THE BLOG

Is MMBC A Four-Letter Word For Small Business?

02/09/2014 11:34 EST | Updated 04/11/2014 05:59 EDT

As the only jurisdiction to publicly measure red tape, the B.C. government deservedly received its third "A" letter grade in a row -- the highest in the country -- on the annual Canadian Federation of Independent Business (CFIB) red tape report card.

Fighting red tape is now central to the mandate of Christy Clark's government. Upon their swearing-in last June, each member of her cabinet was sent a letter from the premier with instructions "to eliminate red-tape so that we can get to yes on economic development without needless delay."

But soon new laws take effect that run counter to B.C.'s red tape-cutting crusade.

In May 2014, a massive waste recovery program overseen by multinational corporations such as Proctor & Gamble, Coca-Cola, Unilever and Walmart, and run out of an Ontario office, will be launched in British Columbia. While most of us have never heard of Multi Material BC (aka MMBC), we are all about to hear a lot more about them while it drives up the price of goods we buy, and negatively impacts our economic recovery.

Though thousands of small businesses were going to help pay to run the program, no one bothered to consult with small business owners before this "extended producer responsibility" legislation was passed in 2011. In fact, the program was designed by and for big businesses, not small.

Sold as a shift from general taxpayers to business, B.C. consumers could start to shoulder tens of millions in annual costs embedded in the goods they buy. The new scheme involves MMBC -- a private organization that has been given near monopoly control over the collection of all curbside waste materials in our province.

Until the CFIB raised the alarm last summer, tens of thousands of small business owners were slated to be on the hook for an immediate requirement to record, track and eventually remit payments for any printed paper or packaging they used on consumer goods. The plan is so wrapped up in red tape that it earned CFIB's first ever national "Paperweight Award."

ANTI-GROWTH INCENTIVE

In reaction to growing criticism, a so-called "1-1-1" exemption -- a sales threshold of $1 million in gross revenue, produce one tonne of paper and packaging waste, or if they own only one store -- was announced by Minister of Environment Mary Polak. It was meant to assuage concerns of approximately 30,000 to 50,000 B.C. small businesses who fall below those benchmarks.

What the government did not intend was to create the perfect anti-growth incentive for small business. Any business owner contemplating opening a second location, or hiring new staff or increasing sales will ask themselves if it is worth the cost of MMBC's onerous fees and strict regulations.

MMBC tries to downplay the impact of their ill-considered scheme. They say only "2,000 to 3,000" businesses will be impacted. As in, "Move along, folks, nothing to see here. It's just 3,000 businesses we're planning to put the squeeze on."

It is now less than four months away and most business owners are still in the dark on whether they need to comply or not, or what the consequences of non-compliance are. Letters circulated last summer by MMBC threatened $200,000 fines, which have caused many sleepless nights for small business owners since.

In an October CFIB survey, small business owners were asked if they understood their obligations with respect to new paper and packaging waste disposal regulations. An astounding 73 per cent responded they knew little or nothing about MMBC's program.

Many businesses who do know about MMBC are hopping mad about it.

WHAT YOU'LL NOTICE

B.C. municipalities are now inking deals with MMBC that permit the organization to use their waste collection infrastructure -- such as trucks and transfer stations, all staffed by public employees. But because municipalities are not obligated to lower the fees they charge households for this collection, citizens may see little or no reduction in their tax bill.

What British Columbians will likely notice, however, is the increased price of goods resulting from MMBC's fees.

The double-dipping on our wallets is just one of the serious problems this new scheme faces. Do you like to put glass in your blue box each week? Well, too bad because MMBC will not collect it. Some cities are forking out for separate glass collection, while others are opting out.

An MMBC fee schedule circulated by the Canadian Stewardship Services Alliance should send a chill through B.C.'s small business sector. Rates are pegged at two to five times those in neighbouring provinces.

On cardboard, for example, businesses are charged at eight cents per kilogram in Ontario, while MMBC is charging 29 cents here in B.C. So it goes for plastic film -- 23 cents in Ontario, 29 cents in Manitoba, 54 cents in B.C. And for glass packaging: it costs three cents per kilogram in Ontario, six cents in Manitoba, 25 cents in B.C.

Small businesses that are already getting greener and cleaner could be responsible for thousands of dollars of fees that they must pass on to their customers. If you like to shop or eat in B.C., get ready to be walloped by new hidden taxes on everything from clothing to groceries.

While the backlash is growing against MMBC, it is not too late for the government to change course. Before May, it can exempt small business from this ineffective and costly public policy, and avoid the job losses and the hidden taxes that will hit your household hard.

Mike Klassen is director of provincial affairs, British Columbia, for the Canadian Federation of Independent Business, and is a member of the B.C. Small Business Roundtable.

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