People in the Know: Karen Farbridge, Part One

I find that the most interesting interviews seem to happen after someone has walked away from their careers rather than when they are in the middle of them.  I think that this is because when you are actually in office you are constrained by it to always think about how your words could affect your ability to function there. It's only when you've finally walked away from it that you have both the time to think clearly and objectively about what you've done, and, the freedom to say what you really think about things. To that end, I was happy to do an in-depth interview with Guelph's past mayor, Karen Farbridge.

I think it's important to mention in passing that Karen and I go way, way back. I first met her in 1978 and she is probably my oldest friend in the Royal City. But I hope that that doesn't mean that I can't do a fact-based, objective interview with her. Ultimately, that's for the readers to judge, though.

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Karen Farbridge, our 40th and 42nd Mayor in Guelph.
Original image from U. of Guelph website, used under
Fair Use provision, cropped by Bill Hulet

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Bill Hulet: I heard that there was a talk you gave in London shortly after you lost the 2014 election to Cam Guthrie. Could you tell me something about that?

Karen Farbridge: There is a woman [Ashley Good] who has a business---I think it's called "Fail Forward"---she does work with---I think Doctors Without Border, but it might be Engineers Without Borders---one of those. In addition to their standard annual report, they also do an annual "Failure Report" where they highlight the year's projects that didn't work and why. The point of her work is help institutions and individuals have conversations about failure without triggering a bunch of negativity. Or criticism. And how to do this without making people feel threatened.

She was brought in to facilitate a conversation at the 2015 Federation of Canadian Municipalities meeting about what I'd learned from what I hadn't been able to achieve as Mayor of Guelph.  

Bill Hulet: In business people often talk about the need to experiment, push the envelope, "break things", stuff like that. But in governance you aren't really supposed to take any risks at all.

Karen Farbridge: The problem with politics is that there's always somebody who will want to take advantage of somebody and sort of flog it. One example would be the SUBBOR [SUper Blue BOx Recycling] project. Remember that?

Bill Hulet: That was the idea that you grind up everything and ferment it and burn the gas to make electricity?

Karen Farbridge: Yeah. 

So the city had an opportunity and we took it. We provided some space for them to test their facility. And when they were not successful, and they were not able to demonstrate the effectiveness of their process---all of a sudden it became the city's failure. 

Right?

And it got caught up in the lawsuits and stuff like that. So they sued us. It turned out that that was pretty much how they made their money---through lawsuits. So it became somehow that the city had failed.

But we had taken a risk on an opportunity. At the end of the day we were whole. We didn't invest any of our own dollars into it. We didn't pay them to process our waste. It didn't work---but I'm sure we learned some things along the way. 

But we never were able to go back and learn from it---people just wanted to move on and forget about it.

Our administration did a really good job in the agreement of protecting the city, and we were left harm free. But it's an example of even when it wasn't a failure in any sort of measured way, it was used to be a negative story. And yet we'd taken advantage of an opportunity to see if it could have worked for the city. 

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The Saga of Eastern Power

SUBBOR is an interesting study all in it's own. It turns out that it was a project run by two brothers---Greg and Hubert Vogt---who are the owners of "Eastern Power Limited". And as Karen mentioned, this company has a history with governments and lawsuits---.

The earliest reference to Eastern Power Limited's legal issues is a throwaway reference in a story about Guelph's SUBBOR troubles in the magazine Solid Waste and Recycling:

(Interestingly, Eastern Power sued Italy’s largest municipal utility for $162 million in damages in the late 1990s over what Eastern called a breach of contract related to a deal to supply a plant to generate power from sewage in Rome. The Italian utility won and Eastern Power was ordered to pay $44,000 in costs.)

Unfortunately, I wasn't able to find any other reference to this lawsuit or the project in general.

In addition, Eastern Power has built two facilities that recover methane gas from landfills which were used to create electricity. The first one was at Brock West in Pickering which was installed in 1991. A second facility was installed at the Keele Valley landfill in Maple in 1995. (This was the largest landfill in Canada and the third largest in North America when it was in use.) Both of these facilities seem to have functioned according to specifications.

The Brock West methane collection facility in Pickering.  Image from the Keneidan Construction website,
used under the Fair Use Copyright provision.

