WASTE BLUES - Curbside Recycling Reassessed (By: David Menzies)

Unedited/Uncut Version (before publication in September '97 issue of The Financial Post Magazine)

Shunted away in the industrial wasteland that is Commissioners Street, the Metropolitan Toronto Materials Recovery Facility - a sprawling structure that embodies an architectural blend of both the modern and the medieval - rises above its desolate surroundings. It was here, from the early '50s until the mid-'80s, that this concrete bunker-like facility incinerated Toronto's trash on a daily basis. These days, the plant's towering smokestack - long since deemed politically incorrect and thus rendered obsolete - no longer belches thick, black smoke into the air; the adjoining ash room no longer overflows with cinders. Yet, although garbage cremation no longer takes place here, the Metropolitan Toronto Materials Recovery Facility still handles the voluminous output of a throwaway society. Each year, 30,000 tonnes of discarded packaging material are hauled into the compound by dump trucks hailing from the cities of Toronto, York, Scarborough, Etobicoke and the borough of East York. A bright yellow front-end loader methodically plows each new load into a pile that quickly becomes an-ever expanding, multi-colored mountain of discarded packaging - from Coke cans and Jiff peanut butter jars to bottles of Johnny Walker and Jack Daniels. Earplugs are a must, given the constant, deafening cacophony of glass jars shattering and plastic pop bottles bursting (a sound that is disquietingly similar to gunfire.) All the while, the compound's asphalt pavement - speckled with thousands of flecks of pulverized glass - glistens in the mid-day sun.

Most of Metro Toronto's 2.5 million residents will never set foot in the Commissioners Street plant. Nor would they want to. Still, it is Metro's residents who play a key role in keeping the aged facility humming: this is, after all, the elephant's graveyard for those recyclables that are derived from the Blue Box.

Ah, the Blue Box. That, ubiquitous, azure-colored icon of environmental friendliness. Since its rapid rollout to Ontario municipalities 10 years ago, the Blue Box has quickly emerged as the urbanite's favorite method of practicing hassle-free environmentalism. Little wonder - what pray tell, could possibly be easier? Rather than chucking spent pop cans or wine bottles into the trash, one merely tosses said packaging into a cobalt-colored cube proudly bearing the stenciled-on declaration, "We Recycle!" Saving the world has never been more convenient. Heck, the Ontario version of the program was even bestowed with a United Nations environmental award in 1989. Today, Ontario's Blue Box system is the most comprehensive in North America. Indeed, by law, every municipality with a population greater than 5,000 must operate a Blue Box program.

From the start, the Blue Box was ingeniously marketed as a mom and apple pie issue. During its introduction to the masses, TV and print ad campaigns depicted the new-age wastebasket as an animated, cute-as-a-button puppy named Blue. "Feed Blue!" the ads commanded, and the citizenry gladly obliged. Take a stroll down any residential street on pick-up day and just try to find a single householder forsaking his or her sacred civic duty of toting ol' Blue out to the curb. Neville Kirchmann, the former president of Toronto-based Coca-Cola Beverages Ltd., used to boast that in Ontario, "more people use their Blue Box than vote." Kirchmann wasn't kidding.

Yet, while many would like to believe they are being environmental champions by being true to Blue, the sad reality is, the Blue Box is far from being an environmental panacea. In fact, for many Ontario municipalities under pressure to cut costs and balance budgets, the Blue Box has evolved into a waste-diversion boondoggle. Last year, for example, Metro Toronto's Blue Box program ended up costing taxpayers more than $5.5 million. As well, despite the heavy household penetration of the Blue Box, less than 30% of recyclable packages (excluding paper fibre) are actually recycled. The remaining 70% end up as garbage in landfill sites or simply exist as litter. And the system that once carried sacred cow status is now being questioned by a growing number of interests. Some people - ranging from municipal officials to environmentalists - are even beginning to denounce the Blue Box. Blue, it seems, has grown from an adorable pup to a nasty pit bull.

"It (using the Blue Box for recycling) is considered to be a motherhood issue," says Councilor Judy Sgro, a member of Metro Toronto's budget advisory committee. "But it's really a terrible drain on resources that could be better spent elsewhere."

"The Blue Box was never, ever an environmental measure," asserts Usman Valiante, a principal with Toronto-based environmental consultants General Science Works. "It was really a business strategy put forth by certain vested interest groups."

