Q-2, r. 10 - Regulation respecting compensation for municipal services provided to recover and reclaim residual materials

Updated to 28 December 2013

This document has official status.

chapter Q-2, r. 10

Regulation respecting compensation for municipal services provided to recover and reclaim residual materials

Environment Quality Act

(chapter Q-2, ss. 53.31.2 à 53.31.6, 53.31.12, 53.31.12.1 and 53.31.17).

DIVISION I PURPOSE

1. This Regulation determines certain parameters of the compensation regime under subdivision 4.1 of Division VII of Chapter I of the Environment Quality Act (chapter Q-2) whose purpose, together with other legislative measures ensuring residual materials management, is to prevent and reduce the impact of residual materials on the environment.

More specifically, this Regulation designates the materials or classes of materials to which the compensation regime applies and determines the calculation method and the performance and efficiency criteria used to determine the annual compensation.

The Regulation also provides a minimum framework for the schedule of contributions that must be established pursuant to section 53.31.14 of the Act by establishing exemptions for certain persons in respect of certain materials and by targeting the persons that alone may be required to pay contributions in respect of certain materials.

The Regulation also determines the indemnity payable to the Société québécoise de récupération et de recyclage by the persons to whom the compensation regime applies, and related payment terms and conditions.

O.C. 1049-2004, s. 1; S.Q. 2011, c. 14, s. 15.

DIVISION II CLASSES OF MATERIALS SUBJECT TO A CONTRIBUTION

2. The compensation regime under subdivision 4.1 of Division VII of Chapter I of the Environment Quality Act (chapter Q-2) applies to the following classes of materials:

(1)  containers and packaging: this class includes all flexible or rigid material, for example paper, carton, plastic, glass or metal, and any combination of such materials that

(a)  is used to contain, protect, wrap or present products at any stage in the movement of the product from the producer to the ultimate user or consumer; or

(b)  is intended for a single or short-term use and designed to contain, protect or wrap products, such as storage bags, wrapping paper and paper or styrofoam cups.

However, this class excludes pallets designed to facilitate the handling and transportation of a number of sales units or grouped packagings, and containers and packaging that are included in other classes of materials;

(2)  newspapers: this class includes paper and other cellulosic fibres used as a medium for written current affairs periodicals published on newsprint, particularly dailies and weeklies.

This class also includes containers and packaging used to deliver newspapers directly to the ultimate consumer or recipient;

(3)  printed matter: this class includes paper and other cellulosic fibres, whether or not they are used as a medium for text or images, except books and materials in the newspapers class of materials.

This class also includes containers or packaging used to deliver printed matter directly to the ultimate consumer or recipient.

O.C. 1049-2004, s. 2; S.Q. 2011, c. 14, s. 15; O.C. 1302-2013, s. 1.

DIVISION III RULES REGARDING THE PAYMENT OF CONTRIBUTIONS

§ 1 . — Containers and packaging class

3. Only the owner of a brand, a name or a distinguishing guise may be required to pay a contribution pursuant to a schedule of contributions established under section 53.31.14 of the Act in respect of

(1)  containers and packaging used in the commercialization or marketing in Québec of a product or a service under that brand, name or distinguishing guise; and

(2)  containers and packaging identified by that brand, name or distinguishing guise.

If the owner referred to in the first paragraph has no domicile or establishment in Québec, the first supplier in Québec of the products or of the containers and packaging, other than the manufacturer, may be required to pay the contribution, whether or not that supplier is the importer.

For the purposes of this section,

— ­“brand” means a mark that is used by a person for the purpose of distinguishing or so as to distinguish products or services manufactured, sold, leased, hired or performed by the person from those manufactured, sold, leased, hired or performed by others, but does not include a certification mark within the meaning of section 2 of the Trade-marks Act (R.S.C. 1985, c. T-13);

— ­“distinguishing guise” means the shaping of containers or packaging, the appearance of which is used by a person for the purpose of distinguishing or so as to distinguish products or services manufactured, sold, leased, hired or performed by the person from those manufactured, sold, leased, hired or performed by others;

— ­“name” means the name under which any business is carried on, whether or not it is the name of a legal person, a partnership or an individual.

