On July 7th, the Competition Bureau posted a response to proposed amendments by the Ministry of Environment, Conservation and Parks. The bureau’s comments, while notably one-sided, reinforce the value of competition in sustaining healthy markets. Surprisingly, the post also highlights a concern many stakeholders have raised for some time: Ontario’s recycling framework needs clearer rules for where competition is appropriate and where coordination is required.
The broader debate has become focused on whether a recycling system should be competitive or “monopolistic,” rather than on the conditions required for competition to function effectively. That framing risks misusing the word monopoly. For example, in all other Canadian provinces, one not-for-profit organization is assigned responsibility for managing tire recycling and delivering system-wide accountability; however, that does not mean competition is absent. Competition occurs at the service-provider level, including collection, hauling, processing, and end-market development. Across Canada, this model has helped achieve some of the highest tire recycling rates in the world, precisely because it combines clear accountability with competitive service delivery. The point is not that competition should be excluded, but that it be placed where it can improve performance without undermining coordination, provincial coverage, or environmental outcomes.
Looking at Ontario as something of an outlier to this, the issue is not whether competition should exist, but whether Ontario’s regulatory framework clearly defines the responsibilities, coordination requirements, and service-continuity obligations needed for competition to deliver reliable environmental outcomes.
The challenges experienced in the scrap tire sector over recent years are not examples of competition working; rather, they highlight the consequences of introducing competition without sufficient guardrails.
Examples include:
- Over-collection for the purposes of generating ‘credits’ without a contractual relationship or corresponding producer obligation.
- Service providers exiting the system without transition requirements, duty to inform, coordination obligations, or continuity plans, leaving collection sites without service and scrap tires accumulating.
- PROs removing sites from collection networks and subsequently arguing that regulatory incentives did not support their retention, with no requirement to coordinate those decisions or communicate potential impacts such as the emergence of backlogs.
- Reliance on incentivized retreading (117%) tonnage to meet recycling targets, while physical tire collection continues to create systemic imbalance.
- Unregistered (free riders) producer tires being sold without a requirement to report these to the Regulator beyond good faith efforts; yet the cost to collect and recycle these tires fall on registered producers and consumers.
These issues are not competitive market successes. They are symptoms of gaps within the Regulation.
In sectors such as utilities and waste management, competition exists within a framework that also requires collaboration where it is necessary to protect communities, service continuity and system performance. The same principle should apply here. Collection infrastructure, environmental outcomes, and public access to service cannot be left entirely to competitive players without requirements that ensure the system functions as intended. The impacts of regulatory gaps are often left up to interpretation.
Too often, competition and collaboration are treated as though they are opposing concepts; when in reality they are different, but more like two sides of a coin. Competition should drive innovation, efficiency, customer service, and cost effectiveness. Collaboration should ensure that collection networks remain functional, cost effective, environmental objectives are achieved, and service disruptions do not occur regardless of competitive dynamics or anomalies in tire volumes.
This is the one area that eTracks aligns with the Bureau’s response: competition is not a substitute for good regulatory design. Without clear rules governing responsibilities, coordination, and continuity of service, the system will continue to experience many of the same failures it has faced over the last several years – regardless of competition.