Not surprisingly, one of those vested interest groups - the soft drink industry - disagrees. "Our biggest success in recycling has been our participation and sponsorship of the Ontario Blue Box recycling program," says Tina Warren, director of public affairs for Toronto-based Coca-Cola Beverages Ltd. "This has been a success for the entire Canadian soft drink industry."

There's nothing like environmental issues when it comes to dealing with the complicated, the convoluted and the contradictory. Yet, when it comes to the Blue Box in Ontario, there is one undeniable truth: the Blue Box has indeed turned out to be a sugary-sweet deal for the soft drink industry - at taxpayers' expense. According to a study published in the trade journal Waste News, between 1985 and 1996, industry (the lion's share coming from the soft drink companies) paid $41 million into the Ontario Blue Box system. Municipal and provincial taxpayers, on the other hand, contributed a staggering $2.33 billion (including landfill costs of $1.75 billion) over the same 11-year period.

"The Blue Box," says Gord Perks, a spokesman with the Toronto Environmental Alliance, "is basically a form of welfare for Coke and Pepsi. And I think it's time we got Coke and Pepsi off welfare."

For cash-strapped municipalities, the news can only get worse: last March, the Ontario government ended its funding commitment to the Blue Box. All Ontario communities of more than 5,000 people are now essentially left holding the bag - or box, as the case may be - when it comes to funding what is already a money-losing proposition.

How did municipalities get themselves into such a fine mess in the first place? For starters, it wasn't by their own accord.

When the idea of rolling out a Blue Box program in Ontario came to fruition in the mid-'80s, it was a time of renewed environmental attention. Not a day seemingly went by when there wasn't a news story outlining the latest environmental crisis - real or imagined - ranging from global warming to tire dump infernos to vanishing landfill space.

During this period, environmental groups were pointing accusatory fingers at the big soft drink companies for their lack of commitment to the ultimate environmentally friendly container - the refillable bottle. In the late 1970s, the powerful soft drink industry struck a handshake deal with the provincial government of the day, promising to sell 75% of its soda in refillable containers. It never happened. Thanks to the proliferation of such disposable packaging as cans and polyethylene terepthalate (PET) plastic containers, the refillable glass bottle virtually disappeared from store shelves. All of which suited the beverage behemoths just fine: distributing refillable bottles no longer fitted into their North American marketing strategies. Remember "your local bottler of Coca-Cola?" During the '70s and '80s, many of those local bottlers were bought-out and shutdown as the large soft drink companies consolidated operations. Never mind the environmental impact: for the pop producers, it made far more bottom-line sense to market soft drinks in one-way containers at centralized manufacturing facilities than it did to devote resources recovering and refilling glass bottles.

Much to the chagrin of the soda companies, the phase-out of refillables did not go unnoticed: "Ban the can" emerged as an environmental rallying cry in the early to mid-'80s, and it downright spooked Coke and Pepsi. They were loathe to the idea that Ontario might become another Prince Edward Island. In 1984, P.E.I. mandated that all soft drinks sold in that province must be in refillable bottles - legislation that is strictly enforced to this day.

There was, however, a tailor-made solution for the soft drink industry's apprehension and the David Peterson government's burning desire for an environmental "win": the Blue Box. Billed as a "multi-stakeholder agreement" involving industry, the provincial government and municipalities, the Blue Box program, in hindsight, proved to be an awesome arrangement for the soft drink czars. The deal was this: the province would slash the refillable quota from 75% to 40% (later to 30%) on the condition that the soft drink industry contribute $20 million over a five-year period towards expanding the Blue Box program across Ontario. A non-profit corporation, OMMRI (Ontario Multi-Material Recycling Inc.) was established to collect and manage industry's share. Funding for the Blue Box programs would come from the province, municipalities and OMMRI (which has since expanded to include other industries and is known today as CSR: Corporations in Support of Recycling.) Between 1987-'90, the Blue Box was rolled out to three million households; today, almost 3.5 million Ontario households - representing 85% of the population - use the Blue Box.

"To the credit of the big soft drink guys, they saw the Blue Box as this great opportunity to move to a system that was cheaper for themselves given that they had chosen consolidation," says Valiante. "But nobody predicted the financial implications of the system."