In 1998 Guelph signed a contract with Eastern Power Limited to provide a space plus a source of garbage so they could display their SUBBOR technology.  The federal government had already ponied up $7 million to fund the project, and, the company had a proven track record because of their success running the Brock West and Keele Valley methane collection plants---the second and third largest landfills in North America. The idea was that the Vogt brothers had three years to show that their technology worked and at a price that would save Guelph money over the existing Wet/Dry system. Unfortunately they were unable to do so in the time allotted and the city decided to sever the connection. At this point Eastern Power sued the city of Guelph for the sum of $32 million because of "breach of contract". Eventually the Ontario Superior Court ruled in Guelph's favour on all points and awarded Guelph $4.5 million in court costs.   

Where the saga of Eastern Power really hits "over-drive" is the next project it took on. As part of the Ontario Liberal government's program to phase out coal-powered electricity generation, it was decided that the province needed to build "Peaker power plants" that would be able to harmonize electricity production and demand on days when sustainable electricity production (ie:  wind, solar, hydro-electricity, etc) couldn't keep up to demand.

Eastern Power had a background in producing electricity from methane gas collected from landfills, so it could be argued that they had some expertise in natural gas electricity plant technology. But on the other hand, they weren't experienced at building peaker plants---so some eyebrows were raised when the Liberals awarded them a contract to build two plants in the Mississauga area in 2005 instead of the experienced Albertan company TransCanada Energy (yeah, these are the same people behind the Keystone Pipeline.) These two plants were to be called "Greenfield North" and "Greenfield South". The Northern project was soon scrapped because Eastern Power couldn't find investors willing to loan them enough money to build the project. (Remember this last sentence---it will be important later!)

An election was called, and the two proposed generation stations were immensely unpopular with voters in Mississauga, so the Liberals cancelled their contracts. (They also cancelled a similar generating station in Oakville, but the contract for that plant had been awarded to Trans Canada Energy, so it isn't relevant to this story.) When Ontario Power Authority lawyers started the process of working out a settlement with Eastern Power they found that because the company didn't have any experience building peaker plants, they had found it extremely hard to find the money they needed to build the project. The only investor they could find, EIG Management Company, asked them to put in some extremely cautious controls over the way they used the money. In 2011 EIG agreed to loan Eastern Power $260 million, but only under what an ordinary person would consider quite onerous terms.

According to a Globe and Mail article published on the 7th of November in 2012,

Eastern could only withdraw money monthly and only for approved construction expenditures. In return, Eastern had to pay 14-per-cent interest on borrowed funds and pledge control of the company and virtually all of its assets as collateral.

Because of these tight controls, by the time their peaker plant was cancelled, Eastern Power had actually received only $61 million dollars. But when this happened, EIG sued the Ontario Government for $300 million in damages---and eventually received $149 million (eg: $61 plus $88 million) in an out-of-court settlement.

To understand what happened, I'll have to explain something called a "yield maintenance" amount. Basically, this is the idea that when someone loans another person some money at a specific rate of interest over a specified length of time, they expect to not only get their money back but also with a predicted amount of interest. When the peaker deal "went South" because of politics, the investors expected to get some compensation for the interest they expected to receive when they loaned Easter Power all that money. This isn't an outrageous idea, but the amount seemed out of proportion to the money actually lent. Again, to quote from the Globe and Mail article,

That provision shocked Rocco Sebastiano, a lawyer at Osler Hoskin & Harcourt LLP retained by the Ontario Power Authority, a provincial agency in charge of the negotiations. "I fell off my chair when I saw the yield maintenance amount being claimed by EIG," Mr. Sebastiano said in an e-mail dated Nov. 24 to officials at the Power Authority. "This sounds like a usury charge to me frankly."

The reporters said they couldn't find anything in the documents they looked at to explain either why EIG thought that they were entitled to such an enormous amount of money for lost interest on its loan to Eastern Power, or, why the Ontario Power Authority ended up paying $88 million. The authors of the Globe article had their own conclusions:

The controversy over the cancelled power plant serves as a cautionary tale for governments as they increasingly shift services from bureaucrats to the private sector. The risks associated with these projects are supposed to be borne by the private sector. But when deals unravel, it is taxpayers who are left on the hook.

The story of Eastern Power doesn't end with big cash payouts, though. As part of its settlement with Ontario Power Authority, it requested a contract to build a peaker plant somewhere else. This meant that they were contracted to build the "Green Electron" facility near Sarnia. The plant was finished in April of 2017, but during it's construction there were numerous complaints by people working on the facility about unsafe working conditions. And when it was finally finished, there doesn't really seem to be much need for it. According to a Toronto Star article on the 25th of January in 2018, the plant was only needed for 33 days in the previous year.

