SSTC’s IMPACT Established in 1996, the Saskatchewan Scrap Tire Corporation (SSTC) is a provincially incorporated, non-profit organization that delivers a province-wide tire recycling program. Accountable to both the provincial government and the public, SSTC manages the collection and processing of scrap tires for recycling and reuse and since its inception, has diverted over 21 million tires from the Saskatchewan waste stream.
21 million tires laid side-by-side would cross Saskatchewan 31 times, and weigh more than 4 Titanic ships!
Consumers make all this possible by paying a Tire Recycling Fee (TRF) when they purchase new tires. The fee paid by consumers on the purchase of a new tire is remitted to SSTC and the funds are then used to cover the cost of collecting and processing the scrap tire material into new marketable products. Prior to SSTC and its program, most of the province’s scrap tires ended up in local landfills as domestic waste and either stockpiled, buried or burned, or even dumped indiscriminately along roadsides and other areas throughout the province.
OUR ACCOMPLISHMENTS Over the past 15 years, SSTC, through its programs, has delivered significant and measureable results including: •• Diverting more than 21 million scrap tires (42 million pounds) from disposal in Saskatchewan landfills. •• Registered 1,350 program participants (tire retailers) and re-invests over $7 million annually from fees collected and remitted by these participants towards the management of scrap tires across Saskatchewan. •• Provided over $6.5 million each year in incentives to collectors and processors who facilitate the recycling of tire waste, supporting over 130 jobs in the tire recycling industry. •• Invested over $2 million in education, awareness, and public consultation in efforts to promote proper management of scrap tires. •• Administered and funded over $5.5 million in the removal and diversion of tire stockpiles from more than 300 landfills across Saskatchewan. •• Funded and administered the removal of tire stockpiles from private property and farm land in 113 Saskatchewan municipalities at a cost of $1.5 million. •• SSTC programs are nearing a 70% recovery rate on passenger tire equivalents sold within Saskatchewan. •• In partnership with nine participating retailers, SSTC has also supported efforts to collect and recycle 7,148 bicycle tires and tubes (approximately 630 passenger tire equivalents).
Each year, more than one million waste tires are generated in Saskatchewan. SSTC’s recycling program is keeping scrap tires out of landfills and maintaining a clean and healthy environment for generations to come.
The Regulations Saskatchewan’s Scrap Tire Management Regulations (1998) contain two requirements that make SSTC unique amongst its peers and that has material implications for both the operations and the financial requirements of Saskatchewan’s product management plan for scrap tires.
1. Collection and recycling of stockpiled tires must, by regulation, be included in approved scrap tire management programs. Saskatchewan is the only western province to include this requirement in regulation.
2. All types of scrap tires must be accepted for collection, recycling, and management, including tires used on farming and
agricultural machinery and larger off-the-road tires such as those used on mining vehicles. Only Manitoba has the same broad mandate at this time.
The Current Situation In the early years of the program, much emphasis was placed on developing appropriate systems and growing the infrastructure for successful scrap tire management in Saskatchewan. These early efforts were highly successful and helped grow the robust scrap tire collection and management program that exists today. The challenges of managing the growth of scrap tire recycling in Saskatchewan have increased considerably over the past 15 years, mostly because the Tire Recycling Fee (TRF), which funds SSTC, has not kept pace with the handling costs of waste tires. The net result, not surprisingly is that SSTC’s ability to keep pace with the cost of scrap tire management has diminished year over year. Financial projections show that, if current trends were to continue, SSTC will reach its full capacity, exhaust all of its reserve funds, and would be forced to both scale back activities and reduce operating expenses (tire collection costs, processing costs, special projects, etc.) by the end of 2014.
The Plan SSTC is evolving, status quo no longer works for the program and its success hinges on the ability for SSTC to ensure that the program is adequately funded. SSTC’s Board of Directors believes that the 2014-2018 SSTC Product Management Plan outlines measures to solidify the program and create a foundation for continued success.