O.C. 1049-2004, s. 3.

4. The following special rules apply in respect of containers or packaging added at retail outlets, whether or not the containers or packaging are included in section 3:

(1)  payment of a contribution may not be required from the manufacturer of those containers or packaging or of a person having added containers or packaging at a retail outlet, subject to paragraph 2; and

(2)  where a retail outlet is supplied or operated as a franchise or a chain, under a banner name, or as part of another similar form of affiliation or group of businesses or establishments, the contribution for containers or packaging added at the retail outlet is payable by the franchisor, owner of the chain, banner or group, as the case may be, or if the franchisor, owner of the chain, banner or group has no domicile or establishment in Québec, by their representative in Québec, or where there is no representative, by the retailer.

O.C. 1049-2004, s. 4.

5. The following are exempt from paying a contribution in respect of the containers and packaging in relation to which they are already required to take recovery or reclamation measures:

(1)  persons who are already required under a regulation made under the Environment Quality Act (chapter Q-2) to take measures or contribute financially towards measures to recover or reclaim containers or packaging;

(2)  persons already required under a consignment system recognized under Québec law to take measures or contribute financially towards measures to recover or reclaim containers or packaging, such as beer and soft drink non-refillable containers; and

(3)  persons who are able to establish that they participate directly or contribute financially towards another system to recover and reclaim containers or packaging that operates on an established and regular basis in Québec, such as the program for the recovery of refillable beer bottles existing on 24 November 2004.

O.C. 1049-2004, s. 5.

§ 2 . — Newspapers and printed matter classes

O.C. 1049-2004, sd. 2; S.Q. 2011, c. 14, s. 16.

6. Only the owner of a brand, a name or a distinguishing guise identifying material included in the newspapers or printed matter class of materials may be required to pay a contribution pursuant to a schedule of contributions established under section 53.31.14 of the Act in respect of that material.

If the owner has no domicile or establishment in Québec, payment of the contribution may be required from the first supplier in Québec of the newspaper or printed matter, whether or not that supplier is the importer.

For the purposes of this section, “brand,” “name” and “distinguishing guise” have the meaning assigned to those terms by section 3, with the necessary modifications.

O.C. 1049-2004, s. 6; S.Q. 2011, c. 14, s. 17.

DIVISION IV METHOD OF CALCULATION, DIVISION, PAYMENT AND DISTRIBUTION OF COMPENSATION

O.C. 1049-2004, Div. 6; S.Q. 2011, c. 14, s. 18; O.C. 1302-2013, s. 2.

§ 1 . — Calculation of costs eligible for compensation and of management indemnity

S.Q. 2011, c. 14, s. 18.

7. The calculation of the cost of the services provided by a municipality that is eligible for compensation must be based on the net cost of the services provided during the year preceding the year for which the compensation is owed. That cost corresponds to the expenses incurred by the municipality during that year to collect, transport, sort and condition the materials or classes of materials subject to compensation, from which is deducted, any income, rebate or other gain related to the materials and received by the municipality.

For calculating costs eligible for compensation owed for each of the years 2013 and 2014, an amount equivalent to 7.5% of the result obtained, after deducting the incomes, rebates or other gains referred to in the first paragraph, is also subtracted to take into account materials or classes of materials that, even if not referred to in section 2, are nonetheless recovered and treated during the collection, transportation, sorting and conditioning of the classes of materials designated in section 2.

Expenses incurred by a municipality for the purchase of containers, for information, awareness and educational activities or for the granting of service contracts and the follow-up on payments owed under such contracts are not included in the costs mentioned in the first paragraph.

O.C. 1049-2004, s. 7; S.Q. 2011, c. 14, s. 18; O.C. 1302-2013, s. 3.