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I've gone on something of a tangent here talking about SUBBOR, but it's important to remember why it is that I'm producing this news blog. As I see it, at least part of the point of news is to inform the worldview of the readership. And this means that sometimes it's useful to go off on wild tangents when one story leads to another. It's easy to fall prey to the idea that things can be easily explained by concise narratives. But life's not really like that. Pull on a string and you never really know what the result is going to be. And how we view the world around us can often be dramatically changed by the unexpected results of seemingly random inquiries.

What I find interesting in looking at the SUBBOR story is something that I've found in other stories I've researched:  the really pernicious and deceitful way business tries and often does take advantage of both government and the ordinary citizenry. This has made me a lot more skeptical about government/business partnerships. Anyway, if you like the "deep digs" that I do on local Guelph stories---no matter where I end up with them---please consider subscribing through Patreon or making a one time purchase through the Tip Jar. Even as little as $1/month is appreciated. 

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Digital manipulation of images by GIMP

Hulet: Is part of the reason why politicians get blamed for taking risks because the media likes to do "gotcha" stories and reporters don't have time to do any meaningful research?

Farbridge: I think that's more of it. I was looking through paper clippings from all through the 90's about the various things we did. 

The paper then---because they had more resources, more reporters, who had more time. They were a huge contributor to helping see projects move forward---like the Wet/Dry, water conservation and efficiency.

We didn't have social media at that time. So I wonder what it would have been like trying to do those projects with social media. But the papers played this really important role of being a place where there was good reporting on the facts, there was good presenting of debates---criticisms but also the positives. There was a balance of that in the community conversation. 

But then when you get into the mid 2,000s with the rise of social media the paper's stories just continued to decline. At that point they only had time to go after the "gotchas"---at a very superficial level. And that would feed the social media stuff, and all of a sudden the negative stories had this platform and there was nothing counter-balance them. 

Put a positive story on FaceBook and it goes nowhere. Put a negative story on and it's shared---people put little crying icons, stuff like that. It's hysterical. There's lots of research on it---I've tested it myself. 

Hulet: And then there're examples like "Ontario Proud" that are specifically feeding that. If you have the analytics in front of you, can can tell what works and what doesn't.

Farbridge:  That's one of the reasons why I think it's gotten worse. Rob Fords and Doug Fords have always been on our councils---but there's always been a whole lot of other voices to put what they said into a context or perspective. Now it seems that those voices are amplified in a system that is driven digitally through social media and those analytics. Those voices are getting amplified out of proportion to what the larger population might believe. 

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Hulet: What have you learned about the difference between governing a city, and, being a politician and getting elected---so you have the opportunity to govern the city. I've always thought that these were two things that are very different, and are sort of at loggerheads with one another.

Farbridge: Yeah. No they are totally different. I'm much more comfortable in the governing role. I don't like the election role. I never did. How I managed that was to put together a good team who were able to work in that world and have them lead it. And where I haven't done well was when I haven't had that team. 

My second observation is it used to be that campaigns used to be six or eight weeks. Maybe a little bit of runway coming up. But not much because that would always be in the summer time. So things really just hit in September and October, you had the elections. They were over and you got to governing. 

Now the elections go everyday, the entire year, every year of the term. They just go constantly. It's not just at a municiipal level, it's at the federal level and the provincial level. The campaign is going all the time. 

Hulet: So you felt even in the middle of a term you had to be very careful about what you said, or, think about the election?

Farbridge: It's about time. There's only so much time. 

A woman who's doing her Master's---. I met her about a year ago now---. She asked the question "How do mayors in Canada express their influence and power?" We don't have a "weak mayor" system---that's a wrong use of the term. (That's where the mayor only has one vote on Council---as you know.) 

Anyway, this woman interviewed mayors across the country, and she defined things into three areas. And how she said it made a lot of sense to me. 

One is sort of bucket is executive execution, another bucket is community, and, the other bucket was politics. Her thesis is that with the resources that mayors are given in Canada that they can only operate in one effectively. Maybe a little bit in one of the others. And it depends on the context of the municipality. 

So, for example, John Tory [Mayor of Toronto] has to spend a lot of time in the political bucket because he has forty odd councilors. So he has to know who he has "lined up" on his votes before going into a Council meeting. 

Nenshi [Naheed Nenshi, Mayor of Calgary] is completely in the community bucket and has an abysmal political record in Council in terms of getting his stuff supported---because he spends his time connecting people with his lost cats over social media.

Hulet: So he's what they call "a retail politician"?

Farbridge: Yes

So when I reflected on that for my own various terms---.

