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July 29, 2014

PUBLIC

ACCOUNTS COMMITTEE

The

Committee met at 9:00 a.m. in the House of Assembly Chamber.

CHAIR (Bennett):

Good morning.

This is

a hearing of the Public Accounts Committee of the Province of Newfoundland and

Labrador. I am the Chair of the

Committee. My name is Jim Bennett;

I am the MHA for the District of St. Barbe.

In a

moment I am going to ask members and witnesses to introduce themselves.

Witnesses who have not yet been sworn will be either sworn or affirmed as

they prefer. Some witnesses have

already been sworn on a prior occasion of this session, so it is not necessary

for them to do it again.

Typically, when we proceed we have segments of roughly ten minutes where

different members ask questions. It

is like a question and answer session.

It revolves around, in this instance, the Review of the Auditor General

of the Province of the Waste Management Strategy.

This is found in his annual report for 2014,

part 3.4.

If anybody has any questions and needs to take a break, please ask

accordingly.

I am

going to begin by having Mr. Osborne introduce himself, and I will ask the

Committee members to introduce themselves.

MR. OSBORNE:

Tom Osborne, Member of the

House of Assembly.

MR. K. PARSONS:

Kevin Parsons, the Member

for Cape St. Francis.

MR. PEACH:

Calvin Peach, Bellevue

District.

MR. CROSS:

Eli Cross, Bonavista North.

MR. MURPHY:

George Murphy, MHA for St.

John's East.

CHAIR:

When you are speaking you

need the little red light because it (inaudible).

We will

continue with Mr. Paddon.

MR. PADDON:

Terry Paddon, Auditor General.

MS HILLIER:

Cayla Hillier, Auditor at the Auditor General's office.

MS JANES:

Colleen Janes, Deputy Minister of Municipal Affairs.

MR. MERCER:

Cluney Mercer, Assistant Deputy Minister, Municipal and Intergovernmental

Affairs.

MS RUSSELL:

Sandra Russell, Deputy Auditor General.

MS STANLEY:

Lindy Stanley, Audit Manager, Office of the Auditor General.

MR. CHIPPETT:

Jamie Chippett, Deputy Minister, Environment and Conservation.

MR. GOEBEL:

Martin Goebel, Assistant Deputy Minister, Department of Environment and

Conservation.

MR. DONNAN:

Hugh Donnan, Director of

Communications, Municipal and Intergovernmental Affairs.

MS KELLAND:

Donna Kelland, Assistant

Deputy Minister, Service NL.

MR. SAMSON:

Mike Samson, Chief Executive

Officer of the Multi-Materials Stewardship Board.

CHAIR:

When people are answering

questions, it is important for the light to be on because that is how the

Broadcast Centre knows that you are the one who is speaking.

It is also helpful if you say your name at the beginning because the

transcript is done by Hansard. It

gives them more issues if they do not know who is speaking, they will have to

try to figure out who spoke.

If you

detect a little delay sometimes with the response it is because we have a fairly

sizable array of witnesses. By that

I include the Auditor General's staff as well.

We have eleven people, so the Broadcast Centre might not know which

person is about to respond. There

may be a slight pause in acknowledging who is speaking, who is responding.

One

witness may be better informed, better able to address a particular question

than another. Often the witnesses

who are in the front row are in the front row because they are considered to

have most of the information but quite often in some of the more specialized

areas some of the other witnesses are better informed, so that is why we end up

going back and forth on occasion.

Did

anybody have any questions before we begin?

Ordinarily, we break at around 10:30.

I say ordinarily because it is helpful if all of the members of the

committee have an opportunity in each session to be able to ask at least some

questions, otherwise they may have to sit here for a section, maybe half of the

time and not even get a chance to ask questions that they want to ask.

Sometimes by the time we get to a particular member the questions that

person would have asked have already been asked and answered by somebody else.

So repetition is not overly useful to anybody, although sometimes

elaboration can be very helpful.

Sometimes groups who appear before us want to make some sort of an opening

statement or commentary or explanation, it is certainly not necessary.

It is probably half of the time, and the other half of the time people

just want to get into a Q and A.

I would

like to extend to the witnesses who have come here an opportunity if they want

if anybody had something prepared that they wanted to say, please go ahead.

MS JANES:

Good morning

CHAIR:

Oh, sorry.

Thank God for the Clerk; she reminds me of the things that I forget.

We have not sworn the witnesses yet.

Swearing of Witnesses

Cayla Hillier

Colleen Janes

Mr.

Cluney Mercer

Mr.

Martin Goebel

Mr.

Jamie Chippett

Mr.

Hugh Donnan

Donna Kelland

Mr.

Mike Samson

CHAIR:

So, that being done, I think Ms Janes wanted to make a statement.

Please

go ahead.

MS JANES:

Good morning.

The

four departments and agencies present here today, as partners in the Solid Waste

Management Strategy, have agreed that the Department of Municipal and

Intergovernmental Affairs will provide some opening remarks on behalf of all.

I would

like to thank you for the opportunity; we will keep our comments brief so we can

get to your questions. The

provincial Solid Waste Management Strategy is a horizontal Strategy with shared

responsibility across multiple government departments and agencies.

The Departments of Municipal and Intergovernmental Affairs, Environment

and Conservation, and Service NL, as well as the Multi- Materials Stewardship

Board, all have a distinct and important role to play in the Strategy's full

implementation and success.

While all entities work together, each also has a specific role which may be

important in the direction of some of your questions today.

The

Department of Municipal and Intergovernmental Affairs is responsible for the

implementation and ongoing support of the regional service boards, and in

collaboration with these boards for the infrastructure investments necessary to

achieve the goals and objectives of the Strategy.

The

Department of Environment and Conservation is the department responsible for the

Environmental Protection Act. As

such, their role in this Strategy is to develop, interpret, and provide guidance

related to environmental standards, to ensure such standards enable proper

stewardship of our lands and waters, and to support the other departments and

the MMSB on implementation.

Service

NL serves as one of the government's primary regulatory bodies, and in terms of

the Strategy, is involved in permitting and inspection of waste disposal sites,

as well as monitoring of and enforcement against illegal dumping in co-operation

with municipalities across the Province.

The

Multi-Materials Stewardship Board is the primary entity responsible for the

development, implementation, and management of waste diversion and recycling

programs on a province-wide basis for specific waste streams designated by the

government. This includes marketing

and educational components.

The

Strategy identified a number of goals which it aimed to achieve by 2020.

The initial focus of implementation was the limitation of open burning,

closure of teepee incinerators, consolidation of community curbside collection

and waste disposal sites, and the establishment of lined or equivalent to lined

landfills at the host regions.

Since

originally envisioned, there have been some adjustments to the plan as with the

passage of time technologies and processes have changed.

Good examples of this include the move from three to two landfills on the

Island, and improved transfer station technologies that have made this a more

viable and more economical option for the Province.

Further refinement may continue to be required on this basis as we work

towards the goals of the Strategy.

While

infrastructure investments and identification of new needed infrastructure

continues to progress in all regions, we are also moving into later focus areas,

that of recycling and composting facilities.

It is these later phases that will help us make further progress in the

waste diversion goals of the Strategy.

In the

area of composting, Dillon Consulting was engaged in the spring of 2013 through

a contract to prepare a report on potential solutions for organics composting

for the Province. The Department of

Municipal and Intergovernmental Affairs, the MMSB, and the regional service

boards will use the report to inform their work, collaborate on the development

of an implementation plan for composting solutions.

This report is nearing finalization; and, in fact, is expected to be

completed in the coming week.

While

this work is ongoing, the MMSB has implemented several initiatives to begin

engaging communities, businesses, and households in organic waste management and

are making progress with respect to diversion.

As departments and agencies of government, we will continue to work with

our communities, regional service boards, waste management authorities, and all

residents and stakeholders as we proceed towards full implementation of the

Strategy by 2020.

certainly welcome your questions this morning.

Depending on the nature of them, we will try to ensure the most

appropriate individual responds. It

may be multiple individuals in some cases, given the nature of the Strategy.

We will certainly respond as comprehensively as we can.

Thank

you.

CHAIR:

Thank you Ms Janes.

We will

begin with Mr. Osborne.

MR. OSBORNE:

Thank you, Mr. Chair.

The

goal of 50 per cent diversion by 2015 is obviously not going to be met.

Can you tell me what percentage of diversion we are currently at in the

Province?

MS JANES:

Today we are at 27.6 per

cent.

MR. OSBORNE:

Okay.

Open

burning; if I remember correctly, there are thirty-six sites remaining for open

burning in the Province. Is that

correct?

MS JANES:

have a percentage number. There may

be another individual here who can speak to the number of sites more

specifically. I believe Cluney is

searching for the number there.

MR. CHIPPETT:

There are about thirty-six

sites in total, and that includes the six remaining teepee incinerator burning

sites.

MR. OSBORNE:

All of the teepees are not

gone? I understood the teepee

incinerators had all been closed.

There are six remaining?

MR. CHIPPETT:

The six that remain are in remote areas.

I think five of those are on the South Coast of the Island, and the other

one is in Mud Lake in Labrador.

There was allowance in the Strategy for continuation in remote areas, otherwise

the remainder are closed.

MR. OSBORNE:

Okay.

there any composting carried out now at all in Labrador?

MR. MERCER:

Not to my knowledge, unless it is backyard composting or at a small scale

community level, but nothing that we have organized at this point in time.

MR. OSBORNE:

Okay.

understand the challenges with waste diversion in Labrador based on population

and geography and so on, the transportation of waste, but it would seem to me

that composting in Labrador would solve probably 30 per cent of, or greater

even the fibres that are too costly to transport to the Island or elsewhere

could be composted. You would

probably be well above the 30 per cent mark if you were to compost in Labrador.

Why has that not been a bigger focus of the waste management Strategy?

MR. MERCER:

Our initial focus on the Strategy was obviously the greater population, and the

focus on landfill development, curbside collection, getting nearly 600

communities to collectively work together so that we could deliver the most

economical waste management service.

The focus thus far has predominantly been on that type of organization,

getting regional service boards, getting operational entities in place, getting

people co-operating and working together.

From

the beginning, we looked at compost as being something that we would do in the

latter half of the Strategy. As

Colleen had referenced, in the spring of 2013 we embarked on a composting study.

That study will help inform our composting plan that we will roll out

over the next six years or so. That

is the reason why we have not moved specifically on composting in Labrador at

this point in time.

Just to

give you an idea of what we have done in Labrador; Labrador has four regions.

In Labrador West a landfill has been developed.

A teepee incinerator in Wabush has been closed.

There is one well maintained waste management facility now in Labrador

West. It has all the elements of a

modern waste management facility, with exception for compost.

We expect within the very near future that we will have that piece of

infrastructure in place as well.

The

North Coast of Labrador is another region that has been a bit more of a

challenge. You have seven or eight

isolated Inuit community governments up there.

We have met with them on a number of occasions to try to engage a

consultant through an RFP process to look at what might be some of the options

for those isolated north coast communities.

At this point in time we are waiting for one of the community governments

to come forward to us to be the sponsoring community for us to engage a

consultant to take a look at those options.

Central Labrador, we just finished a study for the Happy Valley-Goose Bay area.

We expect coming out of that study, we will be looking at the long-term

plans and the long-term infrastructure that will be in place there over the next

couple of years.

There

has been a study completed for Southern Labrador as well, from Cartwright to the

L'Anse-au-Loup border. The piece of

work that was done by the consultant is looking at consolidating all the

landfills up there I think there are seven or eight of them into a single

landfill with consolidated curbside collection.

They will have some recycling and some composting attached.

MR. OSBORNE:

I am sorry, Cluney.