1. Implementation of a Tire Recycling Fee (TRF) rate-setting methodology that takes into account the true cost of managing each category of tires that SSTC is mandated by regulation to manage.
2. Continuation of private scrap tire stockpile cleanup (Phase 3) in order to complete requirement 6(1)(b) of the regulations. 3. Recapitalization of SSTC’s stabilization reserve fund which will be nearly exhausted by the end of 2013 as the corporation has been forced to use reserve funds to offset the deficit between TRF revenues and program costs.
4. Shift to an industry board with appropriate stakeholder advisory and strengthened dispute resolution mechanism. 5. Continue to enhance measures to raise education, awareness, and transparency. 6. Investments in scrap tire collection and recycling program efficiency, innovation, and market development. The six components are necessary and appropriate for ensuring the viability and capacity of SSTC to deliver quality products, services, and growth opportunities to its stewards and stakeholders.
The Solution The key piece in the 2014-2018 Plan is the development and implementation of the TRF Rate-Setting Methodology. This methodology gives credibility to rate-setting and ensures that the TRF accurately reflects the cost of managing scrap tires in accordance with the requirements set out in the Regulations. Approval of the methodology will allow SSTC to: 1. Ensure that the program funding is stabilized and that the TRF accurately reflects the handling costs of the tires included within the program. 2. Meet the expectations outlined in the Scrap Tire Management Regulations 1998. SSTC plans to continue with Phase 3 clean-up of private stockpiles within the province. The cost of this activity is only possible with adequate program funding. 3. Recapitalize the programs reserve fund. SSTC has operated its program on a lean staff component with a prudent financial governance plan. The delay in gaining approval of its program changes has taxed its program reserves. To mitigate program risk, SSTC plans to recapitalize reserves. Applying the new TRF Rate Setting Methodology to the six components of the Plan as presented will result in new TRFs for Saskatchewan as outlined in the table.
Tire Type
TRFs Calculated (using cost-based rate setting methodology)
New TRF as a % of New TIre Price (Medium Cost)
Passenger car/ light truck
$4.00
2.7%
Medium Truck
$19.00
3.8%
Agriculture tires
$34.00
3.1%
Off the Road/Mining (medium types)
$78.00
2.9%
Off the Road/Mining (large types)
$205.00
1.6%
SSTC worked with independent cost/rate-setting experts to develop a TRF rate-setting methodology that is consistent with other stewardship models, minimizes crosssubsidization across tire categories, and supports the long-term sustainability of SSTC’s program.
The Need for Change SSTC is committed to a process that moves the program towards a sustainable future, one that benefits its stakeholders, the environment, and the public in general. Changes are absolutely necessary at this time in order to maintain the viability of SSTC and Saskatchewan’s highly successful scrap tire management program through the 2014-2018 period and sustainability into future years.
The Saskatchewan Ministry of Environment has consistently concluded that the scrap tire management program as managed by SSTC “has been effective in achieving positive environmental and social benefits to Saskatchewan and remains both necessary and relevant for the foreseeable future.
2013 PUBLIC POLLING
97%
80%
86%
Program Support 97% feel it is important to have a provincial tire recycling program.
Recycling Fee 80% support paying a TRF on the purchase of new tires to help cover the cost of recycling over one million scrap tires per year.
Fee Equality 86% believe the TRF should reflect the type of tires being recycled {i.e. lower fee on passenger car tires, higher fee on heavy equipment tires}.
Survey Objectives This research highlights the findings from a quantitative study with Saskatchewan residents about SSTC. The main objectives of the study were to determine public support of SSTC and the fees the program regulates. Methodology Data was collected in the month of June from a statistically proportional representation of Saskatchewan residents (urban 42% and rural 58%) ranging in demographic.
420-2220 12th Avenue Regina, Sask S4P 0M8 Ph: 306.721.8473 (721-TIRE) E: info@scraptire.sk.ca www.scraptire.sk.ca