My first term---because it was such a split Council---I spent a lot of time on the political side of it. A lot of time engaging Councilors. Making sure they had what they needed, making sure they were comfortable with the vote---to ensure we could move forward with decisions. 

In my second term as mayor I was able to put a lot of time and effort into execution---more fundamental governance stuff. So once Council had made a decision I put my focus on making sure Council's decision got implemented. Cause there's "no connect" between Council making policy and those policies actually getting implemented, right?  Unless you put attention to it. 

I was able to put a lot of time into the execution and I had a CAO [the Chief Administrative Officer---the person who runs the city and manages all the non-elected staff] at the time---Hans Loewig---who was very much into getting things done. So we were a great balance in terms of getting the Council's direction, and giving him the mandate, and getting things done. 

And then the third term. I should have switched to community, but I didn't. I stayed in execution and was up against an opponent who lives entirely in community: not very good politically, hasn't had a good political record, and doesn't govern. And so I lost for lots of reasons---but that was one of the contributing things. And I felt that pressure---and I was absolutely doing more in that space. But there's only so much time in the day. 

Campaigning takes a lot of time and energy. You know. Going to every event and tweeting it out and putting it on FaceBook, taking a picture wherever you go. If you watched Frank Valeriote and Lloyd Longfield now---Liz Sandals [past Guelph MPP] never did this---they are never present. They are never in the moment governing. They are running their election. 

[Karen breaks out laughing.]

They are constantly on their phones tweeting and just doing the social media stuff. So it's all about the attention span and band width. You can't be running an election and governing at the same time---and do them both well. 

Hulet: That's certainly what Mike Schreiner is doing. He's like the Ever-Ready Bunny---he's everywhere.

Farbridge: And I think that social media has raised this level of expectation---that somehow this is the job of the elected official. But they're actually supposed to do a job, and elected to govern, and sure there are community pieces to that, but the demands today on a Mayor to go to events compared to in the 2,000s---there is a night-and-day difference. And it's been exponential, its not about the growth of the city, it's about people have this expectation of accessibility that social media provides. 

So if you're not being seen to be doing it, somehow you're not doing your job. 

And Liz never got onto social media, she got criticised for not doing it. But she really made a decision---I don't know if she did it consciously or unconsciously---but she kept elections to elections, and once she was elected, she governed. 

She went to a lot of community events. But even there---I admired her---she wouldn't go to every event, every year. Take for example some fundraiser that happens every year, she'd go every other year. This set the precedent that she would not be at everything every year, every time. But the pressure was absolutely the other way. 

Hulet: It's not just politicians. I'm on five different social media accounts---flogging the blog, flogging the books. And the sad thing is that all this effort actually works. It's just part of being a writer now.

Farbridge: And artists, and musicians---same kind of thing. Right?

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I think that this is a good place to pause for now. I'll do some more work and get the next part out ASAP.

Furthermore, I say to you---climate change must be dealt with!

Recycling: Stewardship Ontario and "The Authority"!

In my last blog post I tried to make readers aware of how incredibly difficult recycling really is. It isn't just a personal activity, it's something that involves a huge infrastructure and a myriad of collective institutional decisions. I also tried to show how complex the economic and political elements can be through showing how different companies---acting in conjunction with subcontractors like Universities---actively try to confuse people about what is or is not actually recycled once you throw it into the blue bin. In this post, I'm going to try to expose readers to a radical plan by the provincial government to fix these problems by "changing the game" and in the process, completely rebuild the economy of Ontario.

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The Problem:  Waste Recovery Has Stalled

Image from govt publication:
"Strategy for a Waste Free Ontario"

According to the province, waste recovery has been stuck at 25% in Ontario over the last decade. In gross terms, since the average citizen produces about 850 kilos of waste per year, that means that 638 kilos still gets land-filled. Multiply that by 13.6 million people, and you get an astonishing 8.7 million tons of garbage that is just thrown away every year. This is not only already not good, but even worse, waste reduction has also stalled---which means that things will only get worse as the population of Ontario increases. This would mean tax payers would have to pony up money and land to build a lot of new landfills. (Oh yeah, there's that whole destroying the planet thing, too.)

Even worse, there is a climate change element that needs to be considered. When organic waste---like a half-eaten hamburger or it's wax paper wrapper---gets tossed in a landfill it decomposes anaerobically (ie: "without oxygen".) A result of this is the production of methane, which is a greenhouse gas that is 25 times more potent than regular CO2. This means that a little bit of methane can be more hazardous to future generations than a lot of carbon dioxide.

