By on February 24, 2017

tires

Remember when recycling was new and sexy and every 1980s sitcom included it as a subplot in at least one cringe-inducing episode? It was around the time that McDonald’s took away that convenient styrofoam container — you know, the one that stored a Big Mac on one side and a delicious pile of fries on the other.

Times change. Recycling is mundane, but it’s bigger than ever — and there’s no doubt about the environmental benefits. Unfortunately, there can also be unforeseen financial benefits for less-than-honest operators, especially if a program’s creator doesn’t keep watch on who’s minding the till.

If that creator is the government, things can get messy. Consider this cautionary tale of a massive program that went rotten so badly that it had to be scrapped.

First, skip across the Detroit River, or the St. Lawrence.

In 2009, the Ontario government created a non-profit body dedicated to recycling tires. Called the Ontario Tire Stewardship (OTS), the agency was tasked with overseeing the collection and recycling of all discarded tires, funded by fees added to the cost of every new tire bought, be it in on a new car sold from a dealer or from a pile of el cheapo summer radials at Walmart.

Those fees have since come down, from nearly $6 per light-duty tire to $3.55 now (commercial trucks and bus operators pay $12.95 for their donuts). Still, that puts about $70 million a year in the hands of OTS to doll out to recycling partners. Well, not for long.

Announced today, the Ontario government is shutting down OTS in the wake of fraud allegations, scandalous money transfers, and executives who spent those fees on booze, lavish vacations and donations to the governing political party.

The Toronto Star, which printed a series of damning reports on the mismanagement and at OTS, reports that the troubled agency will be gone by next year.

Those reports showed the “accountability, the transparency, the protection of the public interest wasn’t sufficiently strong,” said Glen Murray, Ontario’s environment minister. “The system was very vulnerable to the kinds of things that the Toronto Star exposed. When I read it, it confirmed my concern that in fact the system had too many loopholes in it.”

A cheaper, industry-driven solution will likely replace the ill-fated venture. So, how sleazy did things get at OTS? First, the small stuff.

Tens of thousands of dollars recently went towards expensive hotels, wine, fine dining and cruises for executives and board members, plus those political donations. Nice to have, but defensible. It’s nothing you wouldn’t find at the top of other agencies. However, it’s just the tip of the iceberg.

After chief financial officer Perminder Kandola left the agency in late 2015, OTS filed a lawsuit alleging he transferred $346,565 from a tire collector to a personal bank account named “Ontario Tire.” The province later charged Kandola for failing to pay into the stewardship fund. Not long after that, OTS’ former director of audit, Frank Fragale, is alleged to have diverted a $200,149 tax rebate check to a private account.

Kandola’s story isn’t over. In January, the Financial Transactions and Reports Analysis Center of Canada (Fintrac), which tracks money laundering and terrorism, uncovered suspicious transactions from Kandola’s bank account.

In early 2016, his bank tipped off Fintrac after the then-unemployed Kandola bought $69,805.88 in gold bars. (He had quit his CFO position a few months earlier.) Over the course of the first four months of 2016, he had “received $868,931 from various accounts and withdrawn $764,697,” the Toronto Star reports.

The bank wanted to know where the money came from, telling Fintrac, “we’ve found it unusual for the client to hold personal accounts with roughly 7 different financial institutions and to be pooling funds from all sources in a short period of time to his CIBC personal deposit accounts, which have not been opened for long (December 2015 and January 2016.)”

A forensic audit is underway at OTS. Fintrac’s findings went further, however. The body discovered that a small auto recycling firm that does business with OTS received 74 direct deposits totaling $2.6 million that OTS has no record of.

Whatever program rises from the agency’s stenchy ashes had best convince tire buyers that the extra money they’re handing over to be “green” is actually benefiting the environment.

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65 Comments on “How a Government Tire Recycling Program Opened the Door to Sleaze...”


  • avatar
    Corey Lewis

    Wasn’t the styrofoam Big Mac container immediately replaced with a similar shape cardboard one?

    • 0 avatar
      John-95_Taurus_3.0_AX4N

      Yes. Although I rarely eat them anymore, I had one a week or so ago.

    • 0 avatar
      SCE to AUX

      Yes, but the cardboard one is ‘renewable’, although it is not recyclable with bits of a Big Mac clinging to it.

    • 0 avatar
      30-mile fetch

      Insufficient. Styrofoam enhances the flavor of mystery “beef”.

    • 0 avatar
      FreedMike

      Pour one out for the styrofoam.

      • 0 avatar
        PrincipalDan

        My problem with the Big Mac is that middle bun. WTF is the point of that?