Where did you say that was?

MR. MERCER:

It is in Southern Labrador.

It would be from Cartwright down to the Quebec border.

From L'Anse-au-Loup to Cartwright would be considered the Southern region

of Labrador. Labrador has four

regions.

MR. OSBORNE:

Okay.

The

study of options for organic waste; in the response to the questions that were

sent out by the committee it was indicated that study should be finalized by the

end of May and will be available to committee members.

In your response, did you mention that that is not quite complete yet?

MR. MERCER:

Correct.

We are expecting the final report this week.

The consultant is committed to getting it to us by July 31.

When we did a formal response, we were expecting a report near the end of

the fiscal year. We did get a

report. There was a need for some

additional work that we sent them back to do at that time.

Initially, we are looking at five options.

They met with the steering committee and we proposed an additional two to

be further looked at. They went

back and examined those. We did get

a revised report back around the end of May, and that report contained well,

they examined the extra options that we had identified.

It contained some statements that needed further clarification.

We went back with a list of clarifications to them in early May, and that

work is nearing completion now.

They have committed to having that report to us by July 31.

MR. OSBORNE:

Okay.

The

Auditor General had determined that there was no projected cost of composting,

or that it remains uncertain. Does

that report clearly define the projected cost for composting for the Province?

MR. MERCER:

Since I have been involved

in the file, around 2009-2010, we started to build as we gathered more

information. We have completed

fifty-plus studies and various analyses over a period of time, so we built a

cost projection. In the cost

projections that the AG's office was carrying I think they were carrying a

projected cost of $315 million included in that cost there is $76 million

being carried for composting facilities.

carried those and we listed those as a medium risk because we had not completed

our composting study, although we had visited numerous composting facilities

throughout North America. We had

learned what was working and what was not working, what could work on a large

scale, what could work on a small scale.

So in the cost projection we built in $76 million.

Based on the information we have seen early in the composting report, it

would suggest that is probably a conservative number for us.

MR. OSBORNE:

Is there any estimate of the

total amount of composting now taking place in the Province?

I understand the vast majority of composting is as a result of individual

and homeowners' backyard composting.

Can you

give me some indication as to the amount of composting that is taking place, and

what is commercially composted versus composted through backyard composters?

MR. SAMSON:

We do not have a number at this stage of the game, Mr. Osborne, that you could

pin on the total amount of composting happening; however, since the inception of

the backyard composting program and the MMSB's involvement with it, for example,

we have been involved with communities in the distribution of approximately

30,000 backyard composters. Of

course, the difficulty is determining on a home-by-home basis how many of those

are still in use and how extensively they are used and that sort of thing.

MMSB

has also been involved in, along the way, a number of compost pilot projects.

We are currently involved in a project with Burin Peninsula Waste

Management where approximately 300 homes in the community of Grand Bank are

diverting organics sorted at home, collected at the curb, and then composted in

the facility at Grand Bank. If

memory serves, I think that is somewhere in the order of 500 tons.

So it is a relatively small-scale operation.

There

are a number of other composting pilots at the community level that have

occurred; one in Holyrood. I think

we have done some work in Cape St. George.

We have done some piloting work in the community of Harbour Breton, and

in Holyrood. We have been involved

with an in-vessel composting technology at Grenfell College in Corner Brook,

where you are seeing the majority of organic waste on the Grenfell Campus being

composted on-site using an in-vessel technology.

It is

MMSB's place, or we see it as our place, and one of our roles in the Strategy is

to test these things on a pilot basis and see.

As things now stand, there is no way to actually measure the volume

because of course none of this material in backyards is being weighed and

reported in any kind of a reliable way.

MR. OSBORNE:

Okay.

The

backyard compost program started back in 2005, I think.

MR. SAMSON:

Yes, at least that long ago; that is correct.

There

have been 30,000 backyard composters distributed to households in Newfoundland

and Labrador through MMSB's partnership with communities.

MR. OSBORNE:

There is no way of measuring

the success of the composters that have been provided to residential consumers?

MR. SAMSON:

Not really.

We do not have a system in place that allows you to measure what

individual homeowners are putting in their composters on a day-to-day basis.

We do believe that some 50 per cent or 60 per cent probably of those

composters are in active use. Those

are anecdotal reports from talking to communities and doing check backs as we

normally do. Obviously there is no

system in place that allows you to weigh on a daily basis what an individual is

putting or not putting in their backyard composter.

CHAIR:

Mr. Osborne, we should go on

to Mr. Parsons. He is afraid you

are going to ask all the composting questions.

MR. K. PARSONS:

He is going to ask all the

questions.

Good

morning. It is nice to have you here on another beautiful day in July.

I have

some questions. First of all, I

want to make a little statement that I grew up in the Flatrock area.

We used to have a regular trip where we used to go to Robin Hood Bay.

Most times when you went down there, your truck either came out of there

with a flat tire or you were up to your knees in mud.

On a

regular basis over the last number of years, on Saturdays it is a treat almost

to go down to Robin Hood Bay, to pick up your coffee and wait in the long

lineups with your trailer behind, and to see what a great facility it is.

We have come a long way. I

know that growing up in the area where I grew up, in Flatrock, there was a dump

in Flatrock, there was a dump in Pouch Cove, and there was a dump in Torbay.

We have

come a long way when it comes to waste management, in this area anyway.

I know there is a lot of Newfoundland's

geography where you are down and up; and transportation to get to facilities and

to try to get it all in two areas is massive, and I understand that.

I just

want to get back to, while I have it on my mind here, composting.

I think that on composting we should be doing a little bit more on the

educational part of it. Are we

doing anything in our schools with our children and to promote it?

MR. SAMSON:

Yes, MMSB has been very

involved in partnerships with community organizations and schools on public

education and outreach on solid waste management generally, on waste reduction

issues, and of course on composting.

We deliver composting workshops in schools.

We deliver composting workshops in communities that partner with us

annually in our backyard composting program.

There is a significant amount of outreach.

There

is information, of course, available on the MMSB Web site.

We believe that the pilot work that we have been doing at the community

level is contributing in a significant way to the awareness of the importance of

organics management in Newfoundland and Labrador.

MR. K. PARSONS:

I know first back in the

1980s it was not a very popular thing to recycle.

Some people did it, and some did not.

As our children got more educated and realized the importance, it kind of

taught the grown-ups, their parents, and grandparents.

I think it could work the same way with composting.

It is

important that we work with the communities, like you said earlier.

I know in the community where I am from they sell the composters, and it

seems like nearly every household down there now has one.

I think it was due to the advertising by the community on the importance.

They had them right out front, in front of their town hall, showing they

were for sale. I think the more

advertising, the more education we do when it comes to composting, will be

important for everybody down the road.

I know

that you said 27.6 per cent right now is where we are.

What is our goal by 2015?

Where will we be, do you think, in 2015?

Will we be handy to the 50 per cent, 35 per cent, 40 per cent?

MR. SAMSON:

We are at 27.6 per cent today. That

represents a movement from somewhere in the order of 7 per cent at the outset of

the Strategy. Ultimately, the

diversion numbers are dependent upon and linked to the completion of the

infrastructure you cannot divert material if there is nowhere else to send it

and in the implementation, development, and marketing of the programs that

feed that infrastructure.

The

next big gains in diversion will come from the extension of curbside, we

believe, in Central Newfoundland, when the materials handling facility comes on

stream there. When curbside

eventually gets implemented universally on the West Coast there will be

significant additions to that.

We also

anticipate additional progress on diversion related to organics.

Organics is a large piece of the overall waste stream, particularly from

a tonnage perspective. The

implementation of the construction of infrastructure decisions that will have to

be taken by government, the building of the infrastructure, the implementation

of the programs, will be a significant gain.

MMSB's side, we will continue to work on and introduce new Province-wide

diversion programs, not unlike the used beverage program and the used tire

program that we currently operate, or the Extended Producer Responsibility

programs that we oversee.

Electronics and used paint are other examples.

The next big gains will come from, number one, the extension of curbside;

and, number two, decisions in development of implementation on organics.

That will be dependent upon the completion of the infrastructure.

MR. K. PARSONS:

When the Strategy was first

released, it was in 2002 and we had a budget of $200 million for the cost of the

total project. Now it has gone to

$316 million. Why wasn't it

changed? In 2002 - the cost

obviously changed when the Strategy really came in and was released in 2007.

Wouldn't you think there would be an estimate done to say, okay, we are

gone five years and the cost of doing things is a lot higher than what it was in

2002? How come that wasn't changed,

your first original estimate?

When I

read it that was the one thing that struck me.

If in 2002 you come out with a Strategy that says it is going to cost

this much, and by 2007 you are releasing your Strategy, there should be some

kind of adjustment done saying we are five years in and the cost of doing things

are a lot different than what they were in 2002.

How come that wasn't changed?

MR. CHIPPETT:

I will speak to the 2002

number. The Strategy had a range of

$150 million to $200 million in it.

I characterize that as a conceptual estimate based on the types of

infrastructure generally expected at the time.

Obviously a part of the new number is the fact that specifics are known about

what is going to be at each waste management site, what the actual programming

is, what size, and what programs are going to be delivered in those pieces of

infrastructure. You would refine

estimates over time.

I can

speak to that original estimate.

The re-release of the Strategy in 2007 was done through Municipal Affairs, so I

will pass that one to my colleagues in the front row.

MS JANES:

Certainly the $200 million,

as Jamie referenced, was conceptual at the time.

I will elaborate a little bit on where we have come from there.

Cluney may have a level of detail that he can add to it as well.

terms of the goals of the Strategy, working with the communities and the

regional service boards, the implementation plan was effectively built from the

ground up. Until we engaged those

communities, until we engaged those regional waste management committees and

subsequently boards in terms of what the infrastructure requirements or plans

were in their regions, it was difficult to add precision into the cost.

In 2007

there was a continued carry forward of that $200 million estimation.

Over the course of time, as we have deepened our work with communities

and our regional service boards, and completed numerous studies over that period

articulating what the infrastructure needs and requirements were, we are able to

provide more refinement to what those costs are, in our cost projections, and

move more into an area that we have a fair degree of comfort on; the one

exception remaining at this point being in the area of composting, which Cluney

has already spoken to that. The

current report underway will help validate some of our cost assumptions there,

and add another layer of comfort in precision to our projections.

I don't

know if Cluney has any additional detail that he feels we should add there.

MR. MERCER:

I wasn't there in 2007 but I

can only assume, looking at the amount of study work that would have been

completed between 2002 and 2007, there was basically none.

The level of detail in terms of the architecture of what infrastructure

was required had not changed. I can

only assume that the $200 million was just carried as it was carried in 2002.

As soon

as, though, the picture started to become clear in terms of what the

infrastructure requirements were going to be, then I took it upon myself to

build a detailed implementation cost plan on a region-by-region basis.

That plan has varied over the last six years I have been involved with

the file. At one point in time it

was in excess of $400 million because we were still looking at three lined

landfill sites on the Island.

With

only two now, and not incurring $80 million to $100 million capital costs to put

facilities on the West Coast, our number is back down closer to the $300 million

range. That is about the only

explanation I can give you for 2007.

MR. K. PARSONS:

It just seems like, to me -

and you are very familiar with this now, Cluney - whenever you do a project, and

the project starts one year, the longer that you wait, even if it is just one

year, you can look at the cost estimates just rise like you would not believe.

I mean most of the projects that I know in my district with Municipal

Affairs start off, and you can guarantee within a year it is probably a 20 per

cent increase. It just seems very

strange that you would use the same figures in 2002 that you would use in 2007.

I understand - but you can understand where the costs are going and stuff

like that.