People usually think of the bins on the curb as the core of waste production. But in actual fact, the organic waste that we put to the curb in green bins only represents 47% of the waste---the other 53% comes from what's called the "IC&I", or, "Industrial, Commercial & Institutional" sectors. Some of that does get put into the industrial composting stream---but a lot doesn't. For example, where I work (ie: my "day job" in the "institutional sector") a lot of food waste ends up in the garbage stream because there is no provision for students to separate their compostables from recyclables---and very few would make the effort if they could.

In addition, as I pointed out in my previous article, the physical act of separating trash into various different components is really, really difficult because there are so many different types of materials and when you mix them together you end up with contamination that makes the result worthless as a feed stock for future manufacturing. (And it doesn't help that businesses are trying to throw sand in the eyes of consumers in order to promote their product as being "recyclable" or "compostable".)

What this means is that the only real way to stop throwing out all this garbage is to do that most difficult of political activities:  change human behaviour. And this doesn't just mean getting people like university students to stop throwing half-full cups of coffee or pizza slices into the recycling bins. It also means that businesses will have to start thinking about recycling when they design and market products. (One industry insider told he calls this "lust to dust" product design.)  To be totally honest, it will require "social engineering" on an absolutely huge scale to get every business leader, employee, and, customer "with the program" in order to scale back on the enormous amount of crap we throw away in this province.  If we really want to get a handle on solid waste---and to be honest we don't really have much choice---we have to accept the truth of Naomi Klein's statement about climate change:  "This changes everything".

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It's Hard to Change People's Behaviour!

A lot of people are financially like this woman.
Image used under "fair use" rule,
from Daniele Summerfield's Real Estate Blog

A big part of the problem with changing human behaviour is that a lot of individuals and businesses are like a person standing on their tippy toes in water that is so deep that it only allows them to keep their noses in the air. That is to say, they're only marginally adapted to the status quo and are terrified about any change because they feel it will destroy their life.

As a matter of fact, this is a sad but inevitable part of life. In any given population of both people and businesses there are individuals that are "just barely getting by" and when something unexpected comes along, it wipes them out. It's just like all the really sick folks who die when a flu pandemic hits, or, the people who live pay cheque to pay cheque and lose their homes when they get laid off. Part of this is because of things that are simply outside of their control, and, sometimes it is a problem with people who have made bad decisions (think of someone who spends every spare cent they have on frivolous purchases instead of putting money into a "rainy day" fund.) When the day of reckoning comes, however, because of the way the human mind is constructed almost no one ever says "oh, well that's bad luck" or "ultimately it's my fault for making some bad choices". Instead, they point their finger at the government and scream about "those damn bureaucrats with their unnecessary red tape!!"

As a result, it rarely works well for a politician to simply pass regulations against a specific activity. If they do, they end up being the target of anyone who's business or lifestyle suffers because of the change. So instead, the "best practice" nowadays is to start measuring the activity of a specific thing that society wants to get rid of, and, then create some price mechanism that will encourage businesses and individuals to stop doing it. The iconic example is a carbon tax. The idea isn't to raise extra money for the government, it's to encourage individuals and businesses to avoid paying the tax by insulating their homes or taking public transit instead of driving a car.

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This leads us to the second huge problem with changing people's behaviour. Large swathes of the body politic don't look at issues on an individual, cost/benefit analysis. Instead, they've adopted a "short-hand" for thinking where they compare all human activity to a preconceived template. If it it fits into that worldview, good;  if not, bad. At that point they have decided what "team" they are on, and if it's in opposition, all honest discussion ends and it's time to declare war and use whatever means present itself to make sure that they win. This is what is known in political science as "ideology".

Unfortunately, ideological thinking in our society has "poisoned the well" a bit on price mechanisms because certain political organizations have "banged the drum" over the "tax" part of price mechanisms like carbon taxes and studiously avoided mentioning the "changing human behaviour" side of them. A good example of this comes from an advertisement ran by the Conservatives in the 2008 election.

The lesson to learn from sources like talking oil spots is that if the government is going to get into the social engineering business, it needs to create some distance from itself and the people trying to change human behaviour.

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Some readers may have noticed that I've taken all the Google "Adsense" adverts off the blog. I've done this for two reasons. On-line advertising has changed dramatically over the last few months, with most of the ad revenue being channeled away from "little guys" like this blog, and towards a small number of "big players". This is being explained as a method for cutting down on "fake news", but the end result is that revenue from ads has effectively dried up for a lot of people---including me. (Actually, it never really was that much.) In addition, looking at the stats, it's obvious that more than half of people who read this do so on their cell phone, which doesn't show ads anyway. Toss in folks who use ad-blockers, and advertising just isn't worth it.