        Gimme a Double Quarter Pounder – less frivolous trimming.

        • 0 avatar
          Corey Lewis

          “I call it the Moist Maker.”

        • 0 avatar
          stuki

          In theory, a middle bun soaks up juices from the “meat” and condiments, and provides enhanced friction between patties, making the whole thing less “animal style.”

          When cost cutting gets to the point of reducing even the gluten content of bun dough, to the point where it doesn’t even hold together in the presence of as much as a drop of ketchup anymore, that all goes out the door. Sacrificed on the altar of cheapness uber alles.

          • 0 avatar
            FreedMike

            LOL, like Mickey D’s was ever the Bentley of restaurants…

            (Though I will say this…about a year ago I went on a major weight loss mission, which has been damned successful. I REALLY, REALLY miss McDonalds fries. Lord, those were good.)

        • 0 avatar
          87 Morgan

          The perfect way to eat a big mac Sans the middle bun…
          open the container, remove the top poppyseed bun and throw away.
          There is NO sauce on the underside of the middle bun. So delicately take the middle bun along with the mystery meat on top + lettuce + onions + special sauce and flip over onto the bottom patty. Voila! Big Mac with out the middle absorber

    • 0 avatar
      golden2husky

      Foam containers were replaced by an effort spearheaded by Environmental Defense Fund. EDF’s general policy is to work with industry and try market based solutions before resorting to the usual obstructionist tactics that are employed by other groups. That collaboration showed that it made both economic and environmental sense to switch materials. Hence the new containers. Such an approach is why I give most of my charitable contributions to EDF. Perhaps our politicians of both parties should take note. Collaboration and compromise are not signs of weakness; they are the way forward. That message alone would go a long way to changing the way politics wag the US dog.

  • avatar
    Master Baiter

    “Recycling is mundane, but it’s bigger than ever — and there’s no doubt about the environmental benefits.”

    Another piece of conventional “wisdom” that’s probably false. I’ve read that most residential re-cycling programs lose money. In my neighborhood, three different trucks have to come by to collect trash, recyclables and yard waste. All those trucks have an environmental footprint, not to mention the noise pollution that wakes me every Tuesday at 6 a.m.

    Recycling is something that makes soccer moms feel good about themselves.
    .
    .

    • 0 avatar
      FreedMike

      There’s skepticism, and then there’s silly trolling skepticism.

      But given the handle, you know the difference.

    • 0 avatar
      Astigmatism

      “… not to mention the noise pollution that wakes me every Tuesday at 6 a.m.”

      It’s this focus on the real victims that keeps me coming back to TTAC.

    • 0 avatar
      JimZ

      aluminum recycling is very much worthwhile, because re-melting reclaimed scrap is much easier and cheaper than refining it from ore which is noxious and nasty.

    • 0 avatar
      rpn453

      I’m with you, Master Baiter. I don’t see how consuming resources to maintain and operate a bunch of large diesel trucks and facilities in order to pick up and process a bunch of worthless material is doing anybody any favors, except those who directly profit from it.

      If the recycling system in my area made any sense, they’d take scrap metal too. I often throw a hundred pounds of steel auto parts into the garbage because it’s not worth driving it to the industrial side of town. Apparently it doesn’t have the environmental value of a bunch of paper and plastic that nobody would be willing to pay anything for in a free market.

      I was helping my buddy’s mother get her house ready to sell before she moved out to the west coast a few years back, before we had curbside recycling. She asked me to take her car full of paper and plastics to the recycling depot, and throw those old furnace motors in the garbage bin on your way out to the car. That’s right; consume fuel transporting worthless material, and throw a few pounds of copper in the garbage because there’s no convenient way to recycle it. What a brilliant system.

      • 0 avatar
        jthorner

        In our area scrap metal does in fact go into the big blue recycling bin along with newspapers, soda bottles and so on.

        Check out the wide range of things we can recycle at our curbside here: http://www.greenwaste.com/sites/default/files/SouthCounty_RecycleGuide_final_2015-bleed.pdf

        Our total trash + recyling pick up fee is under $30/month.

        • 0 avatar
          dal20402

          Damn. Nice rates. On the plus side, I can recycle anything. On the minus side, I pay $75/month for trash, recycling, and yard waste service.

          • 0 avatar
            Scoutdude

            Ouch, “On the plus side, I can recycle anything” Don’t you me;an you have to recycle everything since they won’t pickup your can if it has more than 10% “recyclebles”. They’ll leave you a note stating that you have to remove those items and try again next week and of course pay for an extra if you can’t fit it all in your subscribed can.