MR. MERCER:

When I started to build the detailed cost estimate on a region-by-region basis,

then projecting out to 2020 for full implementation of the Strategy and

recognizing that some of that infrastructure is probably going to get built

within the last two or three years of the implementation period, what we did is

we carried a 5 per cent escalation on out years.

If you

were to look at my implementation cash flow plan, if you want to call it that

which I think we provided to the AG, and I think we may have provided it to the

Chair of the Committee those numbers actually carry a 5 per cent escalation.

Typically we are finding that type of escalation in the construction

industry since 2006-2007, really.

MR. K. PARSONS:

The AG found that a major

problem with most of the oversight was that the steering committee was not

meeting on a regular basis. Since

the AG report, is there emphasis on making sure that all departments are on the

one page and meeting at a regular time so that they can make sure there is

proper oversight on the projects?

MR. MERCER:

I guess the short answer to your question is yes.

Since January 2014 we have met three times, actually.

That is not to say that there was not appropriate oversight with respect

to the Strategy in prior years.

You can

imagine, a lot of what we do is about infrastructure development.

To build a material recovery facility, like we are currently in the

process of building in Central Newfoundland, is a two-year construction project.

There may be some frequency of meetings leading up to certain decision

points within the Strategy. Then

you spend two years building things where there are not a lot of decision points

that need to get made from a horizontal collaboration perspective.

In the

six years that I have been involved, at times we have met several times during

the month, and at times we have gone many months without a meeting.

That is not to say that during that time frame we did not have

significant discussions with maybe one of the partners who were involved.

The decision points along the way maybe only would have involved

Environment and Conservation. At a

director level or an ADM level in Environment and Conservation and Municipal and

Intergovernmental Affairs, there would have been significant conversations that

would have taken place but not in the form of structured meetings.

would have exchanged updated briefing materials and those sorts of things

through that period of time. In the

six years that I have been there, there have been at least three or four Cabinet

submissions where we would have provided an update to the Strategy.

There were presentations to EPC and other things that we would have

worked on collaboratively.

suggest that there was not any oversight, I think, is misleading.

CHAIR:

Mr. Murphy.

MR. MURPHY:

Thank you, Mr. Chair.

Good

morning to everybody on the other side.

It is nice to have you here to get some questions answered as regards to

the Auditor General's report.

I will

start off by saying that after hearing some of the comments from the other side,

Mr. Samson briefly touched on some continued improvement and expansion in

Province-wide recycling. If I can

ask the question of Mr. Samson, under this category we have the example of the

Electronics Recycling Program that is started, can you update for us what the

organization is doing to access recycling products in rural Newfoundland and

Labrador?

We know

that there was a particular bone of contention as regards to consumers paying

the fees but still not having access to areas where these items could be

recycled. I am just wondering if I

can get an update as regards to the progress of that.

MR. SAMSON:

Of course, electronics is an

Extended Producer Responsibility program operated on behalf of brand owners in

the electronics business by a national organization called the Electronic

Products Recycling Association.

They have a stewardship agreement that has been approved by the MMSB and its

board. What it requires is that

there will be ultimately, I believe, nineteen permanent locations for collection

throughout the Province.

That

permanent collection infrastructure will be supplemented by an annual series of

mobile collection events, not unlike what was traditionally done without

household hazardous waste, for example.

Where we are today is that with, I believe, the possible there are a

couple of the designated permanent areas where I know EPRA has been having some

challenges finding a partner to actually handle the materials.

That is being dealt with in the short term by the scheduling of mobile

events.

There

are, in fact, more than nineteen. I

believe there are twenty-odd permanent collection locations now operating in the

Province because EPRA, working with the waste management authorities, has begun

to locate infrastructure at transfer stations and landfill sites.

If you

go to Central Newfoundland, for example, EPRA has an arrangement with Central

Newfoundland Waste Management Authority that has electronics collection

facilities available at all seven transfer stations and the main site at Norris

Arm. There are eight, plus a

variety of arrangements with green depots and others.

We are

still in year one. The program is

about one year old. I think it

rolled out in August of last year.

We anticipate that these issues will be resolved in the relatively short term

and that as required in the stewardship agreement, all consumers in the Province

will have reasonable access to the electronics recycling program.

MR. MURPHY:

Mobile collection, I am

curious about how the mobile collections would actually operate.

For example, are we going to have a mobile collection station set up, I

will say, at a more remote area of the Province?

For example, Harbour Le Cou, the closest point to that for somebody to

drop off a piece of electronic recycling I think is probably Port aux Basques.

It is a little bit of a hike for a consumer to actually take it and

deliver it to Port aux Basques.

I am

wondering about the simple aspect of mobile collections too, because I see a

problem at the same time. While we

are doing recycling for the benefit of the environment, we are wasting an awful

lot of energy at the same time to get these items picked up.

Do you see where I am going with it?

I am just wondering if can you give me some more detail on the mobile

collections, how that is going to work for more remote areas of the Province?

MR. SAMSON:

Well, what will happen is on

an annual basis there will be a series of mobile collection events which will

occur in areas of the Province which are not the same as the areas where the

permanent infrastructure is located.

Those collection events will generally be operated by EPRA, oftentimes in

partnership with a local organization.

The

example I would draw upon would be the program that MMSB operated for many years

on mobile collection events for household hazardous waste.

It is a decision taken in the spring that there will be fifteen or

eighteen mobile collection events, they will occur in the following places in

partnership with the following organizations.

Appropriate marketing will occur and public information made available,

and people will be provided an opportunity to drop off their electronics.

The

challenge, Mr. Murphy, in a jurisdiction like Newfoundland and Labrador as it

relates to recycling, and not only electronics recycling but also paint and

household hazardous waste, tires, beverage containers, is that with a lot of

geography many communities of relatively small population, widely dispersed, the

economics are often very challenging.

What we have done is we have, as MMSB has done in its beverage program,

sort of structured it that way. The

rule of thumb is you do the best that can be done to provide reasonably

convenient access for all residents of the Province to the program.

MR. MURPHY:

Okay.

The

cost to the electronics recycling program that are charged to the consumer on

their bill whenever they buy a TV or anything, right now, is that going to be

the only cost that consumers are going to see as regards the future operation of

mobile collections, or are we going to see these fees increase too eventually?

MR. SAMSON:

You will. In fact, I have been

advised by EPRA that the fees in the display category well, I should just back

up a little. The fee structure in

place for EPRA in Newfoundland and Labrador is a harmonized fee structure which

is the same in Ontario, Quebec, PEI, Nova Scotia, and Newfoundland and Labrador.

It is the same fee structure.

MR. MURPHY:

Okay.

MR. SAMSON:

What we have been advised,

and there had been an issue around the charge on the mid-range size televisions,

the thirty-two inch, once you went over twenty-nine you were paying $42.50.

There will be a change to that, I believe, in October.

What you will see is the smaller TVs will continue to be at $12.50, I

think, as it currently is. The

medium-sized TVs, the twenty-nines through, I believe, forty-twos or forty-sixes

that charge will be dropping to $23.50.

Then the larger TVs, the big fifty-fives, and sixties, and eighties, on

sort of the luxury end of the market, I think will see a marginal increase of

about a dollar.

All of

that money, of course, goes to the Electronic Products Recycling Association.

None of it is, notwithstanding that it has been construed as such, it is

certainly not a tax. None of that

revenue accrues to MMSB or to the Government of Newfoundland and Labrador.

The agreement provides that the fee structure in the financial statements

of EPRA, which are public, will be reviewed on a regular basis, and fees will be

adjusted to reflect the actual operational costs of the program in the

jurisdiction.

One of

the challenges with electronics, as you can appreciate, is that in the early

days of the program you are not only taking things that a fee had been paid on,

you are taking my father in law's thirty-one inch Trinitron that he bought

thirty years ago and did not pay a fee on, but now EPRA is taking it and

incurring the cost to handle it. In

the early stages of a program what you have is a bump in volume of materials

upon which no fees have been paid.

They are called in the business legacy products.

Once

you move through the bump of legacy products, and that usually takes a handful

of years at the beginning, then there is room generally for adjustment, and we

would anticipate adjustment in the fee structure in this jurisdiction.

MR. MURPHY:

Okay.

there is a good chance, obviously by what you are saying, that we are going to

see some of these numbers jump or some of these numbers drop, I should say,

that are charged to the consumer right now.

MR. SAMSON:

We would anticipate that the

numbers are more likely to drop than to jump, yes, but it will depend on the

performance of the program on an annual basis.

Again, this is an expensive jurisdiction to run these kinds of programs

in because of the transportation challenges and those sorts of things.

MR. MURPHY:

I am curious, too, at the

same time. Did waste management do

an assessment, for example, on the continuation if you will, or probably a

different way of handling electronics?

I have

read studies on actually taking electronics and handling them at the dump site,

number one, and having them collected there.

I have also read studies on the simple aspect of leaving electronics

where they are and burying them together in one site.

The environmental cost, for example, of breaking down a piece of

electronics into a recycle form again takes an awful lot of energy at the end

use, and of course the only beneficiary from the recycling would be the

industry.

I am

curious about whether the waste management group actually looked at studies as

regards the cost of leaving it in the ground so to speak, versus taking it and

costing consumers and taxpayers, if you will, adding somewhat a financial burden

in some cases to the industry and possibly to consumers again in end cost and at

the same time the cost to the environment in actually recycling these items.

Have you seen any studies like that?

MR. SAMSON:

There was a lot of work done

by the Canadian Council of Ministers of Environment back in the last decade, as

they developed a national framework for the implementation of Extended Producer

Responsibility. The idea behind

Extended Producer Responsibility is that responsibility for the cost of managing

material through its whole lifecycle should properly accrue to the people who

produced that material, who distribute that material, and ultimately those who

consume that material.

Electronics was identified as a priority product group under the EPR framework

adopted by CCME back in 2009. The

issue with electronics is that much of it is hazardous when landfilled.

MR. MURPHY:

Right.

MR. SAMSON:

You have components of heavy metals, mercury, lead, cadmium, lithium, the

built-in battery stuff and all of that.

It is important material, we believe, and the studies would show that

this is important material, to keep out of the landfill.

Therefore, the decision was taken here in Newfoundland and Labrador; the

government took the decision to go in an EPR direction.

The

brand owners designated EPRA, which is a national organization that meets all of

the required environmental standards in terms of the collection, dismantling,

and all that sort of stuff. We

wanted all to be very sure here in Newfoundland and Labrador that these

hazardous materials produced here in this Province were not ending up somewhere

else. We have all seen the things

on TV about where sometimes things end up being broken down and recycled in the

Third World, not subject to appropriate regulation and that sort of stuff.

All of

the material that comes from here goes through the EPRA process.

Each stage of the process has been subject to review and certification.

It happens in the safest and most environmentally sensitive way possible.

We are comfortable that it is the correct answer, and it is.

In fact, nine of ten provinces are currently dealing with electronics

through an EPR approach.

MR. MURPHY:

Okay.

Thank you for that.

wanted to come back again to the Auditor General's report, too.

I wanted to come back to the 50 per cent diversion figure that has been

given out for quite some time. In

2002, of course, we saw one number and a particular goal to be met by 2010, that

same number. Then in 2007 that

number was set again for 2015 at 50 per cent, and right now we are at 27.6 per

cent.

I know

you are having an issue as regards to infrastructure being put in.

Is there anything else holding it up besides the simple fact of the

placement of the infrastructure?

Why is it that we are taking so long putting this infrastructure in place if we

had the goal of 50 per cent diversion?

It has been seven years now; I figured that somebody probably would have

had a plan put in place when they first initially met the target.

What has been happening that we have not been meeting those goals?

MR. MERCER:

I will repeat what I said earlier in

terms of the initial six years or since 2008 really.

