Just over eight months after Ontario Electronic Stewardship (OES) launched its electronics recycling fee program, the organization is re-examining its fee structure in a move that could lead to higher fees on certain electronic devices purchased in the province of Ontario.
While reviews of the fee structures will be standard practice periodically, the review comes against the backdrop of the OES, which operates the e-waste recycling program on a break-even basis, having underestimated laptop sales and overestimated desktop sales in its budget forecasts. With desktops incurring a levy of $13.44 and notebooks just $2.14, that has left the OES with a potential revenue shortfall.
OES executive director Carol Hochu told CDN that the organization is currently in the process of reviewing its fee structure to see if it has the methodology correct, and it does have the ability to tweak the numbers without government approval as long as it’s not a material change to the program.
“The pace of technology change has had an impact on our revenues. We made certain assumptions of this many portables versus this many desktops, and we’re finding sales of portables up quite a bit with desktops dropping,” said Hochu. “It’s had a material impact on our revenues.”
That’s backed up by Canadian client PC market figures from analyst firm IDC Canada. For Q2, IDC reported a 9.9 per cent increase in portables shipped, while desktop shipments dropped by 36.8 per cent over the year-ago quarter.
Hochu said the OES plans to communicate with its stewards (the first importers of electronics responsible for collecting and remitting the fees) as soon as possible, either by Webinar or memo, to outline the situation, propose new fees, and invite feedback. Knowing that December is a busy time for the industry, she said late December or early January is the likely timeline for consultation. Any new fee structure would go into force for April 1st, 2010.
Frank Haid, vice-president, sales for distributor Tech Data Canada, said they haven’t hears about changes to the fee structure from the OES yet, but he added such a move would make sense.
“I can certainly understand how they’d underestimate. I’d take that to be the netbook phenomenon, as they’ve certainly been flying off the shelves and skewing the numbers,” said Haid. “It makes some sense they’d adjust accordingly.”
Tech Data Canada controller Daryl Rosien, who has led the distributor’s efforts to keep its partners up to speed on the program, said other provinces with e-waste programs have adjusted their fee structures recently, and while notebook fees may have been tweaked slightly upward, overall most fees have actually gone down.
“(The portable fee) is a relatively small amount (of the purchase price), so even if it were to double I’m not sure it would have a huge impact,” said Rosien. “Presumably the cost is passed on to the end-user, and if the end-user pays $5 more for a laptop I don’t think it will be a big difference.”
Eight months after program launch: No news is good news
While the channel was taken by surprise in the lead-up to the April 1st program launch as it scrambled to get more information about its responsibilities under the program, after some initial hiccups Hochu said the program is now running smoothly and has been a good success over it first seven months.
By the end of October the program had collected 9.1 million kilos of e-waste, and developed a robust and growing network of both permanent and special event collection sites around the province. Shortly seven primary waste processors will be in place, with another three pending and others applying. Also, 800 organizations have registered as stewards/ remitters of fees.
“Obviously I have my perspective and maybe the IT community has theirs, and certainly when we launched the program in April there were some bumps in launch and implementation,” said Hochu. “But I think things are moving smoothly now in terms of the reporting and payment of fees.”
After some initial challenges in getting the right information about the program and processes and communicating it to the IT channel, Tech Data’s Haid said the channel now appears to be onboard with the program.
“We get the impression that most resellers, whether it be begrudgingly or not, have accepted this and its part of the normal business cycle now,” said Haid. “Maybe that’s a factor that as a generation we recognize the day of green reckoning is going to come. But (the program) isn’t really a topic of conversation when I get in front of resellers.”
Rosien agrees that after some initial stumbles and some reseller concern over getting good information from the OES, things appear to have stabilized and the initial challenges have been overcome.
“It’s not perfect, but people have learned to accept it,” said Rosien. “People don’t necessarily like it, but they’ve learned to love with it and they’re moving on.”
Phase II is comingIt’s worth remembering however that only phase one of the Ontario program is currently in place. The OES is preparing to launch phase two in April, which will see fees applied to a broad new range of electronics, including telephones, cameras, and audio and visual playback equipment, such as DVD players.