            At least they seem to have backed off on fining owners of multi-family properties who’s tenants put recylables in the garbage.

            However they have just enacted a new law that says you have to look at and approve applications for rentals on a first in basis. It is now illegal to pick the best tenant, you must now post criteria in the building and in any ad or at the minimum provide a clearly labeled hyperlink to a page that lists the criteria, log the order in which applications are received and then offer it to the first on that meets the standards.

          • 0 avatar
            dal20402

            My trash is pretty much all in bags, and they’re not opening the bags But I have an incentive to make sure everything recyclable is in the recycling anyway, because the trash can at my rate is pretty small.

            That tenant law is just another symptom of our unwillingness to build any housing anywhere except a few isolated areas along major arterials. Apartments were getting so many applications that if you weren’t a tech worker or other high-paid professional you couldn’t ever secure an apartment. Now instead you have to be fast.

          • 0 avatar
            ect

            “However they have just enacted a new law that says you have to look at and approve applications for rentals on a first in basis”

            Really? I’m curious, where is this?

            In Toronto, there are often bidding wars for rental units.

          • 0 avatar
            dal20402

            The City of Seattle.

            The problem the law was responding to was a very real one, but I don’t think it was the right solution.

      • 0 avatar
        Scoutdude

        In our area we have the one big blue bin for a wide range of recyclables from that “worthless” paper, and plastics to pretty much any metal. Plus we get a credit for the value of the materials. It is supposedly based on the actual volume generated by our route and then equally divided equally between the subscribers on the route.

        We also have spring and fall recycling events for the things that can’t go in the bin, like an engine block, old lawn mower, concrete, bricks, pretty much any type of battery, tires, ect. It is usually done in a school or park and ride lot so you don’t have to travel too far.

      • 0 avatar
        HotPotato

        Uh, whut? Steel is recycled too; what do you think your dog food can is made of? And in my ‘hood, a private individual with a pickup comes around every week to collect everyone’s scrap metal that’s too big for a recycling bin.

        • 0 avatar
          rpn453

          I guess we must live in different cities with different recycling programs.

          Here, we had one city truck coming by per week to pick up garbage. Now we pay an extra $6 a month for a second private truck to pick up our recycling bins every week as well. It seems like they’d do it for free if the materials had enough value to cover the energy and equipment used in the process. I rarely put the bin out though, as it takes me a few months to fill it. I collect and take anything with a deposit in myself for the refund every year or so.

          I’ve never tried eating dog food, aside from a Milk Bone. I did that in order to confirm my theory to my buddy that it would taste better than dry, plain – unbuttered and unsalted – popcorn. It was a toss-up. I’m not sure why dogs are so interested in them.

    • 0 avatar
      OldManPants

      “something that makes soccer moms feel good about themselves”

      I’d like that job.

    • 0 avatar
      dal20402

      “probably false”

      “I’ve read”

      Glad to hear you have so much expertise on the subject.

    • 0 avatar
      golden2husky

      Recycling, like all things, comes with a cost – both environmental and economic. Some here think the economic side of the equation is all that counts, but that is ignorant to say the least. Getting rid of spent materials costs, but there are ways to lower tht overall cost. Recycling aluminum is a home run because aluminum is very electrical energy intensive and recycling it uses much less energy than starting from scratch. Other things, no so much. Tires would be one of those more difficult to recycle items. Still, for most items, recycling uses less energy that using raw materials and that includes all the extra trucking and sorting. The reality is that an enormous amount of municipal waste is trucked all over. So recycling does not usually add that much more in terms of transport. But we must be open that recycling is not “free” but from a cradle to grave point of view it makes sense for most things.

      • 0 avatar
        DC Bruce

        I thought old tires could be chopped up and used in paving mix.

      • 0 avatar
        HotPotato

        IIRC tires are separated into rubber and steel cord (steel recycled, rubber shredded & used for other purposes)…or, whole tires are burned as fuel for concrete plants.

      • 0 avatar
        rpn453

        “Recycling, like all things, comes with a cost – both environmental and economic. Some here think the economic side of the equation is all that counts, but that is ignorant to say the least.”

        The economics and the resource consumption are one and the same when it comes to industrial processes. What other environmental factors exist that are not covered by environmental laws?

        Maybe I am just ignorant in viewing recycling programs as nothing more than a pleasant distraction from our ridiculously wasteful lives. The system may have failed to properly educate me on the subject.