I know the Strategy was re-endorsed in 2007 and was provided some funding

to do some meaningful infrastructure work.

There was a significant amount of time, as you can imagine, to organize

the communities.

I have

always said that in my twenty-eight year career in government I would suggest

that the Waste Management Strategy is probably the largest regionalization

effort ever undertaken by government.

Getting 615 or so communities to agree to work together so that you have

fifteen or eighteen communities agreeing to participate in a curbside collection

contract, establishing committees to establish what a governance structure would

be for a regional service board that ultimately has the authority to operate

waste management facilities and to apply service fees to the residents who they

are providing the services to, we had to do all of that first.

Before you start building infrastructure you had to do that.

You cannot have infrastructure without having a governance structure in

place to administer it.

We have

only been really six years into this Strategy.

We have six out of eight regional service boards on the Island in place.

I expect to have the other two in place in the not-too-distant future.

We have all the governance in place. We

have at least half of the infrastructure in place and we have a plan for the

other half. We have seven years

left to do it. That has been our

focus.

Diversion, obviously, as Mike had indicated, is heavily dependent on

infrastructure. You talk about

backyard composting; well, backyard composting gets out about 5 per cent to 7

per cent of your organics. It is

yard, leaf, and food scraps for the most part.

It is not the other 25 per cent of the organic stream that you can

compost in your backyard; otherwise you are going to have some major issues.

You need larger scale composting facilities to do that.

The way we implemented the Strategy was to focus on that earlier stuff

first. Once we have everybody

working together, then we will deal with the composting piece.

CHAIR:

Mr. Peach.

MR. PEACH:

Thank you very much, Mr.

Chair.

I have

some questions. Most of the

questions that I have are questions I have raised with some of your staff

before, with concerns from my district - from a lot of people in my district,

really.

First I

want to ask a question about the user fee that is being charged to the

individuals, the homeowners. In my

district I have a lot of cabin owners who come from all over the Eastern Avalon,

really. I will name one area in

particular, which is Spread Eagle and Old Shop.

The cabin owners there, if they have one bag of garbage, they take it and

throw it in the trunk of their car and carry it home, but they are still being

charged a fee the same as the homeowners in Old Shop and those places.

We do

have about a dozen cabin owners there who are full time and they have no

question with the fees being charged, but we have quite a few people who are

living there probably three weekends, or perhaps four weekends, out of a year

that they go out there. There has

been a big uproar, I would say, from those people.

They

have been talking to almost everybody they can talk to on the board who are

making the decisions. They are

talking about the unfairness. Not

the unfairness of being charged a fee at the same rate as everybody else, but

the unfairness that they only have a bag of garbage that they throw in their

trunk and carry home and they are still being charged the fees the same as

people who are there full time.

We also

have homeowners whose homes are vacant and they are gone away to Toronto or Fort

McMurray or somewhere like that.

They are gone year-round. Some

homes have been vacant for two and three years, but they are still being charged

a fee for garbage collection.

Can you

respond to any of that, and why that would be?

I know they have a board that makes the decisions and sets the fees.

We have been requesting that they review the process and see if there is

not some kind of a way that they can eliminate some of the costs to those

people. They are saying that we are

living in Conception Bay and we are paying a fee in Conception Bay for garbage.

We have a cabin out there that we go out for probably a couple of

weekends, and then we are still charged a total fee.

They have no problem with charging a fee, but they feel it is unfair to

be charged the same fee as the homeowner who is there in the community.

MR. MERCER:

Yes, under the Regional Service Boards Act that is the piece of legislation

that gives the regional service boards the authority to operate waste management

infrastructure, provide the service, and to charge appropriate fees they have

the authority to charge a fee to anyone in a municipality, in a local service

district, or in an unincorporated area.

While it is a decision of those boards in terms of the fee that would get

applied to a seasonal property owner, it is their decision to make.

I use

the same analogy, if someone is away from their home for two or three years and

lives in a municipality; chances are they are going to pay their property taxes.

If their water and sewer runs by the door, if you are hooked up, or even

if you are not hooked up, you are going to pay a water and sewer tax or you are

going to pay a water and sewer fee.

The

thing that a board has to consider is that if you go into an area and I will

just use maybe Deer Park as an example which has a significant cabin area.

It has probably thirty or forty permanent residents there, but it has

another 1,000 seasonal properties.

They are looking at the provision of waste management services for the entire

region. If you create a situation

whereby people can sort of opt in and opt out, if you get a significant number

of people say I am going to put my garbage in the back of my truck and I am

going to take it home, then it really makes it uneconomical or really expensive

to provide that service to the dozen or so who says yes, I will come by and pick

up my waste.

The

waste collection truck is going to roll by the door, and a big part of the

overall cost that they will pay on a regular basis is that collection service.

From the work that we have done, the two big elements of cost to the

homeowner is the operation of landfill, which is about a 35 per cent to 40 per

cent cost of the overall household cost, and the curbside collection piece.

Getting it collected and getting it to the landfill is about another 35

per cent. Seventy-five per cent of

the cost is borne in those two pieces alone.

That is maybe some of the rationale that some of the boards are using to

have established the fee structure that they have established for seasonal

property owners.

MR. PEACH:

Just a comment on what you

mentioned about the property owners and paying property taxes and water and

sewer taxes. In most of the areas

that I am talking about there are LSDs so they do not have any water, they do

not have any sewer, and they do not have any property taxes.

For those who do pay property tax in a town, normally what they will do

is if they are gone away and they have the doors barred in the house and nobody

living there, they will request an exemption from fees and have their water cut

off. That happens a lot of times.

This is why they are using their arguments for the cost they are accruing

for the collection.

When

the dumpsites closed out and I will go down as far as Whiteway, because I do

not know if it goes beyond that, to we will say Chance Cove, Fair Haven in my

district - two years ago, when the dumpsite closed out, there was supposed to be

a transfer station or a drop-off site for household furniture, washers, dryers,

et cetera in Whitbourne. Two years

have gone by now and there is still no site.

People are really, really, concerned about the cost they are accruing

there. They are paying their fee

for garbage collection and then they have to take their household furniture or

whatever and go to Robin Hood Bay with it, or they have to go up to Placentia,

or some have to go as far as Sunnyside.

Can you

give me any light on when that facility should be built?

I know that you picked the location there.

That lately has changed, so what are the plans there now?

What is the future plan for that transfer station or drop-off station?

MR. MERCER:

Yes indeed in the Eastern

region there were nine of those public drop-offs.

For the information of the committee members, a public drop-off is not a

drop-off for regular household waste; it is for bulk items such as mattresses

and your hot water tanks, your white metals, some C and D material and those

sorts of things. It would be a

lay-down area basically where you put it in a pile and then at a certain point

you load it and you transfer it to a landfill, or in the case of metal you may

auction it off.

Yes,

there is still a plan for a public drop-off in that area.

That is the only one left in the Eastern region not built.

I know the consultant who has been engaged by the Eastern Regional

Service Board to look at potential sites out there really scoured all areas out

there. The Peak Pond area was one area that they had identified for that.

That later was tangled in a proposed composting project that the Eastern

Board was proposing as a pilot project.

There

is still work ongoing. As a matter

of fact, there is a piece of land being looked at right now which is right

adjacent to the Transportation and Works depot just off the Trans-Canada Highway

there.

MR. PEACH:

In Whitbourne?

MR. MERCER:

Sorry, in Whitbourne. It is

appropriately zoned as industrial, so we have been having some discussions as of

late as a matter of fact, even as late as yesterday with Transportation and

Works in terms of whether or not they need that space.

We have identified I think about thirteen hectares there that might be

suitable, and certainly would be a suitable location for that facility.

The biggest challenge so far has been finding a piece of land.

MR. PEACH:

I know that you have been

offered a piece of land, which is a dump that closed in Long Cove.

Long Cove is a large lay-down area.

The town of Norman's Cove said you can go there, and there would be no

cost to government or whatever. We

have been waiting so long, and we picked an area where there has been a

challenge with private property and whatever.

I just wanted to make that comment as well.

MR. MERCER:

Yes, well the centroid of the location that has been recommended as what would

be the most economical for people in that area to bring waste to is Whitbourne.

We have been trying to get a location as close to Whitbourne as possible.

Going

to Long Cove would be a little further west and away from the centroid, so

people would incur more cost to get there.

Ultimately, if we cannot find a location in the Whitbourne area then we

will have to consider something that is adjacent to it.

MR. PEACH:

I agree with you.

The central area is Whitbourne because people come from down the shore

and whatever.

MR. MERCER:

It is certainly a high priority for us.

We want to get it done sooner than later, recognizing that dump sites

there have been closed for a couple of years and people are having to either

hold onto or transport those bulk items a much longer distance than they should

have to.

MR. PEACH:

I am just wondering about

the 27.6 per cent. I was listening

to the answers that you were giving on that.

Some of them I agree with, but I was just wondering: 50 per cent by 2015.

Now according to the findings of the Auditor General we are going to be

approximately around $315.5 million, an overrun of 58 per cent.

That is $115 million, over half of what was projected in the beginning.

I know you talked about infrastructure and things like that, but I am

just wondering where the large overrun would occur.

I am sure you took into consideration infrastructure and that in the

beginning, I am just wondering what the

MR. MERCER:

Well, referring back to the earlier question regarding the $200 million estimate

in 2002 and then again in 2007, the specifics and the details related to the

infrastructure requirements back in 2002 and 2007 were not available.

I do not think many, if any, knew what the infrastructure would in fact

look like.

It took

a fair bit of analysis and work to determine that the most economical approach

for the Eastern region is for most communities to direct all to Robin Hood Bay,

and that we would end up with nine public drop-offs.

That level of detail did not exist in 2002, and certainly from the

research I have done did not exist in 2007.

The

$200 million number was a very high level number.

We are confident that the approach we have taken, and while our

projection right now is $315 million, we have tried to find ways to do this the

most economical way that we can from a capital perspective, from an operation

and maintenance perspective, and a household cost perspective for residents of

this Province. No, we have amended

the Strategy in terms of it called for three landfills, and through analysis

we have done, we found that the most economical approach is for Western to go to

Central.

could have built another landfill over there, incurred an extra $100 million in

capital, and the residents over there would have paid another couple of million

dollars per year in operational costs.

We think we have done good due diligence in terms of appropriate

infrastructure, balancing the benefits to the environment, keeping capital costs

low and keeping operational costs at a reasonable amount for homeowners.

We have

kept abreast of new advances in technology that are happening.

There are new things that are being marketed every year.

For instance, when we built transfer stations in Central Newfoundland

three or four years ago, there is technology now, proprietary technology that is

on the market that would suggest there is a more economical approach to that in

terms of transfer stations.

We are

currently in the process of doing a design-build RFP for six transfer stations

on the West Coast. That will be a

design-build, so we are not asking someone to design it for us.

We are going to the industry so we can leverage innovation and get the

most economical, latest technology that is out there.

We think, and we know, we have had reports from industry that we can do

it significantly cheaper than you did it four years ago in Central.

So, we are open to all of that.

If you

look at the $200 million in 2002, and I think I might have said this to the AG,

just apply an inflation factor to that out to 2020 and you will probably come up

with a little in excess of $400 million.

That is probably where we would have been if we had built three

landfills. We are probably going to

be in the $300 million range.

MR. PEACH:

The 27 per cent that you

talked about, do we have a breakdown of what portion of that would be in

Eastern? How much is completed in

Eastern as to what was anticipated to be done?

Do we have anything on that, what percentage of the Eastern is already ?

MR. MERCER:

Just for clarification, Mr. Peach.

You referenced the 27 per cent, which is waste diversion, but your question is

more along the lines of the infrastructure in Eastern, how much is done.

