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The Pandemic, E-Commerce and Eco-Fees

Posted on September 22, 2020

We’ve experienced several changes since the pandemic started. Some, which would ordinarily have taken 10 or even 20 years, have advanced dramatically in a short amount of time. Take telework and e-commerce, for example. In just six months, we’ve made the equivalent of 10 years of progress in these two areas!

The pandemic has also encouraged businesses to innovate, change their ways of doing things and reassess their target clientele in order to survive and avoid wastage. In spite of the economic uncertainty, many businesses are seeing their profits increase. (You're probably wondering what this has to do with the eco-fees mentioned in the title. Patience, I’ll be getting to that very soon!)

I've been a member of the Réseau des femmes d 'affaires du Québec for several years now and my company has been certified a Women’s Business Enterprise by WEConnect International. I rub shoulders with many Canadian businesswomen, in start-ups or growing businesses, and whenever I explain that at some point they'll have to pay fees (eco-fees, like in the title 😉) on the packaging for the products they are selling, I see the same questioning look on their faces. “Eco-fees on packaging? Isn't that just for TVs and computers?”

Extended Producer Responsibility

They never heard of these eco-fees when they were developing their products, designs and packaging. Yet, when they started their business, they consulted a host of professionals and organizations, like an accountant, a lawyer, a business coach, chambers of commerce, Revenu Québec and more. None of them mentioned that in Quebec, and in four other provinces (British Columbia, Manitoba, Ontario and Saskatchewan), businesses that sell products directly to consumers (business-to-consumer, or B2C), are required to make a financial contribution to compensate for the costs associated with curbside recycling.

This compensation is an integral part of the concept of extended producer responsibility, holding producers accountable for the residual materials produced in the consumption of their products. In this case: containers, packaging and printed matter destined for the residential sector. This includes shipping boxes and other protective packaging used in delivering online orders, which are too often omitted from the reports.

While the percentage of responsibility differs by province, businesses still need to register on several portals and produce an annual report declaring the types of materials used to make their containers, packaging and printed matter, including the total weight put on the market, per province. More expenses to add to the ledger!

Businesses must register with the Canadian Stewardship Service Alliance (CSSA) and Éco Entreprises Québec (ÉEQ) and declare the containers, packaging and printed matter they put on the market annually.

Did you do this for your 2019 sales? If not, don’t panic. There is some good news:

Each of the five provinces have payment exemption criteria. In Quebec, for example, the criteria are:

  • The business generated less than one million dollars in sales.
  • The total weight of the packaging put on the market is less than one ton (1,000 kg or 2,205 lb.).
  • The business, which is not operated as a franchise, has only one point of sale and its surface area is less than 929 m2 (10,000 sq. ft.).2 (ou 10 000 pi2).

Now that you know about eco-fees, will your business be able to claim an exemption or will it have to pay them?