This makes subscriptions through Patreon even more important to support people working to keep citizens informed. Even a dollar a month makes a difference! If you do choose to make a larger subscription to the blog, there are rewards:  $5/month gets you a copy of Walking the Talk, and, for $10/month, I'll send you a copy of Digging Your Own Well too! One time donations are also appreciated (all major credit cards plus PayPal accepted), so if you want to avoid making a long term commitment, you can just make a single, lump sum payment. 


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Introducing "Stewardship Ontario"

Recognizing the political minefield that is created by directly intervening in the economy, or even trying to use taxes as a price mechanism to get people to stop wasting so much stuff, the Ontario Liberals tried a new approach. They decided to force the businesses making and importing all the waste to be directly responsible for getting rid of it. To that end, they created a non-profit corporation, "Stewardship Ontario", who's task it is to monitor and deal with all solid waste issues in Ontario. It is governed by a board of directors who are elected by industry members who's ability to vote for directors is directly tied to how much money they pay into the institution.

When you think about this idea, it does a great job of separating out the politics from decision-making on solid waste issues. Take, for example, the disposable coffee pods that I mentioned in the previous blog post. If the province steps in and orders producers to stop producing the darn things, their company will scream bloody murder about "red tape" stifling innovation. If, instead they force the producers to standardize their product so they are all either recyclable or compostable---same thing. If they try to force the companies to pay a lot of money to expand the recycling or composting facilities so they actually are recyclable and compostable instead of just being marketed that way---again, more wailing and gnashing of teeth plus dark complaints about "tax-grabs" from conservative-sponsored talking coffee pods.

But if instead Stewardship Ontario orders the coffee cup manufacturers to standardize their products and come up with some practical, affordable way of dealing with the mountains of waste, there's no way that this can blow up in the government's face. After all, it will be the other companies that create plastic containers that are ordering the coffee pod people to pull up their socks and make products that work in the same system that they use---not evil politicians! And because the people making the decisions are specifically the ones with the most "skin in the game" (remember votes for board members are based on how much money a business has to pony up to pay for the system dealing with all the garbage), they are going to have precious little sympathy for ideologically-based complaints because they are the ones subsidizing the disposable coffee pods gumming up the works.

Ever notice this logo?
It's on the side of lots of factories
Copyleft image c/o ISO

This might seem to be a bizarre "over-reach" by the government but if you know anything about modern industry, it seems less radical. There is an international, non-profit, private corporation by the name of "the International Organization for Standardization", ISO, that has been around since before the Second World War. It's purpose is to help industry work together to standardize parts and processes in order to foster trade and commerce. If you can't imagine what it does, consider what chaos would exist in industry if each manufacturer used their own particular type of bolt and nut. How would your local mechanic have any hope of fixing your car? Not only would he have to stock an astronomical number of parts but he'd have to have a warehouse just to store all his tools. What Stewardship Ontario really is, is a form of "ISO" for the province's solid waste.

I'm sure you've seen this logo.
Image public domain because
it is fundamentally geometric in design.

Another analogy that is even closer to home is "the Beer Store". It is also a private non-profit which is owned by 25 Ontario breweries and has existed since 1927. It was empowered as a regulated monopoly by the Liquor Control Board of Ontario to sell beer and also to manage a deposit return system for beer bottles and draft kegs. It still does, and the average beer bottle in Ontario is reused an average of 15 times before it gets recycled---which is a huge benefit to the environment.


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The stubby!
Standardized perfection,
copyleft by Simon Laird

It is useful to consider one aspect of the history of Brewer's Retail Inc. At one time it operated in an environment where it wasn't constrained by things like international and inter-provincial trade agreements. As a result, it had the authority to impose industry standards---like the ISO. The result was the "stubby" beer bottle. This was the only type of bottle that was allowed in Ontario and it only had lables that were attached with water-based glue. This meant that when someone brought in a case of empties to the Beer Store the staff didn't have to sort them into different brands---because a bottle was a bottle was a bottle. When they were washed the labels fell off and there was no difference between Labatts Blue, Molson Porter, or, Carling Black Label.

Today, things are different. There is a standard type of beer bottle, which is called a "long neck standard". If a business wants to sell beer in a different type of bottle, it can. But if it does so, it pays an extra handling fee. And that's because it's a lot more work to sort different bottles---over 50 different types---into different boxes, and separate the boxes so they can be sent to different bottling plants for reuse. And, of course, all this extra handling results in more breakage and less reuse of the bottles. There's no way around the fact that the old standardized stubby bottle was better than what we have now. But there is an advantage to this new way of doing things:  it can operate in a system based on free trade.