Is that ?

MR. PEACH: Yes.

How much is completed right now as to what we anticipated would be done

(inaudible)?

MR. MERCER: In

the Eastern region, the plan is that all communities would direct all to Robin

Hood Bay, with exception for those in the Clarenville area.

The architecture calls for one transfer station in Clarenville.

MR. PEACH: Is

the Burin Peninsula included in the Eastern?

MR. MERCER: No.

MR. PEACH: It

is not.

MR. MERCER: The

Eastern region is all the Avalon, including the isthmus, and includes

communities surrounding the Clarenville area.

Lethbridge would be in the Bonavista region, and I think once you get

past Goobies you would be getting down into the Burin region.

What we have done is everything is done.

The development and redevelopment of Robin Hood Bay is all done.

What is left is

composting for the Eastern region and the completion of a transfer station in

Clarenville.

CHAIR:

We will go to Mr. Osborne.

MR. OSBORNE:

So there will be two

landfills created in addition to Robin Hood Bay?

MR. MERCER:

No, including Robin Hood Bay.

MR. OSBORNE:

Including Robin Hood Bay.

In the

Auditor General's report there is consideration being given to the construction

of a new unlined landfill. So the

new landfill that is going to be constructed will be unlined?

MR. MERCER:

The reference in the AG's report to the construction of an unlined landfill is

in Southern Labrador; so not on the Island.

The two landfills that will be on the Island will be Robin Hood Bay and

Norris Arm.

There

will likely be a landfill in Southern Labrador, an unlined landfill.

There is an unlined landfill in Labrador West.

There is currently a single, unlined landfill in Happy Valley-Goose Bay,

and there are landfills on the North Coast, communities north of Goose Bay.

We do not know what that will look like at the end of the day yet; but,

yes, the reference in the report was to Southern Labrador.

MR. OSBORNE:

The Norris Arm site will be

lined?

MR. MERCER:

The Norris Arm site is lined. As a

matter of fact, the first cell is constructed as a lined cell.

The board is currently looking at constructing the second cell now,

because the site has been in operations for about two years and each of the

cells are designed for about five years of capacity.

MR. OSBORNE:

Okay.

I just

want to have a look at the 27.6 per cent diversion, we have I know when I was

in the department Green Bay was diverting primarily fibres, but they were

diverting at the time. We have St.

John's with curbside, Corner Brook with curbside, Mount Pearl with curbside, and

there were recycling programs put in place in Grand Falls and Lewisporte.

Outside

of those programs that are put in place, including the paper and fibre programs

put in place, is there anywhere else that waste diversion is coming from?

I should include in that the beverage container recycling program and the

tire recycling program. Where else

is diversion coming from that is making up the 27.6 per cent?

MR. SAMSON:

The 27.6 per cent broken down, roughly, about 75 per cent of that is coming from

industrial, commercial, and institutional diversion; paper, metals, construction

and demolition, C and D materials.

The next most significant proportion of that is coming from MMSB's operated

programs, beverage and tires. I

think beverage is about 7,700 tons a year diverted through the beverage program,

and another 5,700 tons, if memory serves, is from the tire program.

The balance is, at this stage of the game, coming from residents at

curbside.

It is

important to note that residential curbside is now available through virtually

all the Eastern region, because Eastern Waste Management, which does

consolidated collection in rural areas on the Avalon Peninsula, has introduced a

curbside program as well. That is

roughly the breakdown of where the 27.6 per cent is coming from.

As I indicated earlier, we believe the big gains are to come from

organics. The next big step will be

the expansion of curbside to Central and the West Coast.

MR. OSBORNE:

In the past seven or eight

years there has not been any major growth in the percentage of waste diversion?

MR. SAMSON:

No, I wouldn't say that was the case.

I mean, we are starting from the baseline number of 7 per cent in 2002.

What we have seen over a period of twelve years is a growth of about 20

per cent in diversion over that period of time.

As I

indicated, it is really related to infrastructure.

Once you get beyond, what really drives diversion at the end of the day

is to build the infrastructure, put the programming in place, and focus heavily

on public education and promotion to drive participation in those programs by

homeowners and by the ICI sector as well.

Ultimately, if you look at jurisdictions like Nova Scotia, the big kicker on

diversion and the final push on diversion come through regulation and

enforcement on the backend. If you

go to Nova Scotia and look at the kind of program they are running, what you are

seeing is the use of clear bags; garbage is being inspected, and in some

instances rejected at the curb.

There is a requirement for participation.

We see

participation in programs, for example, here in the Eastern region.

The City of St. John's says they have, I believe, a 60 per cent

participation rate in curbside. The

question is: 60 per cent of the people are putting out a blue bag, but how much

of the eligible material, how much of the opportunity are you realizing by what

is in the blue bag? How much

recyclable material or divertible material is still going in the black bag?

Those are the kinds of challenges that we are encountering here in

Newfoundland and Labrador, and that other jurisdictions have encountered as

their waste management systems have been built and matured over a period of

time.

MR. OSBORNE:

Let me rephrase my question.

Back in 2004-2005, curbside recycling was implemented in Mount Pearl and

in Corner Brook. There were

regulations put in place for waste haulers to ensure that a percentage of their

waste was diverted as a result of fibre and so on.

There were programs put in place in Lewisporte and in Central for waste

diversion, primarily of fibre.

already had the Beverage Container Recycling Program in place.

We already had the tire recycling program in place.

There was an agreement, I recall, between the MMSB, government, and the

City of St. John's to implement their waste diversion curbside recycling program

once their facilities were built.

In my estimation that is what makes up the vast majority of that 27.6 per cent,

those programs that were in place in the mid-2000s.

St.

John's came in place a little bit later, but the agreement was in place in the

mid-2000s. Beyond that, has there

been any significant growth in the percentage or the amount of diversion in this

Province?

MR. SAMSON:

Well, there has been significant growth.

As I said, the number has moved from the 7 per cent that we were dealing

with in the earlier part

MR. OSBORNE:

That was in 2002.

I apologize, Mike, for interrupting.

From let's say 2007 to now, what growth has taken place?

MR. SAMSON:

We have seen the introduction of curbside throughout all of the Eastern region.

Curbside is now available in all of the area, the 17,000 homes that

Eastern Waste Management does consolidated collection for.

It is all done with split stream trucks.

Curbside opportunity is available for all of those residents in the

Eastern region.

There

has been significant work done in organics diversion on the Burin Peninsula and

in a variety of other communities.

There has been significant work done in respect to the ICI sector and driving

the diversion of, particularly, construction and demolition waste.

All of those pieces comprise the growth that has occurred over that

period of time. The next big steps

that will occur will come in the expansion of curbside and the development and

implementation of infrastructure and programs that relate to organics on a large

scale.

MR. OSBORNE:

The Extended Producer

Responsibility program, we see that with electronics now.

I know if you purchase a battery at a Walmart, for example, there is a

$15 fee. If you bring your old

battery in, you get that $15 back.

That is obviously incentive for many people to bring their old batteries in.

There

is no similar incentive in place on electronics.

While the program is in place, I still see in the more rural areas of my

district, if you want to call it that, televisions and so on being dumped.

Is there consideration given to an incentive program on electronics?

MR. SAMSON:

The EPR program, the electronic waste program that is operated in Newfoundland

and Labrador by the EPRA, is essentially the same program; it is a harmonized

program across the country. I am

not aware that there is a deposit refund system in place on electronic products

anywhere in Canada. It is not the

model that is in use in the country.

The

cost that is incurred by the consumer at the time the product is purchased, the

entirety of that cost is used by EPRA as a non-profit organization to manage the

disposal of the material and in an environmentally appropriate way at the end of

its life. Unlike the used beverage

program, which is structured as a deposit refund system, electronics is not.

Generally speaking, Extended Producer Responsibility programs are not

deposit refund systems.

MR. OSBORNE:

Okay.

What other work is being done in relation to the Extended Producer

Responsibility on other products?

MR. SAMSON:

The first one introduced in Newfoundland and Labrador was used paint, of course.

Paint has been in place for a couple of years now.

It is operated on behalf of the paint brand owners by a non-profit

organization or a company called Product Care.

The

second EPR program in Newfoundland and Labrador was the electronic waste program

introduced about a year ago. There

is work ongoing at the program development level as we speak in a couple of

other areas. One relates to used

oil, glycols, and associated automotive products.

There

is currently a used oil program in the Province which has had some success; but,

of course, containers and oil filters and things are not captured by that

program. We have been working on a

proposal for the government in respect of implementation of an EPR program for

used oil, glycols, and associated products.

The

next big wave in EPR is anticipated that it will be PPP, which is printed paper

and packaging. We are beginning to

see the first movement on printed paper and packaging at the EPR level in

Western and Central Canada at this stage of the game.

That is where the next move will be on EPR, subject to government

approval, of course.

MR. OSBORNE:

Okay.

I do

not know if they moved forward with that, but I know some areas were looking at

having a manufacturer doing a rough calculation of the amount of cereal boxes,

for example, that a manufacturer would bring into a region.

That manufacturer would pay an amount based on the amount of packaging

that they brought into a region.

Essentially it would be a hidden cost, because the consumer would not pay a

surcharge when they bought a box of cereal; it would be built into the cost of

the box of cereal. The manufacturer

would then rebate to that jurisdiction an amount based on volume of packaging to

help divert and recover that waste.

Has government

MR. SAMSON:

That is essentially the framework which is under consideration here and

elsewhere in the country for printed paper and packaging.

That would essentially be it.

There would be estimates on the amount of the material that is, of

course, subject to verification by audits at the materials recovery facilities.

There would be a built-in assessment in the price of materials.

That

money would be distributed essentially to waste management authorities, landfill

operators, and MRF operators to defray the costs being borne by consumers and

taxpayers for the operation of those facilities and the support infrastructure

around them. That is certainly

where PPP will likely end up from an Extended Producer Responsibility

standpoint.

MR. OSBORNE:

Okay.

On the

tires, they are still being shipped off to Quebec or wherever for burning?

MR. SAMSON:

That is correct. Where we are today

is that approximately well, I will step back a step.

We continue to collect tires on an ongoing basis from approximately 625

locations around Newfoundland and Labrador.

All of that ongoing generation is collected and shipped directly to a

market in Quebec where the tires are incinerated for use as alternative fuel in

cement kilns essentially.

The

stockpiled tires at Placentia, which were topical for such a period of time,

also have been baled by and large.

The highway tires, the smaller tires have been baled and they are being shipped

to the same customer in the Quebec marketplace for incineration, use as

tire-derived fuel or TDF, as it is known.

We are currently in excess of 75 per cent depleted at Placentia.

Approximately 75 per cent of the stockpile is gone from Placentia, and we

anticipate that the Placentia stockpile will be fully depleted by the end of the

current fiscal year.

MR. OSBORNE:

One other question, Mr.

Chair, on tires. One of the

disappointments that I had in leaving Environment when I did because I feel I

would have had great satisfaction from an agreement between the Departments of

Environment, Transportation, and Municipal Affairs back in 2006.

They were going to crumb the tires and use them to insulate

infrastructure, pipes and so on.

That never happened.

Part of

the reason it did not happen was that the equipment I think it was located in

Stephenville by a company that used to shred the tires here was sold by the

MMSB. Is there any consideration

now, as opposed to having the tires burned in Quebec and used as an alternative

fuel, to revisiting that? The

tires, if they were crumbed and put around infrastructure, water, sewer pipes,

whatever, my understanding is that infrastructure would last considerably longer

than insulating with crushed stone.

If it

was dug up 100 years from now it could still be used again to reinsulate.