Indeed, fast-forward to March, 1996 and provincial funding for the Blue Box program has ended. At the same time, most recyclable commodity prices continue to free-fall to the extent that Ontario municipalities suddenly find themselves picking up Blue Boxes chock full of materials that don't even begin to cover the costs associated with their collection and processing. Dev Tyagi, director of solid waste management for the City of North York (which runs its Blue Box program independent of Metro Toronto), questions the value of the Blue Box. "It (Blue Box) has replaced more environmentally-sound options and there has been no product stewardship from the producer who produces this waste," he says.

Central to all things Blue Box is the question: Who pays? Government, industry or end-user? As Councillor Sgro notes, every taxpayer in Ontario , whether they consume soft drinks or not, is paying a "hidden tax" to manage billions one-way soft drink containers. Would it not make far mo re sense for soft drink consumers to pay an extra 5 or 6 cents, she say s, to cover the costs incurred in diverting these containers from landfill? As Sgro outlined in a January letter to Norm Sterling, Ontario's minister of Environment and Energy: "I find it difficult to believe that the soft drink industry would collapse, or that the soft drink industry would be enormously affected by a price increase from $.99 to $1.05 for a 2-litre bottle of pop ."

Damian Bassett, the CEO of Toronto-based CSR, becomes noticeably agitated when asked to comment on the failings of the Blue Box system. The Blue Box, for all its shortcomings, has an endearing reputation amongst the populace, and Bassett wants to ensure it stays that way. He dismisses the criticism of environmental groups, such as the Toronto Environmental Alliance, asserting they are run by "malcontents" hoping to earn for their group the title of "association of the day." The soft drink industry, he maintains, has "more than paid its fair share into the Blue Box," not only through its financial contributions but also by selling some soft drinks in aluminum cans, which in turn make a profit for the r ecycling system.

Not according to the City of Toronto. Last December, the city launched a lawsuit for $1.2 million against OMMRI/CSR for breach of contract and negligent misrepresentation. In its statement of claim, the city notes that between 1988 and 1990, OMMRI offered to fund one-third of the Blue Box capital costs if the city adopted a municipal recycling program (which the city did.) OMMRI/CSR, the city maintains, has yet to deliver on those funding promises.

Bassett refuses to comment on the lawsuit, except to say that "the city's case is without merit . . . it has nothing to do with recycling, but is just an example to the depths some (municipal officials) will fall to cut costs and balance budgets."

Nor does Bassett mince words when targeting those Metro Toronto officials, such as Councillor Sgro, who are publicly-slamming the Blue Box for draining resources that could be far better spent on services ranging from policing to day care. "Instead of complaining about budget deficits," says Bassett, "Judy Sgro should get off her proverbial you-know-what and put another aluminum can into the Blue Box each week. Then there wouldn't be a deficit problem anymore."

There you have it: in the world according to Bassett, putting more aluminum cans in the Blue Box is the tidy, perfect solution in making recycling pay for itself. An oft-repeated mantra of virtually everyone connected with the soft drink industry is: "Aluminum is the gold in the Blue Box." And in truth, there's no denying it. Tom Richard, coordinator of materials marketing for Metropolitan Toronto, notes that Metro currently receives $1,850/tonne for aluminum. At that price, the aluminum collected in the Blue Box makes for a profitable undertaking. That compares very favorably with other packaging materials such as PET plastic ($160/tonne) and clear glass ($47/tonne) which are big money losers for municipalities.

In June, to encourage consumers to feed Blue more aluminum, CSR launched a $1 million newspaper, radio and billboard advertising campaign called Don't Trash Cans! "If everyone recycled just one more soft drink can each week for a year," the newspaper ad copy beams in bright blue letters, "Metro would earn $2.5 million more in Blue Box revenues." Says Bassett: "You see, I'm teaching people how to fish instead of giving them a fish."

Just one, not-so-insignificant hitch: there are dire concerns regarding the soft drink industry's commitment to aluminum packaging beyond 1999. That's when Coke and Pepsi's contracts for aluminum cans expire, and there's absolutely no guarantee that the soft drink giants won't switch to other lower-cost single-serve packaging materials such as PET or PEN (polyethylene naterepthalate) plastic.

