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					The Economic Benefits
of Recycling in Ontario




                     02/23/2012
Introduction


  AECOM was retained in 2009 to carry out study for Ontario
   Ministry of Environment (MOE) to look at the Economics of
   Recycling in Ontario.

  The focus was on:

                 The Existing Blue Box Program


                 Phase 1 - Municipal Hazardous
                 and Special Waste

                 Waste Electrical and Electronic
                 Equipment




                                             Page 2
Introduction (continued)


  The terms of reference were spawned by a series of similar
   studies in the US.

  The study was completed but not released.

  The material presented here today is extracted from the study
   with the permission of the MOE.

  Since the study was not publically released the comments and
   observations made today are those of AECOM. They are not
   attributable to MOE.




                                            Page 3
Time Frames


  Three time frames were employed:


       2002 – 2006: Historic Context
                                                A time of
                                                Economic
                                                 Turmoil
       2007: Benchmark Year



       2008 – 2012: Projection Years




                                       Page 4
Data Sources


  Key data sources:


               WDO Data Call

               Statistics Canada Inter-provincial
               Input / Output Model

               Two surveys – 1) Service
               Providers, 2) End-users

               US Studies – National; Florida,
               Michigan, California, New York,
               Pennsylvania , Main,
               Massachusetts, Delaware




                                                    Page 5
Some Terms


   Direct Effects                               Gross Domestic Product (GDP)
   •Initial changes in employment, income       •The value of final goods and services created in
    and output resulting from production         a particular time period
    spending in a subject sector


                                                Full Time Equivalent Job (FTE)
   Indirect Effects                             • A ratio of employment associated with a
                                                 business where 1 FTE represents a on person
   •Subsequent changes in employment,            working at full time hours
    income and output in all sectors that
    support sectors directly affected

                                                Labour Income
   Induced Effects                              •The sum of wages and salaries and
                                                 supplementary income
   •Subsequent changes in employment,
    income and output in all economic
    sectors as a result of income spending in   Gross Output
    direct and indirect sectors
                                                •The total value of sales related to a good or
                                                 service plus the value of intermediary goods or
                                                 service used in their production




                                                         Page 6
Two View Points




             Upstream                  Downstream
                (collection and          (re-use and
             processing, depot &         manufacture)
            transfer, promotion &
          education, administration)




                                            Page 7
Looking Downstream




    Upstream    Downstream

                                 • Paper Manufacturing
                             1

                                 • Plastics Manufacturing
                             2

                                 • Glass Manufacturing
                             3

                                 • Metal Manufacturing
                             4

                                             Iron and Steel
                                             Alumina and Aluminum




                                   Page 8
Input / Output

                                            Upstream Program
                                           Costs and Revenues




                                                                        GDP
 Economic                        Sector                   Economic      Labour Income
  Sectors   Interprovincial     Multipliers                Outputs      FTE Jobs
             Input Output                                               Gross Output
                 Model

                           AECOM IO
                        Allocation Model

                                                Downstream
                                              Commodity Sales
                                                into Sectors




                                                          Page 9
Material Diverted


 Between 2002 – 2007 recycled tonnage grew 25%, with almost all of this growth attributable to
  the Blue Box
 Between 2008 to 2012 recycled tonnage was forecast to grow by 9% with most of this growth
  attributable to the WEEE and MHSW programs.




                                                               Page 10
The Backdrop


                                                      Ontario Population
                                                       (Actual and Projected)
      16,000,000


      14,000,000


      12,000,000


      10,000,000


       8,000,000                                                                                                       Actual
                                                                                                                       Projected
       6,000,000


       4,000,000


       2,000,000


              -
                   2002


                          2003


                                 2004


                                        2005


                                               2006


                                                        2007


                                                               2008


                                                                      2009


                                                                             2010


                                                                                    2011


                                                                                           2012


                                                                                                  2013


                                                                                                         2014


                                                                                                                2015
                                                                                              Page 11
Blue Box Tonnes and Finances

1,000,000
 900,000
                                                                                            Blue Box Tonnes
 800,000                                                                                    Marketed
 700,000
                                                      Total Glass
 600,000
 500,000                                              Total Plastic
 400,000                                              Total Metals
 300,000                                              Total Paper
 200,000
 100,000
       -
            2002   2003   2004   2005   2006   2007


                                                                      $400,000,000
                                                                                                                               Revenues
                                                                      $350,000,000