While I understand the amount of tires in this Province would not provide

enough material to insulate all the infrastructure that is used on an annual

basis, at least it was diversion and a good use of that.

I was disappointed when the MMSB sold that equipment as opposed to

allowing that plan to proceed. Is

there any consideration given to revisiting that idea?

MR. SAMSON:

At MMSB we continue to consider any and all proposals in respect of alternative

uses for the tires. The current

decision of the board and the organization has been to enter into the agreement

with the cement producers in Quebec who ship the tires on an ongoing basis out

for that utilization.

We do

continue from time to time to get proposals from people wishing to do

alternative things with the tires.

We are always prepared to look at and consider those proposals.

Subject to their economic viability, and understanding that there would

be public tendering issues and stuff around alternative arrangements, we would

certainly be prepared to consider alternative uses for the tires.

As you

can appreciate, there are a number of complexities that relate to the

alternative utilization of tire rubber in Newfoundland.

Volume, as you have indicated, is obviously one.

The current volume of between 450,000 to 500,000 units a years is a

difficult volume to work with from an economic standpoint.

The investment on the front end for alternative uses and the volumes that

result from that are challenging from an economic standpoint.

We also have issues, of course, that relate to the potato nematode and

other sorts of issues that challenge your ability to do certain sorts of things

with the tires.

I guess

the short answer, Mr. Osborne, would be that we are always interested in finding

alternative uses. We have done a

lot of work around the use of shredded tires as tire-derived aggregate.

We have been pursuing some discussions with various partners around that

as a potential alternative, understanding that as the MMSB we do not perceive it

to be in our best interests, or the best interests of the program or the

Province, to have all our eggs in one basket in respect of the tires, but they

have certainly been a challenge.

The couple of private sector attempts to do something with the tires over the

years, of course, were not successful.

The short answer is yes, we do continue to consider and to carry out

research on potential alternative uses for the tires.

MR. OSBORNE:

Okay.

One

quick follow up on that; it was your predecessor, Mike, at the MMSB where the

equipment was sold, but it was to be an in-house, a government and MMSB, to

crumb the tires and use it as insulation on infrastructure.

MR. SAMSON:

That was certainly before my first run at MMSB, which has subsequently become a

second run at MMSB.

MR. OSBORNE:

It was, but in any event,

that was in-house. It was not a

proposal.

MR. SAMSON:

Right.

MR. OSBORNE:

It was to be done in-house

and anyway, just food for thought.

MR. SAMSON:

Thank you.

CHAIR:

Mr. Cross, and after Mr.

Cross we will take our morning break.

MR. CROSS:

Thank you.

I have

two or three questions, and they are sort of jumping over the place because a

lot of the things I had noted on the sides of my paper and notes I had taken

have been touched on.

Mr.

Osborne has started this vein of questioning along the lines of the 50 per cent

diversion, and some of the comments that have been said throughout the morning

were referring to different recycling programs and different programs on the go.

I know in the Eastern region there is probably a fair bit more of the

curbside going ahead than there is in Central, but is the onus on the towns to

initiate this, or is MMSB going to initiate in the Central region that goes to

Norris Arm?

I heard

comments about Lewisporte and a couple of other names Grand Falls-Windsor,

probably dropped this morning in the sense of some other programs on the go,

but the initiative to get the extra things recycled, like cardboard and the

other cans out, as opposed to the beverage containers from the homes, where is

that, or at what point ? Would it

help us get to the 50 per cent quicker by actively starting programs?

MR. SAMSON:

At MMSB what we do is we pilot, we promote, we educate, and we try to incent

people to undertake these kinds of programs.

The

numbers of things that MMSB has been involved in, and some of the things that

have been referred to here this morning the diversion of household hazardous

waste, for example, was an MMSB initiative which was interim to the development

of the modern waste management system and the construction of the infrastructure

and the development of the programming to allow HHW collection and diversion to

occur at the regional level for everybody in Newfoundland and Labrador.

As that permanent infrastructure comes on stream and the system matures,

MMSB will withdraw.

Our

involvement along the way, for example, in composting and that has been

everything from vermicomposting, using worms in a plastic bucket on top of your

shelf, to your backyard composting program and the 30,000 bins that have been

distributed in partnership with communities throughout Newfoundland and

Labrador, the indusial pilot at Grenfell College.

It is all about piloting, about testing things out, about getting people

used to the ideas about seeing what works.

In the

case of composting, we have done a lot of work around recipe development because

of course successful compositing you do not just throw the stuff in a pile and

wait. There are issues that you

actually use a recipe. It is not

unlike making a cake. All of those

kinds of things we have been involved in along the way.

We will

not and are not involved, and it is beyond our mandate and scope of operations

to be involved in actual collection at curbside and that sort of thing.

Those responsibilities very clearly fall to the regional waste management

authorities and/or the municipalities.

What we do is research, we educate, we will help and we will assist in

the marketing of programs and provide advice and counsel to municipalities and

others.

I think

what is going to happen in Central, just to jump ahead on your question my

understanding of the plan in Central is that most of the collection in Central

is consolidated and done by the Central Waste Management Authority, virtually

all of it, I think, with the exception possibly of the Town of Grand Falls.

Curbside will roll out throughout Central region all on the same day, all

subject to the same rules, all the same program, all administered by Central

Newfoundland waste. That is the way

it will happen.

MR. CROSS:

Okay, because I know when it

started the big trucks were coming for the garbage as opposed to the local

contractors and the towns. There

were dates in place. I just assume

it seems like it has been a couple years now.

It was thought the first year-and-a-half, after that they would be into

more materials and you would have to sort your garbage and things like that.

I guess that day is coming but it is probably delayed a little bit.

MR. SAMSON:

My understanding is that the

materials recovery facility will be commissioned early in 2015, so we would

think perhaps some time next spring curbside will be ready to roll in Central.

MR. CROSS:

Okay.

As of right now, for the ordinary consumer in most of Central

Newfoundland, other than the towns that have taken it upon themselves to have a

different way to do it, nothing has changed, other than the garbage is picked up

out of our garbage box or whatever at the front of the house.

One

truck takes it to, in my case it is Indian Bay.

The community next to us takes it to Gander Bay.

Then there is another truck that comes in and hauls it away and everybody

is just wondering, make no wonder it is costing such an amount and all this

because you are moving it around so much.

If there is nothing else done it is just as well to throw it in the

ground here. Plus, the reclaiming

of all the dumpsites in the different communities, the costs are there.

When

you visit with local governments, or even individuals, the topic comes up: make

no wonder we are paying this big tipping fee and all of this because look at

what you are doing with all the garbage.

It is just as well to throw it in a hole in the ground here as it is a

hole in the ground in Norris Arm.

With the people out there, that is the type of attitude.

Maybe we have been our own worst enemies to a point that what we have

done so far, because they have not seen the next steps and the next steps, is

that we are not sending the right messages, so people are not ready to jump on

board.

When

the time comes we are going to sort our garbage, and they are not educated or

not prepared for that. Maybe that

is just a head's up or an idea that maybe we have to do more of that.

We have come a long way from the time when we would go to the little

store, when I was a kid down on my end, and you would ask for your bottle of

pop: are you going to take it out or are you going to drink it in was the

question asked, because you had to add the extra two cents on if you were going

to carry the bottle away. The

bottle was almost like the fellow in the store owned it himself.

He got his bottles back and changed them and sold them back as well.

From

those days to here, we have grown quite a bit but there is still a fair room to

go in some areas, which leads to two other little aspects.

One, recently I did some things at my house.

I tore out some carpet and I did whatever.

I borrowed my sister's truck, used my little card and went to Indian Bay

to drop off the materials. This

distance is like twenty-five kilometres or so.

Jamie would understand because we were neighbours years ago.

I thought him the facts, so he knows what I am talking about.

When

you go to Indian Bay, you go in and you have your card and you get up along by

the antenna somewhere and you are swiping it.

Whether it hits or it does not, most times I have gone in and I have come

back and had a little charge at the end of my dumping because I expect that.

The last time I went in I thought I did all the same things but it was so

hard to get the signal to work that when I walked out and saw at the end, cost

to user or whatever, it was zero.

There was no cost.

brought in the same materials I have always gone with.

I had half a pickup load but when I came out there is more education to

be done to even people like myself because I probably do not go there as often

as others, but in the use of that system, if I can go in and drop off about 600

or 700 pounds of garbage and come out and it says zero, then it is an indication

that maybe that is not the best system or user-friendly.

I went

in and I did not exactly know if I had to go to all the different piles.

I went in and was trying to get in unsorted garbage.

Everything I always do is go to the trailer and just throw it aboard the

trailer. I might have a little bit

of gyproc. I might have a little

bit of this, a little bit of that, some carpet; it is all garbage as such.

How do we get the right stuff to the right sorts and the right places in

the landfill? Because everything I

went in with went in the back of the trailer that was going to Norris Arm, but

if I had sorted or was more educated in that maybe I have missed part of that

education, but there are, out around the trees, piles that look like building

materials and shingles and refuse from that.

If I

had taken the initiative in advance, I could have been in these different piles

because obviously they are going different places.

Part of the education for that is maybe something that we need to keep

going with as well; or the idea of how a user goes and uses the site, yet when

you leave, you do not really understand what you are being charged for, if you

have been charged anything. You are

not going to get a credit, obviously.

I expected to be paying more than I did.

I do not think that bears an answer, just probably more information.

Jumping

to a further topic now, the (inaudible) sorts of gets me and I just want an

answer for it, somehow, is item number six on page 138.

I will read it so you do not have to go looking for it.

Consideration is being given to construct an unlined landfill in

Labrador that is not in accordance with existing environmental standards.

If the two big sites we have are lined, for what reasons would we be able

to now consider constructing another site I do not know if it is volume, the

size, the geography of where it is to, but how can we even consider that, that

we start an unlined site at this point?

MR. CHIPPETT:

First clarification I guess

is that Norris Arm is lined. One of

the major amendments to the Strategy in 2007 was to allow for the existence of

existing lined landfills if they did the same sort of containment function.

So Robin Hood Bay, in fact, is unlined as well.

MR. CROSS:

Oh, okay.

MR. CHIPPETT:

From the perspective of

Labrador, one of the things the Auditor General noted was the lack of a specific

policy or guidance document around Labrador.

Initially the 2002 and 2007 strategies talked about largely an

Island-based waste management system, references to Labrador, and also

references to remote communities.

There

was not a guidance document at the time of the Auditor General's report around

Labrador. There is now, so I point

members to the environmental protection

section of our department's Web Site.

You are correct in that given some of the differences in geography,

transportation links and so on, and indeed population size in that area,

unlined, provided that it can meet the environmental protection standards that

we would expect, it could be a very big improvement in Southern Labrador.

If memory serves, there are fifteen mainland communities, four isolated

communities, and I believe twelve existing landfill sites.

Even

though you would be looking at an unlined landfill, it would meet the standards

of containment that we would expect as a department and it would be a great

improvement for waste management in that region.

MR. CROSS:

Okay.

Thank

you, Mr. Chair. I do have a couple

of other questions later, but I think we are nearing the breaking time.

CHAIR:

If you wanted to ask them,

you could if you

MR. CROSS:

No, I am good now.

I will just (inaudible)

CHAIR:

Okay.

MR. OSBORNE:

If I could, I am going to

thank our witnesses today I have a meeting at 11:00 a.m. and I have asked the

questions that I was going to ask, so I thank everybody for your co-operation

and your answers.

CHAIR:

Let's meet back here at

about 11:15 a.m.?

MR. K. PARSONS:

Mr. Chair, are we going to

try to conclude this this morning or what is the goal for the

CHAIR:

I suppose we will go until

the questions are asked and the answers are provided.

