Appreciate the…

Appreciate the confidentiality of these comments:

PROPOSED AMENDMENTS TO TIRES AND OTHER PRODUCER RESPONSIBILITY REGULATIONS

Comment Submission

ITEM 1: Expand the existing “call-in” collection requirement to any site that generates tires and add a guaranteed response time – Tires

Kal Tire Position:
Kal Tire, as a producer with a PRO and a collection site (tire retailer/dealer), supports establishing a more precise collection timeline and would recommend adopting a standard measure of 30 or 60 days, rather than using monthly timeframes, to improve clarity and precision in interpreting the policy. For some stores across the province, there may be a need to have a different agreed upon, in writing timeframe, to allow for cost control and efficiencies for some stores, particularly those in more remote locations.

Adopting a clear and precise timeline is critical to maintain safety at collection sites, especially during the peak seasons, since collection sites are required to accept returned tires at all times and from any source, without discretion. This change will eliminate long-term accumulation at non-network sites and would be highly beneficial for the industry.

We believe that this change should apply to all sizes of tires, from passenger to OTR tires.

Additional feedback:
• We believe that an allocation based on market share is fair, provided that market share is recalculated annually.
• The pick-up time of 30 & 60 days, is appropriate. However, the threshold of 50 tires is only reasonable for passenger and commercial tires. When applied to OTR tires, this volume is too high to signal a pick-up. For OTR tires, the space required to store 50 tires creates significant operational constraint and safety concerns. We recommend that a lower threshold be established – approximately 20-25 tires –as the pick-up trigger for tires classified as OTR sizes.
• At a minimum, standards should apply equally to all participants, regardless of whether they are operating within a PRO network or outside of it. But PRO should be allowed to offer higher or enhanced services levels withing their own networks (for example, faster pick-up, lower volume threshold). With such flexibility, PRO would be able to differentiate themselves on service quality and efficiency. A prescribed number of collection sites should not be required, as this will potentially increase costs of the system without delivering meaningful improvements. The number of collection sites should be determined by market demand, tires sales and the addition of new tire retailers over time. The challenge within the system is not a shortage of collection sites, but rather the timeliness and efficiency of service at existing sites.
• Not all retailers are producers and have a PRO, therefore there needs to be a mechanism for to engage and have collection, none of the PROs will want to go to thunder Bay to collect tires, for example, how to they ensure the system is aware of the need for collection of 50 tires – a mechanism is required.

ITEM 2: Add a new requirement that collected tires must be managed within 3 months of pick-up – Tires
Kal Tire Position:
We believe that the proposed change to add a requirement that all tires (whether they are to be counted towards meeting management targets or not) be managed by a registered processor or retreader within 3 months of being collected from a site is a positive improvement and will support more efficient processing and understanding of the collection need and how to best set collection standard amounts. This change will also allow for a clearer understanding of Ontario’s processing capacity and help identify opportunities to improve service competitiveness and efficiency.

For tires do not need to hit management targets and the use of landfill or EFW, we recommend these be used in limited ways – cost control and efficiency but not at the expense of the core purpose of system. The consumer, while not responsible for the fees, fees are passed to customers, and they expect a tire to be recycled, not landfilled – especially when every tire has a recycling cost associated to it. While EFW is a form of reuse, it should be used minimally.

Clarification is required on who is to bear the cost of tires collected but does not count toward management requirements needs clarification. While a retailer can send excess directly to landfill at the expense of the retailer, we understand the intent of this proposed amendment implies the producers are responsible for every tire including those over the management requirements set, and the PROs, as producer service providers, will be responsible on their behalf for the costs based on market share (leading to the clearinghouse model).

Additional Feedback
• The 3-month period is a reasonable timeframe for the retreading side of the processing equation and will allow tires to be processed in a timely manner. However, with respect to tire reduction processes (i.e. production of tire crumb products), we do not have the operational experience to offer feedback.
• EFW processing solutions will have minimal impact on retreading, which remains the primary recovery and circularity option at end of use. The market forces for tire casing collection and resale should ensure quality casings for retreading are returned to the system where it is cost efficient to do so.

