Why do taxpayers continue to subsidize the free market?

By Jay Arthur

You could understand if some of the guys in blue suits are getting a bit hot under the board room collar nowadays.
The latest missive from the AMO think tank is calling for industry to pay all the costs of managing packaging waste and printed papers, whether it ends up on the street, in the garbage or in the blue box.
It's only been a few years since the municipalities finally agreed to accept the "shared responsibility" mantra and settled for half of the cost of just the blue box. Industry thought that discussion was over.
Not that it ended up being close to half the cost.
By the time industry's lobbyists had browbeaten the municipalities into accepting an "agreed cost" based on someone's estimate of what it should cost to collect and process recyclables (subsequently further "refined" by linking payments to "best practices"), and by the time the newspapers had weaseled out of paying anything at all in exchange for a bunch of ineffective print ads (euphemistically known as an in-kind contribution), and by the time 10% and then 20% of what they should have received got sliced off to pay for research such as establishing what "best practices" are, the old 50/50 split concept was looking a bit ragged.
Anyway, I digress.
So now that industry is paying, let's say, a pretty hefty share of blue box costs, it must be a little galling to see AMO's Alternative Approach to Ontario's Blue Box Funding Model discussion paper bring the whole "who pays" question back to where it began.
Seasoned waste policy wonks will recall that it was the municipal position calling for full producer responsibility or nothing that killed what became lovingly known as the "CIPSI" stewardship model proposed by industry in the early 1990s.
It essentially offered 50 cents on the dollar, and was turned down. It wasn't until the early 2000s that the issue was finally resolved enough for legislation to be drawn up.
Battered and bruised by years of mistreatment, downloading and underfunding by Mike Harris, the municipalities took what they could get. Champagne corks

were popped in the Coke, Pepsi and associated company boardrooms and everyone went back to the golf course.
Well, it turned out that the municipal dragon was not entirely slain. With the replacement of Mr. Harris's Regressive Conservatives with a Queen's Park regime that at least pays lip service to listening to local government concerns, there seems to have been a stiffening of the municipal spine. And not before time.
The municipalities do have a good case. Why should local taxpayers--and that includes industries--pay for the management of someone's discards? The whole point of having local services paid for by all of us is that there are some things we all have a stake in and it is in all of our interests to see that they are paid for, through taxes.
While there may be some argument about how many of these services should be a collective responsibility, there is little debate--not in this country, anyway--that certain core services should be covered.
Those who feel there should be less government tend to advocate fewer services and reassure us that the market will take care of the rest.
Ironically, garbage collection only  became one these services because there were public health risks if such  services were not universally available. Of course in those days it was mostly ashes, bones and dead horses. The vast majority of consumer goods and printed papers on our streets, in the garbage and in blue boxes today did not exist And we are seeing the user-pay concept gaining ground to offset the cost of those who abuse the service.
When the blue box came along it was supposed be financed by the revenues. But it never happened. Municipalities have been effectively subsidizing industries like the soft drink makers ever since. Ever quick off the mark, once Ontario was sold on the idea of recycling, they promptly dropped their local pop bottling operations and dumped their post-consumer costs onto taxpayers.
To this day it remains a breath-taking coup.
And whether the cost of managing this stuff is paid for by the producer or the customer, it is not a municipality's job to subsidize free enterprise.
The market wouldn't like it and neither do taxpayers.