MR. K. PARSONS:

Okay.

CHAIR:

Ideally, we would finish in

the first half of the day.

MR. K. PARSONS:

Okay.

Because

if we

CHAIR:

A lot of that may be driven

by the members' questions, because I sense that some of the questions have

become very long and they are not necessarily questions; they are more

anecdotal, and that uses up a lot of time.

While sometimes that may be necessary for

preamble and some of the

witnesses' answers are lengthy, but they are more of a detailed, technical

nature - I suspect that the longer answers should not generate a long question;

whereas a short question generating a long answer would get us more information

and would probably get us out of here in the morning instead of in the

afternoon.

MR. K. PARSONS:

Okay.

CHAIR:

So, 11:15 a.m.

Recess

CHAIR:

We are back on, live, and I

think we go to Mr. Murphy.

MR. MURPHY:

Thank you, Mr. Chair.

I want

to talk a little bit about the cost of the Waste Management Strategy.

In its response to the Auditor General, the department noted that the

original $200 million price tag was a preliminary estimate and it was based on

the level of detail available at the time.

I think it was Mr. Mercer who talked earlier that we were possibly

talking about, in the future, the possibility of hitting close to $400 million

now, if we had to have a lined facility put out west, and the number I think the

Auditor General puts on it right now for the overall Strategy is about $318

million.

Could

you tell me what benchmarking you are going to be using as your goals up to 2020

to ensure that we are going to not be having any more cost overruns past what

you are predicting? What are you

using for benchmarks? Do you have

an operational plan, for example, set aside that would give us something to chew

on, if you will, some benchmarks that the public will be able to see to show

that you are going to be on budget for the next time around?

MR. MERCER:

Well, I am not sure if you

have a copy of it and I think it is included in the AG's report as well, but we

did provide a Waste Management Strategy implementation plan out to 2020 by

region.

MR. MURPHY:

Yes.

MR. MERCER:

That is what, I guess, I

would be held accountable to at this point in time.

They are cost projections.

For instance, right now I spoke earlier about what development have taken place

in the Eastern Region and I am currently, in my cost projection, carrying $20

million for composting facilities for the Eastern Region.

We have

a plan in place and those are the benchmarks that we have in place based on all

the study information that we have done so far and based on the most recent work

done under the composting study that would suggest that those numbers are

probably good numbers.

MR. MURPHY:

Okay.

Are

there any impediments now to meeting your goal for 2020 that you would bring up?

For example, you might have some difficulties as regards smaller towns.

They are going to be looking at extra cost, for example, for the shipping

of solid waste. I can think of St.

Anthony as being out very publicly talking about that as regards shipping their

waste to Norris Point. I wonder if

you can comment on that.

MR. MERCER:

One thing to be clear on is

that our implementation plan in terms of cost deals with the capital costs.

It is the capital cost of putting waste management infrastructure in

place. The transportation of waste

to its final resting place, the collection of waste, those are operational

costs. Those are operation costs

that are borne by regional service boards and are paid for by fees collected

from homeowners or businesses in terms of tipping fees.

The

cost of transportation would not be included in my infrastructure numbers.

They would not be a cost to the Province or the Crown; it would be a cost

to the user of the service.

MR. MURPHY:

Okay.

What I

am wondering about is if you put attainable goals in there to put infrastructure

in place, obviously if you put the infrastructure in place, somebody has to use

it. My question then, as regards

that, either A it is government policy that everybody will have to use it.

Municipalities are going to struggle with it.

Like I said, St. Anthony has already commented on it as well as Corner

Brook, I think, was the latest group that I can remember the latest

municipality, I should say, that are commenting on the cost of dumping fees and

everything.

What

did you do in the way of consultation as regards the setting up of the

infrastructure to prevent a load burden on municipalities in cases like this?

MR. MERCER:

Well, the plan for

infrastructure in each of the regions is actually a plan constructed for the

most part by the stakeholders themselves.

While we set the goals and objectives of the Strategy, we really work

with the stakeholders. For

instance, in Corner Brook or the West Coast prior to having a Western Regional

Service Board, we had a committee in place of about fifteen community

representatives and they represented communities throughout the entire region.

We work

with them to actually help develop the capital infrastructure plan and the

approach that they would take with some of the guiding principles being that we

want to keep capital cost low. We

want to keep the household cost, the annual operation cost that we were not

funding but they would be funding low, and that we would strive to adopt the

newest in technologies and that sort of thing.

I think

Colleen had referenced in her opening comment this was really a grassroots so

it is not something that we really pushed down at them from an infrastructure

perspective; it is a plan that they helped construct and they bought into and

have bought into before we even put the infrastructure in place.

MR. MURPHY:

Okay.

Before

I move on here, I wanted to come back to the question around tires.

Mr. Samson, before we let out on the break Mr. Osborne asked a question

about tires and using it on municipal infrastructure.

I have often asked why we cannot be using it on roads, using tire crumb

to extend the life of roads, for example.

Has the Multi-Materials Stewardship Board entertained any proposals as

regards using tire crumb for road infrastructure?

MR. SAMSON:

Have we entertained any

proposals in recent times using it for road infrastructure?

MR. MURPHY:

Yes.

MR. SAMSON:

No, we have not.

We have not been in the market for proposals of late.

There has been significant research done into potential uses for the

rubber in Newfoundland, predominately in a form called tire-derived aggregate.

So, essentially the tires, as opposed to crumb, they are shredded into

larger pieces. The general

application is as lightweight fill.

I am not an engineer and cannot speak to the value of that in the construction

process, but we do continue to look at those alternatives.

The

great challenge with the tires in Newfoundland and Labrador is the limited

volume of tires that are available on an annual basis.

While 400,000 or 500,000 highway tires might sound like a lot of tires,

the reality is if you are converting it into tire-derived aggregate, if you are

going to be using them as tire-derived fuel or you are going to be crumbing them

or recycling them, it is not really an economic quantity of tires to be working

with on an ongoing basis. It drives

the cost of the material up the raw material that is produced at the end of

the day up. That, of course,

reflects in construction costs ultimately and it also means that there is not

enough of it being produced to do things with.

Somebody during the break had referenced in a conversation that turning all of

the stockpiled tires in Newfoundland back in the mid part of the last decade

into tire-derived aggregate would have provided sufficient lightweight fill to

do one kilometre of highway. It is

very difficult, of course. All of

this requires buy in by the engineering community.

It needs to be built into design.

Those are all challenges when you are trying to deal with the small volumes, and

it has been the classic problem here on tires all the way through.

As I indicated in my response to Mr. Osborne, we continue to be interested in an

alternative to the all-the-eggs-in-one-basket approach to tire-derived fuel for

tires in the Quebec marketplace.

MR. MURPHY:

I am just wondering, too, just as a follow-up to whole tire question and the

selling of the tires: Do we sell these tires to Quebec for final burning?

What is the process right now?

We know that the taxpayer right now, the consumer, pays $3 a tire.

So, we know that the money goes to the MMSB.

How much money does the MMSB gain just from tire sales in the run of a

year?

MR. SAMSON:

Well, I would have to check my latest financials.

Our tire deposit revenue for the current year, it is budgeted at $2.8

million. That would be level with

the actual for last year which was $2.8 million.

Generally, the tire program is a break-even proposition.

We collect $2.8 million in revenue.

We subsequently collect those tires that are returned.

Last year, I think the recovery rate was 72 per cent.

So, every 100 tires that went into the market, every 100 program tires

that went into the market, we got seventy-two back.

We collected them from 625-plus locations in Newfoundland and Labrador.

We paid the cost to ship them to Quebec,

where the market takes them without charging us a tipping fee.

Similarly, tires that have been stockpiled in Placentia, there of course have

been cost associated with managing that tire stockpile over time.

A couple of years ago, we went to tender

through the Public Tender Act to secure a transporter to move those tires to the

marketplace in Quebec.

The Quebec bound stockpiled tires are going by Oceanex, by sea, where they are

offloaded and taken directly to a biocontainment area at the cement kiln and are

burned. That was done through a

Public Tender Act process, but the $2.8 million basically covers program costs

on tires. It is not a profitable

operation.

MR. MURPHY:

No.

In the end, the consumer is paying to have these tires shipped to Quebec?

MR. SAMSON:

The consumer is paying a fee which ensures that the tires are diverted from

landfill and are ultimately reused for the production of something different.

In tires generally, whether that is tire-derived fuel, which is very

common in many jurisdictions, the tires are being burnt as fuel in Quebec,

subject to all the Quebec environmental regulations and meet all of those

standards.

In some jurisdictions, they are turned into agricultural products, cow mats, and

those sorts of things. The

challenge here is again twofold. It

is on volume and it is on the fact there are some issues around contamination

that relate to this potato nematode issue and the movement of agricultural

products to and from Newfoundland and Labrador.

MR. MURPHY:

So these tires have to be essentially washed before they are sent?

MR. SAMSON:

We require the tires to be clean when we pick them up.

That is why, at the end of the day, off-road tires, for example, are not

included in our program. ATV tires

and farm machinery tires are not program tires.

There is no levy paid on them.

We do not collect them. We

do not export them because they are not approved for export.

MR. MURPHY:

They will end up in a landfill somewhere

MR. SAMSON:

They end up actually chopped and landfilled.

MR. MURPHY:

Okay.

We do not pay to have them shipped off I am just wondering about this because

it sounds odd. When I think of

recycling or the Multi-Materials Stewardship Board, I look at having a

continuous use, if you will quote, end quote on continuous use I guess but I

would like to see something better as regards recycling.

I would like to see another product turned into another product instead

of the finality, if you will, of rubber being burned as a fuel source.

It kind of does not make any sense to me with regard to environment and to waste

management itself. I know that it is

gone, it is used as a source, but I would rather see it turned into something

else practical that would have again turned into another recyclable product.

I am curious about why the decision was made on the part of the Multi-Materials

Stewardship Board or whoever made the policy decision to have a product shipped

off to Quebec for the finality of a process of burning rather than turning it

into another recyclable product or even back into a tire again, because we are

washing these things and we are sending them off to Quebec to do it.

On the open market right now, rubber tire is going for about $200 a ton.

We have a chance here for cost recovery rather than having to spend money

on it to get rid of it. I am

wondering why we don't go that route.

We have to wash them anyway.

Why don't we just put the rubber tires out there on the market and gain some

revenue back?

MR. SAMSON:

All of the research that we have done, Mr. Murphy, indicates that the short

answer always as it relates to Newfoundland, the volume of tires we have, is

economics. It is finding a

financially and economically viable model for doing something else with the

material.

We spent many, many, many years babysitting lots of tons of tires down in

Placentia and incurring large costs that were associated with the management of

that stockpile, fencing, security, firefighting capacity, all of the things that

were necessary to deal with it. We

explored exhaustively a number of other alternatives: tire-derived aggregate

being one. Again, it is very

challenging economically when you are only dealing with 400,000 to 500,000 units

a year.

We have looked at potential local uses as TDF.

We were in discussions with Corner Brook Pulp and Paper at one point

around the utilization of the tires as fuel in Corner Brook, TDF in Corner

Brook. For one reason or another,

that solution did not come to fruition.

As I said, many rubber tires are recycled into agricultural products and find

their ways for use in dairy and beef farms as cow mats and animal bedding and

this sort of stuff. It is not a

market opportunity in Newfoundland because of the issue that we have with soil

contamination. Of course, we have a

limited agricultural sector here.

We have looked eight ways from Sunday at opportunities.

Tire-derived fuel, your average program tire, we understand, displaces

the use of approximately five gallons of petroleum.

As opposed to a landfilling application, for every tire that is burned

five gallons of oil does not come out of the ground is another sort of way of

looking at that.