ITEM 3: Revise recycling efficiency rate (RER) requirements – HSP

Kal Tire Position:
No feedback or insight to provide for this proposed change.

ITEM 4: Administrative change to clarify collection site requirements – HSP

Kal Tire Position:
No feedback or insight to provide for this proposed change.

ITEM 5: Remove the $1 million cap – Administrative Penalties (AP) Regulation

Kal Tire Position:
Kal Tire supports the proposed change as identified, with confidentiality of each PRO remaining essential to maintaining a competitive system.

ITEM 6: Rules for shared PRO activities – Tires, HSP, Batteries, EEE

Kal Tire Position:
Kal Tire supports Approach #2 for tires. We cannot comment on all additional blue box items, but we are in support of a more standardized and efficient system.

Additional Feedback
• We recommend that RPRA should be responsible for establishing the clearinghouse and should define the parameters of the system to ensure the fairness and preservation of the competitive nature of the system. By having one centralized clearinghouse, all PROs would be operating under the same rules. We believe that every PRO should be required to participate to avoid the creation of multiples parallels systems within a single market. PROs should be responsible for contributing/creating the framework to the recommended framework and for providing ongoing improvement recommendations to support the evolution of the clearinghouse.
• We recommend that an independent third party should operate the clearinghouse with oversight from all participating PROs and RPRA.
• We support that the clearinghouse will provide the current market data to support annual adjustments to the collection management requirements, based on market fluctuations that come with dynamics of things like pandemics, trade wars, cost of rubber, inflation, etc.

ITEM 7: Increase Ontario based recycling – Tires

Kal Tire Position:
The proposed change is not supported by Kal Tire. The introduction of tiered processing requirements would add to the cost and complexity of the system and may drive the use of less cost-effective options. While Kal Tire wants the existing processing to be maximized where appropriate, bringing tires from remote regions to a centralized area like Burlington would be more costly than using processing solutions outside of Ontario (for example Kenora and Thunder Bay are far closer to Manitoba and should not be conserved a disadvantage for responsible recycling in Manitoba, given the cost of transport).
The balance between cost control and producer optimization should be a competitive choice. We suggest that there is no need to force volumes to one processor over other options in or out of province. This proposal does not resolve a market failure but instead adds to the complexity of the system.

Additional Feedback
• Retreading, an end of use processing activity, does not increase or decrease the volume of material that ultimately ends up in end-of-life processors. However, if the argument is that more tires would be collected without, the more reasonable solution would be to increase the management targets, increasing from 65% back up. This is the benefit of the clearing house recommendation, it will provide direction to increase appropriately to match the market, including the retreading volumes.
• Retreading is the highest form of recycling and circularity as it returns the greatest amount of product back to the original product and into the market. We recommend that retreading should continue to count toward management targets. The Producer model in Ontario is the only model nationally that support and rewards retreading for being part of the solution, in an industry that is significant decline based on tire dumping in Canada. Ontario system dollars can be reinvested into retreading competitiveness to continue to provide high quality Ontario made product into the province at a competitive value.

Additional Insight

There is a growing market of customers who are buying tires from offshore markets and delivered direct to the consumer (at place of operation – no retailer). These tires are entering the marketplace without participation in producer responsibility; however, the volumes are recycled into the ecosystem creating a volume burden.
Those who do import directly 1) either do not know about the system; 2) are averse to the fees and under the radar or 3) want to be compliant but do not know how.
Regardless of the position of the direct importing organization, data suggest that a growing number of customers and tires in Ontario and nationally.
We would welcome the opportunity to provide additional data and insight in this matter to support the ecosystem along with other tire retailers who may be seeing the same customer behavior shifts.