When is a Tax Not a Tax or Nothing at All? - Tire Review Magazine

When is a Tax Not a Tax or Nothing at All?

Answer: When it’s a quasi-governmental effort that goes very, very badly!

Stewardship Ontario, which has been instrumental in developing numerous successful recycling programs in the province for all manner of products – including tires – recently bit off way more than it could chew.

Even though it is in no way a government entity (that’s what it claims, at least), the august body decided that Ontario consumers needed to pick up more of the tab to dispose of products it deemed to be environmental hazards.

So as of July 1, thousands of additional “hazardous” products were added to the rolls to be charged so-called “eco fees.”

Now, Ontario citizens had become used to paying eco fees on such obvious products like tires and TVs. The expanded list, though, became its own toxic dump. The list of fee-able products added things like laundry detergents, cooking spray, aerosol whipped cream, hand soap, grout, hand sanitizers, fire extinguishers, windshield washer fluid, weed killer and insect repellent and antibiotics. Of all shapes, sizes and content.

As in the past, Stewardship Ontario “eco fees” were expected to be charged and collected at checkout, with the retailer remitting the non-tax tax to Stewardship Ontario. They even created a handy-dandy chart outlining the various fees for each product added to the list.

That’s where the train ran off the tracks. For Canadian Tire, the nation’s largest retailer, it meant that 8,700 additional SKUs were subject to the non-tax tax. An unwieldy number, to be sure. And it was worse for confused consumers. That $2 pack of hand soap wasn’t $2, but another price once the non-tax fee was included. Except consumers had no idea what stuff cost until they got to checkout.

Walmart Canada flat out didn’t charge the new fees, opting to just write a check based on what it had sold each month. Shoppers at Canadian Tire locations and other stores weren’t so lucky as the stores were wholly inconsistent in what they were assessing. For example, a small fire extinguisher (less than 2.5 pounds) carried a $2.22 per unit eco fee. Some stores charged $4.44, the rate for an extinguisher between 2.5 and 5 pounds.

The fee structure for other products was even more diabolical.

Eventually, everyone got fed up. Earlier this week, Canadian Tire announced that it was suspending collection of the fees. Once that happened, Stewardship Ontario pulled the plug, and is now revamping its non-tax tax.

As Canadian Tire said in its news release announcing that it was shelving the fees, Stewardship Ontario “set up a very complicated fee for ‘materials’ instead of ‘products’ – meaning that two similar brands of cleaning products could have two different eco-fees depending on slight variations in their ingredients. Even more confusing, the ‘interpretation’ of these fees is left up to each retailer – meaning that five different retailers may charge five different eco-fees for the exact same product – all depending on how they interpret the very complicated fee structure.

“For their part, Stewardship Ontario did not do a good job in preparing Ontarians for these new fees. They did not properly communicate why the fees exist or the importance of safely recycling these hazardous products. Stewardship Ontario did not provide answers to the many questions customers and the media had in the face of fees that nobody understood.

“For our part, Canadian Tire did not do a good job of implementing the fees – largely because of how complex they are. Although we quickly fixed any incorrect fees, we still have customers every day asking us why two nearly identical products have different fees. We don’t have good answers – because the program itself isn’t built to be intuitive for either customers or retailers.”

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