8. For the purpose of calculating the cost of the services they provide that is eligible for compensation, the municipalities are divided into 6 groups:

(1)  municipalities serving fewer than 3,000 inhabitants, situated less than 100 km from the cities of Montréal or Québec;

(2)  municipalities serving 3,000 to 25,000 inhabitants, situated less than 100 km from the cities of Montréal or Québec;

(3)  municipalities serving more than 25,000 inhabitants, situated less than 100 km from the cities of Montréal or Québec, including those 2 cities;

(4)  municipalities serving fewer than 3,000 inhabitants, situated 100 km or more from the cities of Montréal or Québec;

(5)  municipalities serving 3,000 to 25,000 inhabitants, situated 100 km or more from the cities of Montréal or Québec; and

(6)  municipalities serving more than 25,000 inhabitants, situated 100 km or more from the cities of Montréal or Québec.

O.C. 1049-2004, s. 8; S.Q. 2011, c. 14, s. 18.

8.1. The Société québécoise de récupération et de recyclage determines, for each municipality, the cost of the services that is eligible for compensation by comparing the performance and efficiency of a municipality with the performance and efficiency of the other municipalities of the same group, using the factors established under sections 8.2 and 8.3.

S.Q. 2011, c. 14, s. 18.

8.2. The performance and efficiency factor for each municipality is determined by applying the following formula:

      (cost/tonnes)
PE =  ______________
       (kg/inhab.)

“PE” is the performance and efficiency factor of the municipality for the year concerned;

“cost” is the net cost declared by the municipality for the services it provided during the year;

“tonnes” is the quantity, in metric tonnes, of materials subject to compensation that was recovered or reclaimed during the year, as declared by the municipality;

“kg” is the quantity, in kilograms, of materials subject to compensation that was recovered or reclaimed during the year, as declared by the municipality; and

“inhab.” is the number of inhabitants in the municipality, as determined in the Order in Council made under section 29 of the Act respecting municipal territorial organization (chapter O-9).

S.Q. 2011, c. 14, s. 18.

8.3. The performance and efficiency factor for each group of municipalities constituted under section 8 is determined by carrying out the following operations in the following order:

(1)  once the performance and efficiency factor for each municipality in a group has been determined under section 8.2, the 2 subsets formed by the factors situated, respectively, in the lowest 12.5% and the highest 12.5% are excluded, and the arithmetic mean of the factors remaining between those 2 subsets is then calculated;

(2)  the standard deviation is calculated, that is, the mean difference between the remaining factors mentioned in paragraph 1 and the arithmetic mean established under that paragraph; and

(3)  the results obtained in paragraphs 1 and 2 are added together.

S.Q. 2011, c. 14, s. 18; .

8.4. If the performance and efficiency factor determined for a municipality is equal to or lower than that established for the group of municipalities to which it belongs, the cost of the services provided by the municipality that is eligible for compensation corresponds to the net cost declared by the municipality under section 8.6.

If the performance and efficiency factor determined for a municipality is higher than that of the group of municipalities to which it belongs, the cost of the services provided by the municipality that is eligible for compensation corresponds to the amount obtained by applying the following formula:

EC = [PEG × (kg/inhab.)] × tonnes

“EC” is the cost of the services provided by the municipality that is eligible for compensation;

“PEG” is the performance and efficiency factor determined for the group of municipalities to which the municipality belongs;

“kg” is the quantity, in kilograms, of materials subject to compensation that was recovered or reclaimed during the year, as declared by the municipality;

“inhab.” is the number of inhabitants in the municipality, as determined in the Order in Council made under section 29 of the Act respecting municipal territorial organization (chapter O-9); and

“tonnes” is the quantity, in metric tonnes, of materials subject to compensation that was recovered or reclaimed during the year, as declared by the municipality.