"Municipalities have no leverage to ensure the 'gold in the Blue Box' stays there," says Robert Power, legal counsel for the Toronto law firm Outerbridge, Miller, Sefton, Willms & Shier. Should aluminum cans do a fast-fade come 1999, then "the Blue Box doesn't stand a chance" of being economically viable, adds Power, who also serves as the International Convenor for the I.S.O. (International Standards Organization) Working Group on Environmental Site Assessment Standards.

Indeed, there are already ominous signs that the so-called gold in the Blue Box may eventually be replaced with other, cheaper packaging materials in the next millenium. In a release last May, the Kitchener, Ont.-based Citizens' Network on Waste Management points to newly configured Coke displays appearing in neighborhood convenience stores which downplay canned product. For example, a photograph of a cooler at a convenience store in Fergus, Ont. depicts 10 shelves of mostly Coca-Cola products, yet, only a single shelf is devoted to aluminum cans (the other shelves are full of PET plastic and glass bottles.) Tina Warren of Coca-Cola Beverages stresses that Coke is "committed" to using aluminum cans beyond 1999. But she quickly adds: "Of course, nothing is guaranteed - the consumer is the boss here, not the soft drink industry."

Even more foreboding is a national billboard campaign launched by Pepsi Cola Canada Ltd. promoting its new Pepsi Sixpack - six 710-ml PET bottles bundled together by a plastic ring. The ad copy - "What 12 cans look like when they're easy to carry" - had municipal officials and environmentalists alike shaking their heads in stunned disbelief. For here was a major soft drink company not only promoting the merits of low-value PET plastic, but was also slamming high-value aluminum in the process.

"These promotions are extremely alarming for those of us concerned about the costs of the Blue Box," says John Jackson, coordinator of the Citizens' Network on Waste Management. "How long can we expect the commitment (to aluminum) to last beyond 1999, when Pepsi and Coke are already encouraging a shift away from aluminum cans to PET bottles?"

Colleen Newell, Pepsi Canada's VP of environmental and government affairs, defends the Pepsi Sixpack campaign, noting it is "just a new way of getting more people to try something different - we don't expect it (single-serve PET bottles) to be a significant part of our (packaging) mix."

As for Pepsi's long-term commitment to aluminum cans, Newell says, "there's a good likelihood that we'll stay (in aluminum). Of course, the alternative for aluminum is cans of steel - we've used steel in the past and we may choose to use it in the future." Gulp! For municipal officials, that statement is about as satisfying as week-old Mountain Dew: steel cans are only fetching about $105/tonne - which is less than 10% of what aluminum is worth.

A cursory glance at U.S. packaging trends is cause for further concern. According to the June, 1997 issue of Beverage World, Jacksonville, Fla. -based Container Consulting Inc. reports that in 1996, PET plastic's share of the U.S. carbonated soft drink market (by liquid volume of packaged goods) pulled almost equal to cans (48.6% for PET versus 50% for cans.) Indeed, in just two years, the "still-new" 20-ounce PET package had more than doubled its market share, going from 4.9% to 10.2%. "The stage is set for these two packaging formats [cans and PET plastic] to battle for multi-pack customers' dollars," Container Consultants notes. "Over the next couple of years, six-packs of single-serve-size PET will roll onto grocers' shelves, while increasingly distinctive cans aim to demonstrate that material's marketing mettle."

Jackson, like many other observers, says that in order to protect the future of the Blue Box, a municipal waste management strategy should start with a deposit-return system for all beverage containers. There should also be a greater use of refillable beverage containers and producers should be responsible for the full costs of reusing, recycling and/or disposing the materials they produce. "Such a strategy will yield higher diversion and recovery rates, improve environmental protection and save municipalities money," he says.

Alas, selling the soft drink industry on the merits of either deposit/ return systems and/or refillable bottles is tantamount to asking Dracula to endorse garlic and wooden stakes. As long as there is a taxpayer-funded system such as the Blue Box to take care of the soft dirk industry's one -way packages, there's very little incentive to switch.

