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Sell IT hardware in Ontario? Your business is changing in a big way April 1st

As of April 1st, the Ontario government will apply recycling fees to most electronics sold in the province. And if you're not ready, you could be on the hook

If you’re a VAR or a reseller that does business in Ontario and you’re not aware of the province’s new electronics recycling fee and program, you could be in for a rude awakening come April 1st – and so could your pocketbook.

As of April 1st, most electronics products, from computers and monitors to peripherals, sold in Ontario will accrue a recycling fee that VARs and resellers will need to pass on to their customers, and may need to collect, report and remit to Ontario Electronic Stewardship (OES), the organization responsible for implementing the Waste Electrical and Electronic Equipment (WEEE) Program Plan for the Ontario government.

The first phase of the WEEE program covers desktop computers, laptops, computer peripherals, monitors, televisions and printers, with fees ranging from $13.44 for a desktop computer to 32 cents for a computer mouse.

Ontario electronics recycling fees

Effective April 1, 2009:
Desktop Computers: $13.44
Portable Computers: $2.14
Computer Peripherals
(Mice, Keyboards, Single Hard Drives, Optical Drives): $0.32
Monitors: $12.03
Televisions: $10.07
Printing Devices: $5.05

For more information, visit:
Ontario Electronic Stewardship

As of April 1st, any listed item sold in Ontario will need to have the fee attached and the product steward, defined as the brand owner, first importer or manufacturer, or a designated remitter, will be responsible for collecting the fee and reporting regularly to OES.

However, despite the rapidly approaching implementation date, some resellers are expressing concern the program has been poorly explained to the IT channel and frustration with the information they’ve been getting from OES about their obligations and responsibilities.

An executive with one major solution provider, which will find itself having to collect and remit the fees next month, said it only learned of the program by accident and is finding it difficult getting good information from OES to help it prepare.

“Probably the kindest words I could use is (this program) is poorly conceived,” said the executive. “It’s going to be brutal for us to administer and audit.”

Under the program, he said that it appears anyone who brings product into Ontario is considered a brand owner with responsibility for collecting the fee, but in the IT business product can come from many sources, and may be sold in another province entirely. It’s also unclear to him whether the fee will be embedded in the price or will stand alone.

As a national business working in multiple jurisdictions across Canada, he said it adds up to some real administrative and logistical challenges – an extra burden it won’t be compensated for.

“Our feet are being held to the fire on this, and there’s no upside for us. It’s just an expense,” he said. “I have nothing against the program, but I’m sure tons of companies out there aren’t even aware this is happening. Until two weeks ago, we had no idea. I don’t want to see a bunch of people caught off guard.”

Carol Hochu, executive director of OES, admits that the procedures around remitters IT resellers are still being finalized.

“The challenge with the April 1st launch is there are lots of pieces coming together, and it’s fast and furious,” said Hochu.

She does note that the OES Web site has been online for some time with information on the program, there has been public consultation, and Webinairs are being held for retailers on March 13th and 24th to brief them in more detail. They’re also working to make the system user-friendly, including allowing online reporting for IT sellers.

“I think the challenge we’re finding with the resellers and distributors is there are already established recycling programs in British Columbia, Alberta and Nova Scotia, and they’re all a little different, at least from Ontario,” said Hochu.

Hochu said the OES has been working with the major distributors to develop a framework around the collection of fees for the IT channel, and they hope to have a plan finalized shortly.

“I know people are concerned that April 1st is fast approaching and they need some time to get ready,” said Hochu. “We’re hopeful it will be finalized this week.”

While the April 1st implementation date is firm, Hochu said the first reporting date is at the end of April and the first payment deadline is at the end of May, and they’re looking at how they might be able to build some flexibility into those dates.

Tech Data Canada has been working diligently to prepare for the April 1st launch, according to the distributor’s controller, Daryl Rosien. He added they’ve also been working with the OES to get clarification on some aspects of the program and to ensure they’re passing the right information on to their customers.

While the implementation is still being finalized, Rosien said his understanding is that for resellers buying through distribution that operate strictly in Ontario the impact will be minimal. Tech Data will act as the remitter and handle the reporting requirements for its customer resellers, charging the fee to the reseller as a separate item on their invoice as appropriate.

Resellers will need to pass that fee on to their customers, and should ensure that any quotes or RFPs they give to customers for delivery after April 1st include the appropriate fees.

“In many cases the fees are much higher than the gross margin they’d make on the sale,” said Rosien. “If quoting for product to be delivered after April 1st, they need to be building that cost into the quotes they’re providing the end user.”

Where it could be more challenging is for resellers that sell product nationally. In this case, Rosien said the reseller may want to sign a remitter’s agreement and take responsibility for collecting and administering the fee, so the fee is only applied to product they sell in Ontario, and not product they import into Ontario and then sell elsewhere.