However, for the years 2010, 2011 and 2012, the cost of the services provided by a municipality that is eligible for compensation may in no case be lower than 70% of the net cost declared by the municipality under section 8.6.

For the purposes of sections 8.2 and 8.4 of this Regulation for the year 2013, the Société québécoise de récupération et de recyclage must deduct from the net cost of the services provided and declared by a municipality for that year, an amount equivalent to 7.5% of the net cost.

Likewise, the Société must subtract from the total quantity of materials subject to compensation declared by a municipality a quantity equivalent to 7.5% of that total quantity. (O.C. 1302-2013, s. 11)

S.Q. 2011, c. 14, s. 18.

8.5. To indemnify the municipalities both for the management costs related to the services they provide for the recovery and reclamation of materials or classes of materials subject to compensation, and for the purchase of the containers required to collect them, an amount equivalent to 8.55% of the eligible cost determined under section 8.4 must be added to that cost to determine the annual compensation owed to each municipality.

S.Q. 2011, c. 14, s. 18.

8.6. Every municipality is required to send to the Société québécoise de récupération et de recyclage, not later than 30 June each year, a declaration stating, for the year preceding the year for which the compensation is owed, the quantity of materials subject to compensation that was recovered and reclaimed in its territory and the net cost of the services it provided for the collection, transportation, sorting and conditioning of those materials determined pursuant to section 7.

For the compensation owed for each of the years 2013 and 2014, the quantity of materials subject to compensation is calculated by subtracting a quantity equivalent to 7.5% of the total quantity of materials recovered, during the preceding year, during the collection, transportation, sorting and conditioning of the materials subject to compensation.

The declaration must be signed by the municipality’s external auditor, who must state whether, in the external auditor’s opinion, the declaration fairly presents the information it contains.

S.Q. 2011, c. 14, s. 18; O.C. 1302-2013, s. 4.

8.7. In accordance with section 53.31.4 of the Environment Quality Act (chapter Q-2), the compensation owed to a municipality that fails to send a declaration complying with the prescriptions of section 8.6 to the Société québécoise de récupération et de recyclage within the time set in that section is reduced by 10% as a penalty, unless the Société deems that the failure results from special circumstances beyond the municipality’s control.

If a municipality fails to file the declaration by 1 September of a given year, the cost eligible for compensation is calculated by applying the formula provided in the second paragraph of section 8.4, with the following modifications:

(1)  the performance and efficiency factor “PEG” is replaced by the smallest performance and efficiency factor calculated for a municipality that belongs to that same group and used for the calculation under paragraph 1 of section 8.3;

(2)  the quantity of materials subject to compensation that was recovered or reclaimed during the year in the territory of the municipality in default is estimated by the Société on the basis of the most recent data it has on other municipalities in that same group; and

(3)  the amount obtained is reduced by 15%.

Despite the foregoing, no compensation is owed to a municipality that, on 30 June of the year that follows the year for which compensation is owed, did not send its declaration to the Société. For the year 2012, no compensation is owed to a municipality that did not send its declaration before 30 June 2014.

However, the provisions of the second and third paragraphs do not apply if the Société deems, in accordance with the third paragraph of section 53.31.4 of the Environment Quality Act, that special circumstances beyond the municipality’s control prevented the municipality from respecting the prescribed conditions when sending in its declaration. In such a case, the cost of the services provided by the municipality that is eligible for compensation for that year is calculated by the Société by applying the formula provided in the second paragraph of section 8.4. The quantity of materials subject to compensation is estimated by the Société in accordance with subparagraph 2 of the second paragraph of this section.

Even if compensation is paid to a municipality covered by the fourth paragraph, the municipality must file its declaration with the Société as soon as possible.

S.Q. 2011, c. 14, s. 18; O.C. 1302-2013, s. 5.

8.7.1. Any correction to a declaration sent by a municipality before 1 September of the year for which compensation is owed to the municipality must be received by the Société québécoise de récupération et de recyclage not later than 30 June of the following year.