In any event, the soft drink industry remains philosophically opposed to the user-pay system of deposit/return, which outside of Ontario, is de rigueur. Deposit/return systems, the industry maintains, are hopelessly complicated for consumers and retailers and are nowhere near as easy or convenient as the Blue Box. Just look at the product stewardship literature from the Toronto-based Canadian Soft Drink Association. One illustration depicts an elderly woman entering a store, pushing a shopping cart overflowing with returnable bottles and cans. Some containers are marked 5 cents, others 10 cents, and a case of cans is marked $2.40. Behind the checkout counter, the shopkeeper gazes at the cargo in slack-jawed amazement. With eyes bulging and one hand cradling the side of his head, the look on his face suggests that he's about to attempt an exercise in quantum physics rather than simple arithmetic.

What the CSDA doesn't mention is the success rate of those provinces that have implemented deposit/return systems. In February, 1996, Nova Scotia launched Canada's latest deposit/return system. Every beverage container (with the exception of milk) is subject to a 10-cent "half-back" deposit. When the container is returned to one of the province's 85 Enviro Depots, the consumer receives 5 cents of his original deposit back; 2.5 cents goes to the depot for handling while the remaining 2.5 cents goes to the province's Resource Recovery Fund (at the end of the year, monies collected by the Resource Recovery Fund are dispersed to the municipalities to help them manage environmental initiatives.)

Elwood Dillman, group environment coordinator with Hantsport, N.S.-based Scotia Investments Ltd. (and former head of the Resource Recovery Fund Board) , says the province's beverage container collection rate went from " something less than 20% (in those areas that had a Blue Box system) t o somewhere between 80-90% in just eight months."

Indeed, in the days following the launch of the system, Dillman says "we didn't see a lot of pop cans or juice containers on road sides and corn er lots anymore - people don't like to throw that nickel out the window."

The soft drink industry would also have you believe that maintaining a system of refillable pop containers is actually more environmentally taxing than recycling them. Even though bottles destined for recycling must be collected by the municipalities, compressed into bales and then sent to a recycler (where they are then smelted and reformed into new containers) - this arduous, resource-consuming process is, if one believes the soft drink magnates, less environmentally-taxing than simply cleansing existing bottles and refilling them several times over.

Eva Ligeti, the Environmental Commissioner of Ontario, doesn't buy that argument. In April, Ligeti presented the Ontario legislature with her 1996 annual report. It made for a scathing indictment of the soft drink industry's packaging practices and the laissez-faire attitude espoused by the Ontario Ministry of Environment and Energy. While soft drink firms in Ontario are still legally obligated to sell 30% of their products in refillable bottles, the real figure is less than 2%, and regulators continue to turn a blind eye. "I have asked (Ontario Environment and Energy Minister) Norm Sterling to enforce his laws," says Ligeti. "I don't know why it's so difficult to either enforce the law or, at the very least, change the law."

Tom Brown, a policy and program officer for the Ministry of Environment and Energy's Waste Reduction Branch, notes that between 1987 and 1991, the Ministry of Environment did indeed lay approximately 800 charges (representing about $170,000 in fines) against soft drink companies failing to meet the refillable quota rule. But, since June, 1991, Brown says, the Ministry of Environment has come to the conclusion that the 30% refillable regulation "is unfeasible in its current form . . . it's just not workable to try and force an industry to sell a product to consumers that they (consumers) don't really want."

For now, Brown says the ministry is "looking at a number of alternatives" to the 30% refillable rule. Such alternatives include everything from lowering (or even revoking) the minimum refillable requirements to establishing a deposit/return system for pop bottles like those that exist in other provinces.

Still, if Ligeti had her way, she would like to see a wholesale switch-over to refillable bottles. "Refillable containers can be reused many times, saving resources and money while reducing pollution, litter and solid waste," Ligeti notes in her report. "And handling costs are paid by beverage producers and consumers - not subsidized by taxpayers."

Yet, Coke's Warren maintains that refillables aren't as environmentally-f riendly as some believe, due to the "transportation costs and the energy costs involved with those heavy glass bottles." As well, she points out, "there's a breakage problem with glass."

That glass bottles are heavy and prone to breakage cannot be disputed. But, Valiante of General Science Works notes that when soft drink companies denigrate refillable glass bottles, "they're talking about the Model T of refillable packaging."