Tire-derived fuel is a very accepted use in many areas.

I am not aware that anybody is actually re-manufacturing tires into new

tires but there are lots of potential where volumes warrant and where

transportation economics works for the use of crumbed rubber and those sorts of

things, and we acknowledge that.

I guess what I would add to that and conclude, because my answer is getting

long, is that virtually all of the materials that we collect for recycling in

Newfoundland and Labrador end up exported from Newfoundland and Labrador to be

dealt with.

MR. MURPHY:

I know that there are substantially better prices for other types of rubber in

the Province, no doubt, which are sold here or used here probably in smaller

quantities too. Have you done an

investigation into the market itself?

Because the market is out there looking for used rubber.

It could be conveyor belt rubber, it could be tires, or it could be other

types of rubber that are out there: automotive hoses, for example, radiator

hoses, recycling there. There are

opportunities there for some of our junkyards in the Province, for example, to

participate. Have you done any

research work?

MR. SAMSON:

We monitor markets for scrap material generated out of our programs on an

ongoing basis, and are watching everything from long-term pricing to spot

pricing on individual products and that sort of thing.

The determination, I guess it was in 2010 or 2011, was that the most

economic opportunity available, the lowest-cost option for citizens of

Newfoundland and Labrador as it related to the tires, was to the TDF option at

that time.

We continue to be interested in finding alternatives and to explore

alternatives. We will see where it

takes us. As I said, we are

watching it all the time.

MR. MURPHY:

Okay.

CHAIR:

We should move on to Mr. Parsons now.

MR. MURPHY:

Sure.

MR. K. PARSONS:

I guess, Mike, a lot of it has to do with transportation costs.

When you talk about rubber and making anything else out of it, it is the

economics of doing it, and probably making sure that if you were changing it,

the cost of recycling per tire would have to be a whole lot more than what it is

today to make it economically viable to suggest some of the stuff Mr. Murphy

is suggesting there.

MR. SAMSON:

The current programs levies, which have not changed in many, many, many years,

are $3 on smaller tires and $9 on larger tires.

It is the cheapest program in the country.

Those are the lowest levies in any jurisdiction in the country.

When you begin to go down the road of certain alternatives, or alternatives

which are less economically attractive, ultimately it goes back to the levy on

the consumer. The $3 and the $9

would need to be looked at in that regard.

MR. K. PARSONS:

I just have one final question I want to ask the different departments.

The Auditor General's recommendations, when I look at what

recommendations he came up with at the end there, amazingly with the Department

of Environment and Conservation, he wanted proper budgets put in place to

develop for future plans. With the

Department of Municipal Affairs, he wanted to ensure that there was proper

support documentation for project costs.

I go back to what I mentioned earlier about the Steering Committee meeting on a

regular basis to promote effective oversight so implementation of the Strategy

is in place. The Department of

Municipal and Intergovernmental Affairs, Environment and Conservation and

Multi-Materials Stewardship Board should ensure that proper reporting be put in

place for the remainder of the Strategy.

I wonder what has been done in these areas for the Auditor General's

recommendations. Have any of the

departments looked at these things?

I want to know where you are to with making sure reporting, documentation, and

the Strategy is put in place.

MS JANES:

I can certainly speak to some of those for Municipal and Intergovernmental

Affairs perspective; in fact, through the various questions here today, I think

we have highlighted some of that.

Cluney referenced earlier that in terms of the oversight committee we have

established or re-established a regular meeting schedule, notwithstanding that

there were substantive conversations that were ongoing as needed but perhaps on

ad hoc basis in the years leading up to January.

We have re-established and recognized the value of a regular meeting

schedule to keep all the Strategy partners informed on our progress.

We do have Cluney will know the precise title of the document, but it is a

performance monitoring report that was established a couple of years ago, which

we produce now on an annual basis at the end of the year that outlines what we

have achieved throughout that year, in accordance with the objectives that we

have laid out for ourselves. That

is certainly put in place.

In terms of the budget, Cluney has already spoken to the document that I believe

you all have in terms of cost projections that we have now and are carrying out

to 2020 to help us fulfill the remaining goals that lie before us in the

conclusion of the goals of the Strategy.

From those various perspectives, we think we have certainly taken the

recommendations of the Auditor General in the manner in which they are intended

and have moved, or continued, to do those kinds of things so that we are

accountable for the delivery of the goals that we have laid out for ourselves

over the past number of years.

MR. K. PARSONS:

I guess my last question is to the Auditor General: How are you finding with the

response that you received today?

MR. PADDON:

Just a couple of perhaps comments and observations.

In terms of reporting, I guess our observation was more around the fact

that progress on the Strategy, there was no formalized public reporting progress

and I am not sure that there is anything in place yet.

I am not quite sure, but that was sort of the thrust of our concern.

I do know that the Minister of Municipal Affairs had made periodic statements in

the House of Assembly, Ministerial Statements and those sorts of things, but it

was not my view that would be substitute for a formal report.

It was a $200 million-plus program, now $300 million, so in our view some

regular formalized reporting would be useful.

That is one observation.

In terms of the costing, I did hear Mr. Mercer indicate that he would be

accountable for the costs against the $316 million projected cost, so I take

that for what it is. That is an

element of accountability that has to be a part of this.

Time will tell whether the overall Strategy will come in within that

overall envelope. Experience would

dictate that there is probably some risk around it, but at the end of the day we

will see how it is. A regular

updating with an update on where costs are as well would perhaps help.

Just on the issue of the Steering Committee, I just wanted to provide a comment

based on a comment that Mr. Mercer said earlier.

He made the comment or words to the effect that to say that there is no

oversight would be misleading. We

did not say there was no oversight.

I think that would be overstating what we were essentially saying that this

umbrella committee that was intended to monitor overall progress was not meeting

on a regular basis. I would not

construe that as saying that there was no oversight.

I would accept the fact that within each department there was oversight and

people understood what was happening.

Where this is a multi-department project, our view is that the oversight

committee, the Steering Committee, would provide an opportunity to ensure that

the pieces that integrated were appropriately integrated and people were kept in

the loop. That was the only point I

would make.

Other than that, it would remain to be seen over the period of time how the

implementation of the rest of the Strategy develops.

I cannot really provide any comment at this point until we see it.

MR. K. PARSONS:

That is it for me, for questions.

CHAIR:

Mr. Murphy.

MR. MURPHY:

Thank you again, Mr. Chair.

I wanted to come back around to the Steering Committee.

I guess just as a follow-up to Mr. Paddon, the department also notes that

the Steering Committee has discuss the need for a public reporting approach.

I would like to get a little bit more of a definition on that, on exactly

what you would be reporting. Was

there a discussion on what would not be made public, for example?

Why wouldn't the Committee just release all of the information so that

the public knew how the Strategy was progressing in the first place?

If we knew that we were going to have trouble because of infrastructure,

why wouldn't we have heard about that sooner?

I would like to comment from your department, from your organization, on the

future of your reporting, on your public reporting and what you are going to be

reporting to the public as regards your progress.

MS JANES:

As Terry was speaking to the formal reporting, it reminded me that I had not

addressed that in my prior response.

Certainly, as a Committee, we discussed the fact that while there were

individual news releases as we constructed critical pieces of infrastructure and

those types of things that were released, there was not a comprehensive picture

of where we were in the Strategy released in the public domain.

We were monitoring those things internally and internally we had reports,

but there was no outward facing communication.

Certainly it has been a topic that has been talked about at the various

oversight committee meetings over the past several months.

One of the challenges in devising what that outward public report looks

like is to take the technical language out and present it in a way that it is

understandable and of value to the public.

That is something that we are working on.

We have had a dialogue and our communications people from the various entities

are also engaged, but it goes beyond just talking about what we have

accomplished in the Strategy or what remains to be done in terms of

infrastructure to the education of the importance of the Waste Management

Strategy, the environmental objectives, the role that they as individuals can

play. Because we, as departments,

can invest all kinds of money in infrastructure, we can lay out solid governance

structures in our regional service boards, but some of these decisions go right

down to the household level.

Educating the public is going to be important there, and this is where MMSB will

play an important role as a Strategy partner.

It is something on our radar, with the intent to produce something sooner versus

later, but there are various discussions in terms of the format and what that

may look like in terms of a public report.

We certainly did recognize the comments from the AG that the Strategy on

the whole we have not spoken to in the public domain and intend to address that.

MR. MURPHY:

Yes, I wanted to touch on that too.

When it comes to dealing with the various publics that are out there that you

are dealing with, this is not only about me and my household, it is about the

garage down the road or it could do with the fish plant, I do not know.

As regards consultation with your various publics, I do not know if you are

doing it or not, but I certainly have not heard that it is being done.

I do not know if there is not enough communication in that regard.

What have you done with regard to consulting with the public, for

example, with the formulation of the Multi-Materials Stewardship Board's overall

working Strategy in the Province?

MS JANES:

I think Cluney Mercer is probably best positioned to answer that.

MR. MURPHY:

He might be.

MS JANES:

I will turn the mike to him.

MR. MERCER:

When we sat down with stakeholders to devise infrastructure plans or the plan of

approach in terms of how we would get and meet the objectives of the Strategy,

it involved the community stakeholders, community leaders in a lot of cases.

They were really the ones who took the lead in terms of having

discussions with stakeholders within their communities, whether it be business

or whether it be households. They

still play a really vital role.

NorPen, as an example, on the Northern Peninsula issue a fairly significant

amount of public information related to their programs and that sort of thing in

terms of leaflets that will get placed in mailboxes and communiques that they

will send out to their stakeholders.

A lot of that is really driven by the regional waste management

authorities. While we educate from

a higher level, the drilling down in terms of dealing with the stakeholders at a

community level has really been done by the boards and committees.

MR. MURPHY:

Okay.

Mr. Chair, I only have a few more questions, really, and I guess part of what I

have is kind of a rehash of a little bit of what we have already gone over.

Coming back to the West Coast again, in response the minister said that

government decided and these were questions that I asked in the House, so

perhaps I can get a better response from some people here.

When I asked about the failure of the Waste Management Strategy in the

Western Region of the Province, the minister came back and in response said that

government decided that instead of creating a separate site on the West Coast

that they would save the taxpayers of the West Coast $1.8 million annually in

operating costs, and it made economic sense, and it also made environmental

sense as well.

I do not know if he had any documentation to back that one up.

Obviously there was a decision that had to be made by the minister here,

but did your board have the work to back that one up that it would save money

instead? Can we see the reports

from that? Is that possible?

MR. MERCER:

Yes well, the decision to go to Central was really made by the Western board.

So they had a done a significant piece of work with BAE-Newplan in terms

of looking at potential sites for landfill development over there, and further

assessed the economics of not building that type of infrastructure and

transporting to Central Newfoundland in lieu of setting up a series of transfer

stations.

So, there is a significant amount of work that was done.

I think I provided that documentation to your Committee, or the minister

did, back when we made our submission.

There are a number of reports.

As a matter of fact, I am pretty certain they are on the Web Site of the

Western Regional Service Board.

There would be three fairly significant documents that lays out that type of

analysis.

In that report, the analysis was based on the model that Central Newfoundland is

using. It is the same consultant,

actually, that did the West Coast analysis that has been involved in developing

Central Newfoundland. The cost

numbers that were being carried were numbers that were sort of being carried on

a per-unit basis for Central Newfoundland.

After that report was completed, and because we have been out there

scouring the industry, trying to find whether there are new technologies and new

approaches and that sort of thing, we were approached by a company out of

Ontario that had developed some proprietary technology for transfer stations

that is in use in several places in North America right now and performing

very well.

Unsolicited, they provided a proposal to us, which is really a proprieta