The corrected declaration is subject to the conditions provided for in the third paragraph of section 8.6.

Adjustments resulting from a correction to a declaration are applied to the compensation owed to the municipality the following year.

O.C. 1302-2013, s. 6.

§ 2 . — - Limitation on the annual compensation owed to the municipalities

S.Q. 2011, c. 14, s. 18.

8.8. For each of the years listed below, the annual compensation payable for the services provided by the municipalities may not exceed the amount corresponding to the percentage given below of the compensation owed to them under this division:

(1)  for the year 2010: 70%;

(2)  for the year 2011: 80%; and

(3)  for the year 2012: 90%.

S.Q. 2011, c. 14, s. 18.

8.9. The amount of the annual compensation owed to the municipalities that is allotted to the newspapers class may not exceed,

(1)  for the year 2010: $2,660,000;

(2)  for the years 2011 and 2012: $3,040,000;

(3)  for the year 2013: $6,460,000;

(4)  for the year 2014: $6,840,000; and

(5)  for the year 2015: $7,600,000.

For each of the subsequent years, the amount of the annual compensation may not exceed the amount set in subparagraph 5 of the first paragraph, increased by 10% annually, until, for a given year, that amount is equal to or greater than the amount corresponding to the share of the compensation allotted to that class of materials under the first paragraph of section 53.31.5 of the Environment Quality Act (chapter Q-2), in which case this section ceases to apply.

S.Q. 2011, c. 14, s. 18.

§ 2.1 . — Division of the annual compensation owed to municipalities

O.C. 1302-2013, s. 7.

8.9.1. The annual compensation owed to the municipalities for the year 2013 and for subsequent years is divided among the materials or classes of materials subject to compensation according to the following shares:

(1)  69.1% for containers and packaging;

(2)  20.5% for printed matter;

(3)  10.4% for newspapers.

O.C. 1302-2013, s. 7.

§ 3 . — - Terms of payment and failure to pay

S.Q. 2011, c. 14, s. 18.

8.10. Not later than 31 October each year, a certified body must pay to the Société québécoise de récupération et de recyclage, an amount equivalent to at least 80% of the annual compensation owed to the municipalities for the year concerned. The balance of the compensation must be paid not later than 31 December of the same year.

However, if the schedule of contributions referred to in section 53.31.15 of the Environment Quality Act (chapter Q-2) is published in the Gazette officielle du Québec after 31 May, the dates on which the payments provided for in the first paragraph are deferred to the end of the fifth and seventh months, respectively, following the publication of the schedule.

Despite the first and second paragraphs, the amount of the compensation owed to the municipalities for the years listed below and allotted to the containers and packaging class and the printed matter class must be paid to the Société by the certified body in the following manner:

(1)  for the years 2010 and 2011: at least 70% of the amount due not later than 31 October 2012, and the balance, not later than 1 March 2013;

(2)  for the year 2012: at least 80% of the amount due not later than 1 March 2013, and the balance, not later than 31 October 2013;

(3)  for the year 2013: at least 80% of the amount due not later than 1 September 2014, and the balance, not later than 31 October 2014; and

(4)  for the year 2014: at least 40% of the amount due not later than 31 October 2014, and the balance, not later than 1 March 2015; however, if the schedule of contributions applicable for that year is published in the Gazette officielle du Québec after 31 May 2014, the date of 31 October 2014 is deferred to the end of the fifth month following the publication of the schedule.

S.Q. 2011, c. 14, s. 18; O.C. 1302-2013, s. 8.

8.11. Any sum not yet paid to the Société québécoise de récupération et de recyclage by a certified body as of the expiry dates set out in section 8.10 bears interest at the rate determined under the first paragraph of section 28 of the Tax Administration Act (chapter A-6.002).

S.Q. 2011, c. 14, s. 18.

8.11.1. Any sum paid by a certified body to the Société québécoise de récupération et de recyclage in excess of the amount of the compensation owed to municipalities for a year is credited to the payment of the compensation owed for the following year.