Put another way, Coke and Pepsi revere disposable PET bottles - they're cheap, lightweight and travel well - but they loathe having to speak of refillable PET bottles, a type of soft drink packaging used outside of Canada and the U.S. Ten of millions of refillable PET bottles are in use all over Europe, Southeast Asia, Mexico and South America - their market share ranges from 20% to 99% -- and Valiante loves showing off his refillable, 1-litre PET bottle of Coca-Cola he acquired in Germany. Even though it contains one-third more cola, the container is one-sixth the weight of a 750-ml glass bottle. As well, the bottle is entirely compatible with those plants currently refilling 750-ml glass bottles and it can be refilled an average of 20-50 times. As for structural integrity, Valiante likes to perform a physical demonstration. Standing up, he cocks his arm back and with Roger Clemens-like velocity, pitches the bottle against the wall. It ricochets off the paneling and drops to the floor, completely unscathed. "That's the other really great thing about this bottle," he says. "You don't have to worry bout it breaking."

So why aren't refillable PET bottles used in Canada and the U.S.? The soft drink industry says there are several reasons - one being the shopping patterns of North Americans.

"In Europe and South America, people tend to shop daily for fresh produce and breads. This makes returning refillables convenient," states literature published by the Canadian Soft Drink Association. "In Ontario and North America generally, people shop once every 1.5-2 weeks; they also shop once per month for a stock-up shop at grocery stores/club stores. Using the car, they tend to buy 24-can cases of soft drinks."

Other CSDA arguments against refillable PET are just as compelling. For example, the CSDA notes that current consumer preferences and shopping habits "suggest plastic refillable bottles would be no more popular here than current refillable containers are" (even though this packaging format has never been test-marketed in Canada or the U.S.). Another argument used by the CSDA to slam refillable PET bottles is based on the environment: Since trucks would have be dispatched to each retail location in order to collect the empties, this "will create more emissions to the air." Yet, these trucks are already going to stores to deliver cargoes of soft drinks in the first place. How would it harm the environment if the empties are picked-up en route?

This is, of course, exactly what happens at beer stores. Jan Westcott, executive director of the Toronto-based Brewers of Ontario, notes that Brewers Retail Inc. services 429 beer stores and more than 16,000 licensed establishments across the province. Nearly 99% of all beer bottles sold are recovered (and then refilled an average of 15 to 20 times); 83% of beer cans are recovered, and 99% of all cardboard packaging is returned. In a typical year, Brewers Retail will internally recover 450,000 tons of packaging - at no expense to the taxpayer. "We've kept our refillable bottles over time but it's not due to altruism," says Westcott. "Recovering and reusing our bottles gives us a distinct competitive advantage over recycling these containers."

Despite this experience, soft drink makers aren't sold on the merits of a deposit/return or refillable system. Five years ago, fearing that Ontario was going to adopt a New Brunswick-styled half-back deposit/return system for soft drinks, Stuart Hartley, the VP of the Canadian Soft Drink Association, wrote a letter to then-Ontario Environment Minister Ruth Grier. Looking at it now, it's a stunning document. These days, the soft drink industry claims to be helping the environment by rejecting refillables, but in the letter, Hartley puts forward the opposite point of view. The CSDA's proposals include: the reintroduction of single-serve refillable bottles (to provide consumers with the choice of refillables in all sizes); a variety of initiatives to ensure that refillables are attractive as compared to recyclables, including price support, advertising/promotion, and provisions of 6-pack carrying containers for the 750 ml refillable bottle; and the introduction of refillables into the hotel, restaurant and institutional sectors.

As it turned out, a half-back return/deposit system never was introduced in Ontario. In fact, aside from the proliferation of one-way PET containers, nothing much has changed in the last five years. Ontario Environment Commissioner Ligeti says the Ministry of Environment and Energy maintains that it is still consulting with the soft drink industry. "The thing is, they've been 'consulting' for years," says Ligeti. "Personally, I just don't get it."

Consultant Mark Rudolph, the former executive assistant to Jim Bradley (the Environment Minister in the Peterson government) remains a staunch defender of the Blue Box. It was during the Liberal government's reign in Ontario that the Blue box was rolled out, and Rudolph calls the blue box "my baby - and I get really, really pissed-off when people throw stones at my baby."

Indeed, Rudolph refers to Blue Box critics using language that would make a sailor blush. Because groups such as the Toronto Environmental Alliance and the Citizen's Network on Waste Management derive some of their funding from the Brewers of Ontario, Rudolph charges that they are in conflict of interest. Says he: "How can you believe these guys when they are in bed with the brewers?" Rudolph's statement, however, is stunningly ironic given that his wife works for the environmental affairs department of Pepsi Canada.

