Recovery Strengthens Canadian Market

On the whole, the recycling industry in Canada is stronger this year than it was last year, reports Len Shaw, executive director of the 180-member Canadian Association of Recycling Industries (CARI).

“There is still some consolidation going on, but not as much as in previous years,” he adds. “Philip Services Corp. (based in Hamilton, Ontario) has fended off bankruptcy proceedings, and there are a number of new start-up firms. There seems to be an awful lot of activity lately.”

Jack Lazareck, president of Logan Iron and Metal Co. Ltd., a metals recycler based in Winnipeg in western Canada, is certainly a little more positive than he was last year. While last year, he wasn’t foreseeing any improvement in the near future, he now says that the industry isn’t doing too badly.

And e-commerce is beginning to change the way Canadian metal recycling firms do business, CARI’s Shaw reports. “I don’t expect to see a tremendous impact this year,” he says. “The natural inclination of our industry has been to adapt slowly to newer technologies.”

The impetus, he notes, is coming particularly from larger consumers such as automotive companies. They are putting their bidding processes online. “Our industry is going to have to change to respond to that,” Shaw says.

Some of the nonferrous prices have been falling over the first part of the year, Shaw cautions, and, while stainless steel prices are going up, the mills have an oversupply so that it makes for difficulty in selling steel.

A SIZABLE INDUSTRY

Michael Clapham, Industry Canada’s new senior environmental specialist in minerals and metal recycling, reports that the industry in Canada consists of about 1,000 companies who employ 15,000 people.

Canada annually recycles between 10 and 11 million metric tons of metals and metal-bearing materials valued at about $3 billion. The numbers have been slipping, however, over the past three years.

While 1997 was a record year both in tonnage shipped—at 5,449,000 metric tons—and value ($3.4 billion Canadian), 1998 tonnage was down to 5,391,000 metric tons and earnings were down even more ($2.9 billion Canadian) reflecting low commodity prices worldwide. Last year’s figures show a further decline with tonnage shipped down to 5,019,367 metric tons with a value of $2.6 billion (in Canadian dollars).

While copper, steel and aluminum prices are up somewhat, the price for lead remains particularly low, says Bruce McIver, a vice-president of Montreal-based Nova Pb Inc., Canada’s largest integrated lead recycling facility. “The last time that lead was selling for 20 cents a pound was back in November, 1993,” he says. “In 1997, it was 28 cents per pound. In 1996, the price was 31 cents a pound. That is a drop in value by one-third, while raw material costs are the same and conversion costs are up.”

He cites tremendous exports out of mainland China for the low figures.

Nova Pb was built by Preussag AG of Germany in 1980. It is the only lead recycling operation in North America equipped with a completely closed-loop air and water circuit to ensure compliance with all environmental norms by a considerable degree, according to McIver.

Lead battery recycling is one of the major success stories in the recycling industry, McIver points out, and last year was a record year for battery shipments (more than 100.5 million units). Nova does most of its business with American companies, according to McIver, because most Canadian battery manufacturers have closed down within the last few years. Only Exide near Toronto and Delphi, a division of General Motors, in Oshawa, continue to operate.

“I don’t think it was the Free Trade Agreement that did in the industry in Canada,” McIver comments. “Rather the Canadian manufacturers were perceived as non-competitive. They lacked economies of scale and didn’t automate fast enough.”

Because Nova is located just 50 miles north of the border of New York State, the company is well placed for doing business in the United States. Nova is protected by the swings in the price of lead in large measure because a lot of its business is tolling—the process of picking up batteries from retailers and renewing them all at a fixed price.

PICKING IT UP

At the municipal recycling level, the big story is the creation in Ontario of a province-wide Waste Diversion organization with a budget of $14.5 million (Canadian) for this year. The funding is provided by industry.

“On the program side, we are charged with implementing pilot projects to do with composting, establishing more household hazardous waste depots and optimizing curbside recycling systems,” explains board member John Hanson who also heads the Recycling Council of Ontario.

“We have established a number of committees and sub-committees,” Hanson says. “We are expected to have a report ready for the Minister of the Environment by September with recommendations on a sustainable funding formula and new regulations among other things. We are looking at a budget of $54 million next year with half of the funds coming from industry.”

The Recycling Council, Hanson reports, is managing the consultative process and assisting the Government of Ontario in hammering out new laws. Hazardous wastes coming in from the U.S., for example, are a concern in Ontario, he notes.

“Our regulations concerning the disposal of hazardous waste are not as stringent as American rules,’ Hanson says. “Thus, the importation of hazardous wastes into our province have increased four or fivefold. We are concerned about what is going into our landfill sites. A couple have been shut down because their standards were inadequate.”

In curbside recycling news, Hanson reports that dairy product containers are being added to recycling programs in different provinces. The dairy industry has agreed to ante up funds for recycling its containers in the western provinces of Alberta and Saskatchewan, and Nova Scotia in the Maritimes, while the containers are being added to the deposit system in British Columbia, Canada’s westernmost province.

“In British Columbia,” Hanson says, “the Encore Pacific Industry Association that manages the deposit system has recently introduced a new user pay system with consumers paying anywhere from one cent to seven cents handling fees depending on the container.

“We are anticipating new regulations in Quebec to do with their Blue Box program and hazardous wastes,” Hanson continues. “They were supposed to be in place by last November. Now it looks like it will be June or maybe the fall.”

In Ontario, he says, there is high interest in organic waste disposal systems. The city of Guelph has Canada’s only “wet and dry” facility thus far. The $32 million plant built five years ago divides residential and industrial wastes into wet and dry streams. While the dry side works well, managing the residual waste on the wet side has been problematic.

The plant management, Hanson reports, is contemplating adopting a three-stream system and is currently testing a new technology. The Subbor anaerobic digestive system is capable of handling 100% of the waste stream. The city of Newmarket, just north of Toronto, is installing a Subbor system and there is strong interest in the small Maritime province of Nova Scotia.

“Nova Scotia has the most comprehensive recycling policies in North America,” Hanson says.

RULES AND REGULATIONS

On the national scene, Michael Clapham says there are some key policy issues under discussion—notably the differentiation between hazardous wastes destined for final disposal and hazardous recyclables destined for recovery operations—that could have major implications for increased recycling.

“On the domestic front,” he says, “this will involve the new Canadian Environmental Protection Act and Canadian Council of Ministers of the Environment definitions which differentiate between hazardous materials for final disposal and recycling.”

Internationally, Canada continues to participate with other nations meeting in Basel, Switzerland, in establishing environmentally sound management of recyclable materials as well as listing them as either hazardous or non-hazardous.

“Being relatively new to this role, I am still trying to understand the structure and size of the scrap metal industry in Canada. My department is gathering names and addresses of all those involved to put in a database. We are also trying to raise the profile of the industry. We want to make the public more aware of how important the industry is to our economy,” states Clapham. RT

The author, based in Winnipeg, Manitoba, writes frequently on the Canadian scrap and recycling industries.