O.C. 1302-2013, s. 9.

8.12. The amount of the annual compensation owed to the municipalities that is allotted to the newspapers class may be paid, in whole or in part, through a contribution in goods or services.

However, if it is to be paid through a contribution in goods or services, the amount of the annual compensation may not exceed

(1)  for each of the years 2013 and 2014: $3,420,000; and

(2)  for each subsequent year: $3,800,000.

S.Q. 2011, c. 14, s. 18.

8.12.1. The annual compensation may be paid through a contribution in goods or services, to the extent provided in section 8.12, provided the certified body proposed a schedule of contributions to the Société québécoise de récupération et de recyclage, in accordance with sections 53.31.14 and 53.31.15 of the Environment Quality Act (chapter Q-2), determining the contributions payable and the manner in which payment may be made.

The proposed schedule must provide for the Québec-wide, regional and local dissemination of the environmental information, awareness and educational messages prescribed by the second paragraph of section 53.31.12.1 of that Act, and determine the sanctions and other penalties applicable in the event of non-compliance with that section.

S.Q. 2011, c. 14, s. 18.

8.12.2. The certified body must report to the Société québécoise de récupération et de recyclage on the implementation of the schedule determining a contribution in goods or services within 30 days following the end of each calendar year covered by the schedule.

However, the certified body must report to the Société on the implementation of the schedule for the years 2010, 2011 and 2012 not later than 31 January 2013.

S.Q. 2011, c. 14, s. 18.

§ 4 . — - Distribution of compensation to the municipalities

S.Q. 2011, c. 14, s. 18.

8.13. The Société québécoise de récupération et de recyclage must distribute the compensation owed to the municipalities not later than 30 days after it receives from the certified body, for a material or class of materials subject to compensation, the last payment on the total amount owed for the year concerned.

The Société must distribute to the municipalities any interest or penalties collected.

S.Q. 2011, c. 14, s. 18.

DIVISION IV.1 INDEMNITY PAYABLE TO SOCIÉTÉ QUÉBÉCOISE DE RÉCUPÉRATION ET DE RECYCLAGE

S.Q. 2011, c. 14, s. 18.

8.14. The amount payable annually to the Société québécoise de récupération et de recyclage to indemnify it for its management costs and other expenses mentioned in section 53.31.18 of the Environment Quality Act (chapter Q-2) is equal to the amount corresponding to the percentage given below of the annual compensation owed to the municipalities under Division IV:

(1)  for the year 2010: 3.25%;

(2)  for the year 2011: 2.75%;

(3)  for the year 2012: 2.25%; and

(4)  for each subsequent year: 2%.

Despite the first paragraph, the indemnity payable to the Société may in no case be greater than $3,000,000.

The amount of the indemnity is divided among the materials or classes of materials subject to compensation, according to the share allotted to each under section 8.9.1.

S.Q. 2011, c. 14, s. 18; O.C. 1302-2013, s. 10.

8.15. A certified body must pay to the Société québécoise de récupération et de recyclage the amount due under section 8.14 not later than 31 December each year. Any sum not yet paid to the Société as of the expiry date bears interest at the rate determined under section 8.11.

Despite the first paragraph, for each of the years given below, the amount must be paid to the Société by the following deadlines:

(1)  for the years 2010 and 2011: not later than 1 March 2013;

(2)  for the year 2012: not later than 31 October 2013;

(3)  for the year 2013: not later than 31 October 2014; and

(4)  for the year 2014: not later than 1 March 2015.

S.Q. 2011, c. 14, s. 18.

DIVISION V FINAL

9. (Omitted).

O.C. 1049-2004, s. 9.

REFERENCES

O.C. 1049-2004, 2004 G.O. 2, 3153

S.Q. 2011, c. 14, ss. 14 to 18

O.C. 1302-2013, 2013 G.O. 2, 3597A