Because Stewardship Ontario is an industry-based, non-profit trade organization, it's decisions are different from government regulation. I've been told that this means that its decisions cannot be over-ridden by the trade organizations like NAFTA. Trade agreements were what did in the stubby, but since all importers will have to deal with solid waste issues inherit with their product through the Stewardship Councils, this takes the government out of the process. This means that this is the way we could see the return of standardization---but through a process that is seen as voluntary instead of imposed.

But it's important to realize that the present regime at the Beer Store exists in an environment where Stewardship Ontario is only paying 50% of the cost for recycling and land-filling waste. The province has set a time line for moving towards 100%. (More about this in my next post.) As increasing amounts of money are levied against businesses, they will start trying to engineer in waste reduction and recovery as part of their product design, instead of just considering it a trivial after-thought. At some point, it will make sense for Stewardship Ontario to start setting standards and charge enough money for deviation that there will be a real penalty for ignoring those stardards. I suspect at that point we very well may see a return to something like the stubby beer bottle. I also suspect that similar things will start popping up in other industries---maybe standardized wine bottles, maybe refillable pickle jars, etc. That's certainly what the government had in mind with this legislation, and what industry insiders think is going to happen.

In other words, Stewardship Ontario allows for the creation of rational packaging---like the stubby beer bottle---again. Only it does so through a price mechanism instead of government regulation. And this price mechanism is done through business self-regulation instead of special taxes, which avoids the creation of talking beer bottle ads during election campaigns. 

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As I mentioned above, advertising revenue has dried up for the "little guy" because of social media attempts to control the spread of "fake news". Other changes to the business model of businesses like FaceBook have hindered the ability of a small blog like this one to spread "virally". Unless you are a huge player, the only way to promote your site is increasingly by having to buy advertising from the social media provider. This means that "word of mouth" is even more important. If you read this blog and find it useful, remember to post a link to it with a description on the "friends" group that you are on. 

And if you do come across the blog, remember to subscribe to it so when the next issue comes out you won't miss it. You can do this in various ways. If you want, you can use the Digg Reader to subscribe to the blog. All you have to do is register with Digg (it's a good business, it won't hurt you), and go to the Reader page. Look at the lower, left hand corner for the reader page, and you will find a little link that says "+add". Click on it and you will find a place to add the URL for the blog (make sure it is the generic blog URL, and not the one for a specific article.) When the next article comes out, it will be listed with all the other unread blog articles that you have subscribed to. (You might want to add Guelph Politico too---Digg Reader has a podcast player built into it.) Sorry, there seems to be an incompatibility between Blogger and the Digg reader that seems have asserted itself recently. I can't get the "Back-Grounder" to work on it today, so I'm not going to ask you to try. It can be hard to keep ahead of changes in on-line platforms, unfortunately. As far as I know, however, the email system mentioned below still works. :-(

If this is too much, you can also subscribe to the blog through email. Just look on the right side of the blog and find the "Follow by Email" title, enter in you email address, and, click on the "submit" button. 

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Introducing the Resource Productivity & Recovery Authority

“People of the same trade seldom meet together,
even for merriment and diversion,
but the conversation ends
in a conspiracy against the public,
 or in some contrivance to raise prices.”
Adam Smith, Capitalist Saint
Public Domain Image, c/o Wiki Commons 

Many of my cynical readers will at this point no doubt be asking themselves: "This sounds all very good---but business people don't care about the public good, THEY WANT MONEY. What's to stop them from perverting this system?"

As the government admits in their 2016 publication "Strategy for a Waste-Free Ontario:  Building the Circular Economy", it is important for there to be a mechanism that stops businesses from abusing their control over price mechanisms aimed at limiting waste.

"The legislation provides the Authority with the tools for a graduated method of ensuring producer compliance with regulated requirements and a fair system that discourages non-compliance and prevents free-riders. Compliance and enforcement tools include inspection powers, the power to issue compliance and administrative penalty orders and the ability to conduct investigations."

P-14, "Strategy for a Waste-Free Ontario"

What the government is talking about is a non-profit corporation that's mandate is to keep the Ontario Stewardship Council honest and transparent. This is not a trivial task, because our province has a history of "shenanigans" when it comes to getting businesses to pay for the cost disposing of their products after they've been used.

