Technological watch

Industry says Canada's 'toxic' label on plastic will scare off investment

The plastics industry used an April 12 government hearing in Canada to strongly push back against a proposal to declare plastic products "toxic" under Canadian environmental laws, saying it would deter investment.

While the online hearing in Parliament saw lengthy debates around how best to tackle plastic waste, leaders of Canada's plastics trade association and the CEO of Husky Injection Molding Systems Ltd. said the tougher rules could put a brake on growth.

"We have largely become a flyover destination for chemistry sector investment … and the listing of all plastic manufactured items as toxic will exacerbate that," said Bob Masterson, president and CEO of the Chemistry Industry Association of Canada.

The industry was reacting to a broad plan from the Canadian government, first made in October, that would officially declare plastic a toxin regulated under the Canadian Environmental Protection Act.

Other parts of the plan seek to ban single-use disposable products including retail bags, straws and cutlery, as well as make it a national priority to tackle plastic waste with recycled content standards and producer responsibility.

But it was the idea to list plastics under CEPA that seemed to generate the most pointed concern from industry at the hearing in front of the Standing Committee on the Environment and Sustainable Development.

Government officials say the CEPA label would give agencies more tools and authority to manage plastic along its life cycle.

But plastics executives say it will scare away funding that would drive future jobs and growth, including in making plastics more recyclable.

"The biggest economic impact that will arise from the proposed federal actions will be the effect on future investment opportunities," Masterson said. "We think it sends a very negative signal to the global industry to list all plastic manufactured items as CEPA toxic. It sends a message that Canada's ambivalent at best, if not actually in opposition to, growth and investment in the sector."

He told Parliament that the petrochemical sector in the United States has attracted $300 billion in investment in the last six years.

But Canada, with about 10 percent of the population of the U.S., has not attracted the $30 billion he said it should have.

"We've seen very little of that here and we should have seen more," Masterson said.

Elena Mantagaris, vice president of plastics for Ottawa-based CIAC, said smaller plastics processing or recycling companies are questioning what the federal listing and bans would do to their business plans.

In particular, she mentioned an unnamed Montreal plastic bag recycling firm that said a ban on bags would shift investment to the U.S.

"I think many of our members are questioning whether future investments in this country are feasible, whether it's in the recycling sector or just in the plastics production sector in general," she said, estimating that large-scale plastic product bans in Canada could cost at least 13,000 jobs and likely more.

Similarly, Husky President and CEO John Galt said he's aware of a PET packaging and recycling firm that's put investments on hold, and he argued that others are making similar calculations.

"Since this legislation has been [introduced], Husky and many of our customers and co-suppliers to the industry have put our investments in Canada on hold," Galt said. "The right solution, in my opinion, is to engage our industry and its 1,700 small and medium-sized businesses in the solution. The development of the circular economy will create jobs."

The Canadian plan has also drawn criticism from the U.S. industry. The Plastics Industry Association in Washington reiterated in response to the hearing that it sees the CEPA designation as a nontariff trade barrier that will disrupt $12 billion in cross-border trade in plastics.

Publication date: 16/04/2021

Plastics News - packaging

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Last update: 2022-01-31