The soft drink industry isn't the only sector that is drawing the ire of environmentalists and municipalities. Consider the Liquor Control Board of Ontario. Each year, the province (which owns and operates the LCBO) collects more than $38 million in environmental levies alone. Yet the LCBO does not contribute a single penny to the operation of the Blue Box - even though on pick-up day, Blue Boxes are stuffed with near- worthless glass and PET bottles purchased at LCBO stores. In fact, "environmental levy" is a misnomer in that all monies collected by the province go straight into general revenues and not into any sort of environmental fund at all. What many municipal officials find particularly galling is that the LCBO - a Crown corporation monopoly - enjoys an annual net profit exceeding $700 million. Says North York Mayor Mel Lastman: "We (municipalities) are being robbed every day and we can't even call the cops."

That may change. North York is ushering in a tough, potentially precedent -setting new bylaw that is expected to be approved and implemented by late September. Under the city's guidelines, wine and liquor vendors would be required to charge a minimum deposit of 10 cents for each bottle of liquor or wine sold in a container smaller than 375 ml; deposits of $1 would be required for each wine and liquor bottle containing more than 375 ml.

The city is planning on taking advantage of recent Bill 26 amendments to the Ontario Municipal Act, enabling municipalities to exert revenue-raising powers (i.e., service fees, business licensing fees) to pay for services delivered by the municipality.

It's virtually certain there will be a court challenge by the province regarding North York's interpretation of Bill 26. Still, Lastman, who recently spoke before a gathering of about 100 public works and legal experts from Southern Ontario in June, says the city's lawyers are "80% certain" that it (Bill 26) can be used to apply bottle levies. If it does indeed survive a courtroom challenge, the floodgates will no doubt yawn open as municipalities across the province vie for a piece of the LCBO's revenue base.

In the meantime, many observers who advocate a full swing back to refillable bottles for soft drinks can only look with envy to Prince Edward Island. Ninety-seven percent of all soft drink bottles are recovered in P.E.I. That creates jobs and helps to conserve precious landfill space.

"In some ways, in Prince Edward Island, we're so far behind that we're ahead," says Rundell Seaman, chairman of Charlottetown-based Seaman's Beverages, an independent bottler of Pepsi, Canada Dry and private label soft drinks.

Of course, even in P.E.I., there is room for improvement - if only it were allowed. For example, Seaman calls the refillable PET bottle a "fascinating package . . . we talked to Pepsi about using refillable PET bottles, but Pepsi didn't want it."

Given the proliferation of refillable PET in Europe and South America and the fact that the bottle is fully compatible on Seaman's production lines, the question begs: Why not? Is it perhaps because Pepsi doesn't want the refillable PET bottle to succeed in PEI, thereby creating demand for such a container across North America?

Seaman pauses for several seconds. "Sorry," he says slowly, making it clear he doesn't want to do anything that may jeopardize the relationship he enjoys with his largest client. "I'll have to say, 'No comment' on that one."

Meanwhile, back in Ontario, the spawning ground and current stronghold of the Blue Box, the soft drink industry can only lament that ol' Blue never was rolled-out with the same magnitude in Canada's other provinces. And despite the growing number of brickbats thrown at the Blue Box due to its onerous costs and anemic recovery rates, the soft drink industry still clings to the notion that the Blue Box is the most appropriate environmental solution when it comes to handling its billions of containers.

Consider the speech, "Using the Right 'R' in the Right Place at the Right Time," given by Coke's director of public affairs, Tina Warren: Coca-Cola, Warren went on to say, has undertaken several laudable initiatives in its embrace of the environmental "Three Rs" of reduce, reuse and recycle. Examples: Coke's aluminum cans weigh 41% less than when they were first introduced; the weight of Coke's PET bottles has been reduced by 31%. In 1995 alone, 4,000 Coke vending and soda fountain machines were refurbished and put back in service - which had the net effect of diverting nearly 470 tonnes of material from landfill.

Unfortunately, Coca-Cola's "different, better, special" strategy has little room for the inclusion of the fourth - and perhaps most important - 'R': refilling. Then again, as Warren tactfully pointed out to those attending the RCO meeting: "Using the right 'R', in the right place, at the right time works for Coca-Cola," she said.

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