A Metro Vancouver plastic processing company says it may be forced out of business by the provincial government’s transfer of control of curbside recycling to Multi Material BC.
Fraser Plastics fears it will have to lay off 30 employees and shut down its Maple Ridge plant, which converts recyclable plastic into pellets for sale to other firms that make products like lawn furniture and plastic lumber.
Spokesperson Rupe Gill said her family’s firm has lost access to plastic that will be collected under the new system, because stewardship agency MMBC in February awarded a five-year contract to process recyclables to Green By Nature, a consortium that includes Merlin Plastics, Fraser’s direct competitor.
“That essentially creates a monopoly,” Gill said. “We are currently in survival mode and asking the government to rethink MMBC as we may not survive, or may not survive for very long.”
She said Fraser Plastics had been assured by MMBC last fall it could continue bidding on plastic in the future and had no idea the nearly 700,000 kilograms of plastic feedstock they depend on was about to be taken away.
Fraser Plastics gets some plastic from other sources, but Gill said the plastic collected curbside from homes that’s now guaranteed to Merlin made up 50 to 60 per cent of what they required.
“That won’t keep us afloat,” Gill said of the remainder. “It’s simply too much of our feedstock that we’re losing.”
She said the family had invested millions of dollars in the plant and in pursuing other technologies, such as a future line of plastic roof shakes and a plastic wax plant that would have used dirty plastic now burned in Metro Vancouver’s Burnaby incinerator.
MMBC issued a statement Wednesday saying Fraser Plastics was part of a bid submitted by another waste management company in response to its request for proposals (RFP) for processors, but was rejected in favour of Green By Nature.
Gill denied Fraser Plastics was a partner in any bid, adding they’d been told they were ineligible to bid.
MMBC said at least half of plastics available to recyclers comes from commercial or industrial businesses, not residential pickup. And it says not all residentially collected plastic is under the control of MMBC contractors – some communities have opted out and about 70 haulers in those areas are free to sell collected plastic as they wish.
“This represents a significant amount of collectors that will still be marketing their plastics to businesses like Fraser Plastics to purchase,” MMBC said.
Green By Nature, the winning consortium that also included Emterra Environmental and Cascades Recovery, promised to process recyclables province-wide and spend $32 million on a new Lower Mainland container recycling plant and a material recovery facility in Nanaimo.
It will employ 570 workers in all – a combination of existing jobs as well as new ones.
MMBC says the Green By Nature group offered the best combination of value, experience, efficiency and innovative design.
But Fraser Plastics is just one of several Lower Mainland recycling businesses that have been cut out of the MMBC-run system and may be forced to lay off workers, according to Mike Klassen of the Canadian Federation of Independent Business.
He said the government-ordered shift is disrupting multiple industries by arbitrarily creating winners and losers.
“When government creates regulations that hand over an entire business sector to one company or group of companies, this is the kind of anti-competitive outcome you get that ends up costing people jobs, their livelihoods and all the investment that goes into creating a business,” Klassen said. “It’s just not fair.”
Klassen said the CFIB and a coalition of affected industries continue to lobby the province to rethink the handover to MMBC, which is still slated for May 19.
The program, mandated by the province, aims to make retailers and other generators of packaging and paper shoulder the full cost of recycling it, rather than municipalities.
But various sectors, including newspapers, have balked at the high fees MMBC plans to charge and say the agency is controlled by Ontario-based corporate executives who are protecting their firms’ interests at the expense of others.
“We’re not considering delaying it,” Premier Christy Clark told reporters April 2, adding Environment Minister Mary Polak is continuing to work to address unresolved issues.
Gill says the likely demise of recyclers like Fraser Plastics will result in a less competitive industry with higher costs to consumers come 2019 – the next time MMBC allows bids for the recycling business it controls.
“In five years all these companies are going to be gone.”