                                                                      $300,000,000                                             Costs Administration

       Blue Box Costs                                                 $250,000,000
                                                                                                                               Costs Promotion and
       and Revenues                                                   $200,000,000                                             Education
                                                                                                                               Costs Depot and
                                                                      $150,000,000
                                                                                                                               Transfer
                                                                      $100,000,000                                             Costs Processing
                                                                       $50,000,000
                                                                                                                               Costs Collection
                                                                               $-
                                                                                     2002   2003   2004   2005   2006   2007




                                                                                              Page 12
Blue Box - Economic Outputs

$600,000,000                                                       GDP                              $340m
$500,000,000
                                                                   Labour Income                    $170m
                                       Administration
                                                                   Gross Output                     $560m
$400,000,000
                                       Promotion and
                                       Education
$300,000,000
                                       Depot and Transfer
$200,000,000
                                       Processing
$100,000,000
                                       Collection
                                                                              63 194
         $-                                                              194 2% 5%
               GDP   Labour   Gross                                      6%
                     Income   Output




                                                                                                     1,913
          3,430 FTE Jobs                                       1,064
                                                               31%                                   56%




                                                            Collection                 Processing
                                                            Depot and Transfer         Promotion and Education
                                                            Administration


                                                                         Page 13
Blue Box – Downstream Flows
              700,000
              600,000
              500,000                                                                        Market Paths
Tonnes




              400,000
              300,000
              200,000
              100,000
                   -
                         Paper    Metals   Plastic   Glass
         Outside Canada 149,289    8,163   11,191     1,223
         Canada         149,841     371    14,072    17,375
         Ontario        330,244   30,915   21,505    89,340




                                                                              90.00%
                                                                              80.00%
                                                         % of All Material    70.00%
                                                                              60.00%
                                                                              50.00%
              Ontario                                                         40.00%
              Capture                                                         30.00%
                                                                              20.00%
                                                                              10.00%
                                                                               0.00%
                                                                                         Paper         Metals   Plastic    Glass
                                                                             Brokers     12.77%        17.32%   26.61%     0.23%
                                                                             End Users   39.71%        61.04%   19.38%    82.54%



                                                                                                  Page 14
Blue Box – Downstream Flows
                   Composite Price Index for Blue Box Materials
                              (CDN$/Metric Tonne)
        $160
        $140
        $120
        $100
                                                                                                       The Recession
         $80
         $60
         $40
         $20
         $-
                   2002   2003   2004   2005   2006   2007   2008   2009
 Composite Index   $113   $114   $131   $124   $111   $145   $150   $66


                                                                                                       $321,858
                                                                                        $7,138,118




                                                                           $4,981,171
                                                                                                                                Paper

                            2007 Sales in                                                                                       Aluminium
                                                                                                                                Steel
                            Ontario = $54m                                 $2,537,466

                                                                                                                                Plastic
                                                                                                                                Glass

                                                                                                                  $38,810,281




                                                                                             Page 15
Downstream Outputs


    $140,000,000

    $120,000,000

    $100,000,000

     $80,000,000

     $60,000,000

     $40,000,000

     $20,000,000

                $-
                           Paper       Iron and Steel   Aluminum       Plastics         Glass      Combined
   GDP Total             $53,166,981    $4,302,593      $1,133,966   $7,145,116        $385,457   $66,134,113
   Labour Income Total   $29,073,643    $2,341,365      $699,663     $4,292,259        $232,744   $36,639,674
   Gross Output Total    $91,725,953    $9,780,458      $4,099,808   $15,568,965       $747,397   $121,922,581




                                                                             Page 16
Downstream Job Outputs


              800
                                                                                     733

              700
                       589        42              14        87              4
              600

              500

              400

              300

              200

              100

                -
                       Paper   Iron and Steel   Aluminum   Plastics        Glass   Combined
   FTE Jobs Induced     275          22             7         41             2       346
   FTE Jobs Indirect    182          10             4         15             1       210
   FTE Jobs Direct      132          10             3         31             1       177




                                                                 Page 17
MHSW and WEEE- Economic Outputs
                 Collection Cost,
 MHSW              $1,979,214


                                            GDP                          $12m
                                            Labour Income                $ 8m
                                            FTE Jobs                     160
                                            Gross Output                 $27m

 Processing
    Cost,
$13,788,890



                                              WEEE                               Collection
                                                                                   Cost,
                                                                                $15,773,967

                                               Refurb Sales,
        GDP                          $61m      $35,245,054
        Labour Income                $42m
        FTE Jobs                     835
        Gross Output                $144m

                                                                                 Processing
                                                                                    Cost,
                                                                                $30,968,234




