Solutions that integrate with environmental compliance requirements and offer valuable data insights can streamline compliance processes and go beyond compliance.
3. Seek Expert Advice: Engaging with environmental consultants or legal experts specializing in Extended Producer Responsibility regulations can provide valuable guidance and help you navigate complex requirements. If you need assistance with your obligations, our experts are here to help! RLG’s Impact Analysis is designed to give you clarity on your EPR obligations across jurisdictions and ensure your organization meets all environmental compliance requirements.
4. Conduct Regular Audits: Periodic internal audits can identify potential issues before they cause penalties. Regular checks can ensure that your reporting is accurate and that you are meeting all regulatory requirements.
Understanding your obligations and accurate reporting can curtail overpayments and fines, saving you time and money. Choosing the right environmental compliance services can also help you achieve your sustainability goals through informed decision-making. Learn more by contacting us today!