        • 0 avatar
          dal20402

          “Maybe I am just ignorant in viewing recycling programs as nothing more than a pleasant distraction from our ridiculously wasteful lives.”

          Very much depends on the material involved. Paper: pretty much a pointless distraction. Plastic: not particularly economically effective, but worth it to keep more of those materials out of the landfill. Most metals: VERY worth it.

      • 0 avatar
        ToddAtlasF1

        “Recycling, like all things, comes with a cost – both environmental and economic. Some here think the economic side of the equation is all that counts, but that is ignorant to say the least.”

        What muppets don’t understand is that the economics of materials sourcing are the measure of the environmental cost of materials sourcing. It may be cheaper to dump everything in a piece of land the government won’t let anyone do anything more productive with than it is to reclaim materials, but recycling makes economic sense when the energy and chemicals needed for transportation and processing are cheaper for a recycled material than for a new one. Our ‘best’ schools have produced people who have no idea what economics are or why they’re important, and it wasn’t an accident.

  • avatar
    Gardiner Westbound

    If you put the Ontario government in charge of the Sahara Desert, in five years there’d be a shortage of sand.

    • 0 avatar
      never_follow

      Yep, worst case Ontario just keeps getting more and more fantastic by the day. The truly sad part is that the electorate STILL gives wynnie the pooh and her merry band of idiots a majority.

  • avatar
    orick

    We also pay recycling fees on any electronics we buy. I wonder how that recycling program is doing.

  • avatar
    87 Morgan

    I have been under the impression that tire recycling was essentially grinding them up and mixing them with hot asphalt for paying of roads. Seems like a logical way to re-use them.

  • avatar
    Scoutdude

    Yet another political (corruption) article masquerading as something automotive. Yes tires were the medium of the corruption but corrupt officials weren’t corrupt because the automobile was involved they were corrupt because they were politicians that thought they could get away with helping themselves to public money.

    • 0 avatar
      heavy handle

      Well stated.

      On top of that, tires were recycled in Ontario before the program was implemented, and they will continue to be recycled after the program is disbanded.
      The link between tire recycling and the fee (aka tax) is based on convenience. They picked something that most people buy, that seems “dirty”, and that people do not realize is already recycled.

  • avatar
    pwrwrench

    Definitely sounds like a Tire Biter.

    Due to huge quantities of steel that is scrapped/recycled it is worth about 1-1.5 cents U. S. per pound.

  • avatar
    Lou_BC

    Reminds me of the old joke, “What do you do with 365 used condoms?”

    Make a tire out of them and call it a GOOD YEAR!

  • avatar
    Jeff S

    So that is why the salvage yard does not buy old washing machines anymore. It had been 2 years since I went to the salvage yard to take any scrap steel. I went last January to take my old broken washing machine and the scrap yard told me they no longer paid for them but told me I could drop it off which I did. I noticed that the price they paid me over the last few years had declined and now it is not worth anything. Even the price of scrap aluminum has gone down.

    In the county where I live the county has recycling bins that take paper, cardboard, glass, aluminum, steel, and plastic and use the proceeds from the sale of materials to put in the operating budget. The county has a processing centers and county prisoners sort through the recycled items. I have curb side recycling but a couple of times a week I take items to the county recycling binds when I go out. Even though I don’t get anything for it if the county benefits from it then I don’t mind as a taxpayer if they put the proceeds back into their operating budget.

    • 0 avatar
      jthorner

      Scrap material prices of all kinds have come down on the global market as demand growth in China slowed down. The global value of commodities is directly reflected in what your local yard will or will not pay you for your old stuff.

      https://www.fastmarkets.com/base-metals-news/base-metals/copper-forecast-analysis-q2-2016/

      • 0 avatar
        golden2husky

        Yep, recyclable materials are a commodity, no more or less. When values for certain materials go up, the pickup trucks come at night and raid our recycling bins on the street, taking the particular material that they want. Sounds innocuous but our town counts on those higher prices to pay for trash collection and recycling. When metals went way up in values, the portion of our town taxes that pay for pickup dropped by 30% for that year.

    • 0 avatar
      ect

      In Toronto, we have 3 bins – green (food waste and other compostables), blue (recyclables) and gray (garbage). Green is collecting weekly, blue and gray every 2 weeks. A single truck collects green bin waste and whichever of blue or gray is scheduled for that week, so at least it’s vehicle-efficient.

      According to the City, blue and green currently account for just over 1/2 of all collected waste, so that much is diverted from landfill. My wife and I notice that we don’t put a lot of stuff into the garbage – the gray bin is usually no more than 1/3 full by collection day.