                                                               Page 18
Total Upstream and Downstream All Programs



                       Upstream                  9,000
                                  Upstream &
                                                 8,000
 GDP                             Downstream
       $714 million                             7,000
       $770 million                             6,000

 Labour Income                                  5,000

       $356 million                             4,000
       $387 million
                                                 3,000

 Gross Output                                   2,000
       $1.2 billion                             1,000
       $1.3 billion
                                                    -
                                                                                              Total
 Jobs                                                    Direct       Indirect    Induced
                                                                                             Impact
       7,300                                                                FTE Jobs
       7,900                                  Combined   2,700         1,527        3,660   7,887




                                                                   Page 19
 Program Costs and Revenues


                      2007                      2012
               Costs      Revenues       Costs      Revenues
Blue Box   $      252 $        107   $      267 $        101
                                                                              Costs and Revenues
MHSW       $          9 $        1   $         41 $        4                      in $millions
WEEE       $         47 $       38   $         69 $       55
Total      $      308 $        146   $      377 $        160




                                                               $400

                                                               $350

                                                               $300
                 An Issue
                                                               $250
                    or                                                                                               Blue Box
                a matter of                                    $200
                                                                                                                     MHSW
               perspective?                                    $150                                                  WEEE
                                                               $100                                                  Total

                                                                $50

                                                                $-
                                                                      Costs      Revenues      Costs      Revenues
                                                                              2007                     2012




                                                                                     Page 20
Program Outputs




   Measure       Blue      MHSW     WEEE        Total       Waste
                 Box                          Recycling    Disposal
   Tonnes        902,500   16,340   18,700      937,540    9,375,000
   Jobs            4,875     140     1,145        6,160       6,245
   Jobs/1000t        5.4      8.7     61.1           6.6          .7
   Value Add/t     $ 530    $ 850   $ 6,000        $645         $ 49




                                                 Page 21
Downstream Outputs – Re-use and Re-manufacture, Equipment Supply




       Measure                      Blue Box                   WEEE             Equipment
                                    Material                   Material         Manufacture
       Tonnes                         1,092,0001                    8,640           902,500
       Jobs                                       755                 509             1,154
       Jobs/1000t                                  2.1                    59            1.2
       Value Add/t                             $ 188               $5,800              $ 93

        1 – includes tonnes obtained beyond subject programs




                                                                          Page 22
 Sector Comparison in the Ontario Economy




Measure       Recycling       Waste            Auto           Food          Chemical         Metal          Finance,
              Programs       Disposal                                                                      Insurance,
                                                                                                           Real Estate
Direct Jobs         2,200          2,900         95,500          57,500           24,600        30,750          474,400

GDP           $285 million   $386 million   $20.6 billion   $10.0 billion     $7.6 billon   $7.6 billion   $110.6 billion

% of GDP            .05%           .07%            3.8%           1.84%           1.41%           1.4%            20.4%




                                                                            Page 23
The Knowledge Cliff




 What we collect and process




                               Where does it go and how is it used




                                       Page 24
Three Questions on the Economics Front



                      1. What are the
                         costs?


                                                  3. What is the
                                                     value add?

    2. What are the
       revenues?




                                        Page 25
The Value Chain



   Assemble           Market                Sell products
    material          material              into markets

                                                                           Economic




                                                             Environment              Social



           Process                Create
           material              products




                                                            Page 26
Improving The Value Chain – Can we do Better?


                            Think
                           Synergy



             Think         Create                  Be
            Leverage       Value               Innovative




                           Have a
                            Plan




                                     Page 27
Going Forward


         • Track material flows to                 • Better understand the
   1       end users and brokers     6               WEEE re-use and
                                                     refurbishment markets


         • Track location of end                   • To replicate US studies
  2        users                     7               there is a need to look
                                                     at all recycling efforts

                                                   • Set of annual reports
         • Inventory and profile
  3        recycling industries      8               needed to show
                                                     economic contribution
                                                     of waste management
         • Understand how
                                                   • Need standard
  4        recycled materials are
           used and their
           importance
                                     9               reporting frameworks
                                                     and reporting models

                                                   • Need to evolve some
  5      • Update this report with
           current information       10              different business
                                                     models




                                         Page 28
In the end




     Why be bothered?
     … “because if you don’t know where you are going you might
     end up someplace else.”
                                                        Yogi Berra




                                              Page 29
Thank you for your time.

Any Questions?




                                     Andy Keir
                                     AECOM
                                     519 840 2242
                                     andy.keir@aecom.com




                           Page 30

				
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