One really annoying example came when Stewardship Ontario first introduced "eco-fees" in 2010.  The idea was that each item a company made or imported had to put money into a fund to help municipalities or the province pay for either recycling or land-filling these items. It wasn't so much a tax as an example of "full-cost accounting". (This is the idea that businesses should really pay the full cost for what they do instead of expecting the tax-payer to clean up their mess.) Some retailers had the bright idea of listing their products as costing a certain amount, and then adding on the "eco-fee" at the cash register (eg: exactly the same thing they do with the GST tax---which is also annoying and not done in Europe.) That way, the company managed to act as if the cost of cleaning up the mess they created was just another "cash grab" by the government. As an added bonus, when they advertised their products these companies made it look like they were selling items for a lot less than those competitors who simply accepted that the eco-fee was part of the cost of production and "buried" them in the item's cost. Indeed, some companies even seem to have been able to make a little extra money in the process by over-charging consumers while they were at it. The fact of the matter was that some businesses seem to have just decided that they wanted to stick a finger in the eye of the government by following the talking oil spot manoeuvre.   

Glen Murray
reigning in big business
image from Govt documents

Another annoying example of bad behaviour involved the tire disposal fee. The "Toronto Star" exposed some very suspicious behaviour by executives in the Ontario Tire Stewardship program. These included strange internal accounting practices, what appeared to be money laundering, support of lavish lifestyles for directors, and, money being spent on fundraisers by the Liberal Party. (As a result, the Tire Stewardship program is the first recycling program that is being replaced by the new legislation---it disappears this year.)

It is very clear in reading the introductory documents put out by the then Minister of the Environment and Climate Change, Glen Murray, that the Resource Productivity & Recovery Authority was specifically set up to stop these sorts of excesses. It is even "baked into" the language he uses:  he calls the organization "the Authority".

As a matter of fact, no one I've spoken to calls the Resource Productivity & Recovery Authority (RPRA) "the Authority". Instead, it's called "rip-rah"---after the acronym. But Murray's point should be well taken. The "invisible hand" of capitalism specifically encourages businesses to always pursue the "bottom line". And as everyone knows, that phrase really means "I don't give a damn about anything else except money!!!!" We need a strong "authoritah" to pull over businesses, and start smashing them in the shins with its nightstick to deter them from trying to stick the taxpayer with the cost of cleaning up the messes they create.

If you look at the way RPRA has been set up, it certainly looks like Murray understood that it needed to be protected the same way a lot of other government agencies are, or it would be prone to political influence. So it has specifically been designed to be one step removed from elected politicians. It is a non-profit corporation (like a university) that starts out with the Minister of the Environment and Climate Change appointing a certain number of people to the board of RPRA, and, then these member appointing others. At that point, all the board members then elect a Chair.  And at that point, the Board then goes on to follow a fairly complex set of directives from the Ministry. Primarily, these outline regulations aimed at getting Stewardship Ontario to collect data on solid waste and developing a game plan for reducing it according to a provincially-set time-table. It is also supposed to create and manage transition plans aimed at shutting-down existing recycling systems (things like tires, e-waste, toxic waste, etc) and rolling them into programs set up by Stewardship Ontario. (And of course, it has already done this with the tires, which will no longer involve a separate entity or a consumer-paid "eco-fee" when that program is done away with this year.)

As I've pointed out in previous blog posts, a great deal of what gets done in both Ontario and Guelph gets done not by direct political intervention by Council or Cabinet, or even by career bureaucrats, but instead by appointed boards and commissions. The idea is to create a "fire wall" between people who have to raise money and get votes (which makes them vulnerable to the wealthy and otherwise influential.) These include things like libraries, the police, health boards, the OMB, and so on. In a democracy it is important to have oversight by elected officials so things don't get "taken over" by vested interests---but it is equally important that issues don't become "political footballs" where emotional appeals to public prejudices (like talking oil spots) overwhelm expert opinion about where the public good really lies.

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If you look at the RPRA website, you can see a subset called "Datacall". If you look at the left hand side of the site you can see a line of links. These give a lot of detailed information that allow people to compare things like rates of recycling by municipality. They also show the amount of money that Stewardship Ontario channeled from businesses that create the crap to the municipal governments that have to clean up the mess. How this money gets divided up changes from year to year according to another program called "The Waste Free Ontario Act of 2016". This will have a profound impact on Guelph, because it needs to decide how it is going to adapt to the new regime. My next blog post will deal with these specific issues. What I've written above is more than enough for most people to digest. But unless citizens know about the issues that I've raised here, they will be unable to understand what the city Council is doing as they try to prepare for future changes in solid waste. Which means I had to explain all this stuff first.