  • avatar
    Jeff S

    Thanks, good link. I would like to see steel prices go up and stabilize to where people are encouraged to recycle and not dump old appliances and vehicles. When steel prices were higher there were less appliances dumped. I will still recycle anything that is recyclable. The county where I live has recycling days where they process steel, plastic, tires, computers, appliances, TVs, audio equipment, and other items and even allow for safe disposal of paint and batteries. Any proceeds go toward the schools and any government programs that don’t get as much funding from taxes. Local recyclers participate in these events.

  • avatar
    DC Bruce

    Recycling is just a market response to demand. Hell, I had someone “recycle” the copper downspouts from my house about 25 years ago . . . while the family was away shopping. And, as a kid, my Boy Scout troop used to go around collecting old newspapers, which we sold to a recycling place in Georgetown. People would stack them in 5-foot piles in their garages. This was long before “Earth Day” and all that.

    A lot of recycling today seems to be “single stream” where the sorting — papers, plastic, glass — occurs at the downstream end.

  • avatar

    My grandfather was a junkman. He supported a wife, five daughters and two nephews dealing in scrap paper and rags. While in college, I worked in a recycling yard owned by his best friend, I have friends in the industry, and I managed waste streams for a DuPont paint lab, which involved on-site recycling of wash solvents and arranging for the recycling of steel, HDPE containers, and aluminum. I’ve recycled literally tons and tons of all sorts of stuff.

    Some recycling makes economic and environmental sense. Aluminum, as has been pointed out, is a great example, particularly because it is so energy intensive to make in the first place and fairly easy to recycle and purify. Curbside sorting and recycling, however, has many critics and a number of folks in the field say it makes a lot more sense to collect it in bulk and have the sorting done at a waste facility.

    A lot of stuff folks do for environmental reasons isn’t fully thought out and is done more for emotional and social signalling reasons than really protecting the environment. Paper or plastic? It depends.

    In the summer I’ll put cardboard in the recycling bin on the curb. In the winter I burn it in the fireplace. Burns hot and fast, perfect for taking the chill off after bringing in the groceries.

    • 0 avatar
      dal20402

      Many cities (including mine) have moved over the years from having the customer sort the material to collecting it all in one big “recycling” bin and having centralized sorting.

  • avatar

    “donations to the governing political party.”

    And which party would that be? Actually it was two parties, both on the left.

    From the Toronto Star:

    “In January 2016, a story revealed credit card statements and invoices that showed tire executives spent consumer-paid eco-fees on expensive trips and dinners with copious drinks, along with donations to the Liberals and NDP.

    One invoice showed the stewardship paid $3,200 to send four executives to the Liberal’s 2015 Summer Golf Classic “with special guests Hon. Kathleen Wynne & Members of the Ontario Liberal Caucus.”

    Last year, stewardship chair Glenn Maidment said they were “absolutely” justified in paying to see Wynne on the golf course and share concerns about plans for the $49.5-million surplus. Maidment called the additional donations to the Liberals and NDP “modest contributions as a way of supporting the democratic process.””

    • 0 avatar
      ect

      With respect, the Ontario Liberal Party (of which I am NOT a supporter) is not “left”. If and to the extent that is has any ideology at all, it is centrist.

      In reality, it is a consensus or “big tent” party, which is traditionally what both major Canadian political parties have been. Just as the two major US political parties were, until a bizarre combination of evangelicals, white supremacists and right-wing extremists decided to take over the Republican Party.

      • 0 avatar
        OldManPants

        “a bizarre combination of evangelicals, white supremacists and right-wing extremists decided to take over the Republican Party”

        Well said.

        Their use of angry, low-worth Boomers as a political base strikes me as similar to the way notsees used the festering mass of German WWI veterans.

        Zorn über alles.

  • avatar
    Jeff S

    There is nothing wrong with burning cardboard in your fireplace if it does not have tonic coatings and you do it in a safe responsible manner, at least you are using it and not putting it in a land fill. I mow my leaves in the Fall and some composite their leaves. I have a lot of trees and it is easier to mow them in stages. Some could argue that I am burning fossil fuel to do that but I am also saving my back and at least the leaves get ground up and benefit the soil and the grass. I use a recycling mower which is easier and better than collecting grass clipping. I have curbside recycling but I also use the county recycling binds that go to a county facility and are sorted by county prisoners. I am not a greenie nor a tree hugger but within reason I don’t mind doing a few environmentally favorable things. Sometimes I reuse a plastic container but if I choose not to then I recycle them.

    Kirk Douglass’s father collected and sold rags to support his family.


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