In defence of in-kind ads for recycling

The Fort Frances Times, Rainy River Record, and community newspapers across Ontario always have been a supporter of municipal recycling programs, and have a long history of putting our money where our mouth is by offering free or discounted advertising in support of these programs long before the current Waste Diversion Act came into force.
Under the act, the Ontario Community Newspapers Association (OCNA), of which the Times is a member, and our daily counterparts in the Canadian Newspaper Association (CNA) negotiated an arrangement that would allow members to pay for the first $1.3 million in steward’s fees through the use of in-kind advertising, continuing on with our support of recycling within the pages of our publications.
Due to the growing costs involved in the municipal recycling system, the $1.3 million in in-kind advertising contributed by the newspaper industry already has been exceeded, leaving our members to pick up the slack in terms of cash contributions to help cover 50 percent of the shortfall between what it costs to recycle newsprint and what the municipalities receive for the raw material.
The current ceiling for in-kind advertising needs to be updated in view of these cost increases.
Ontario Environment minister Leona Dombrowsky weighed in and instructed the OCNA, CNA, Waste Diversion Ontario (WDO), and the Association of Municipalities of Ontario (AMO) to “reach an agreement on the nature of the in-kind contribution in lieu of fees.”
The minister upheld the principle of in-kind advertising contributions, and indicated she felt it should be expanded to cover the additional steward’s fees required to make up for the extra shortfall in recycling revenue.
Recently, several Ontario municipalities have brought forward or passed resolutions asking for an end to in-kind advertising and its replacement with cash contributions from the OCNA and CNA, which goes against both the original agreement between the newspaper associations and the government and the recent statements by the environment minister.
These resolutions are based, in large part, on misunderstandings about the current system and an inaccurate assessment of the value of in-kind advertising.
First, in-kind advertising isn’t free. Like any other product or service, it has a monetary value. It costs newspapers money to run in-kind ads, not just in the income that they could have generated by selling that space to someone else, but also in the cost of paper and ink and on the time it takes for our staff to insert it in the paper.
Without in-kind contributions from newspapers, municipalities would have to pay out-of-pocket for any advertising they did relative to their Blue Box program. By paying for ads directly, it would cause the cost of recycling to increase, which could lead to a larger gap between program costs and returns.
This would require an additional investment by municipalities as well as by all stewards.
While in-kind advertising is contributed exclusively by the newspaper industry, it benefits all stewards and the municipalities by helping to keep costs down.
By agreeing to exchange advertising for steward’s fees, newspapers are making a real cash investment into the Blue Box system while providing municipalities an excellent vehicle to raise awareness about local recycling programs.
Secondly, many municipalities have said they don’t use newspapers for the majority of their Blue Box awareness campaigns. Yet research has shown that community newspapers are read by 77 percent of Ontario adults, making them an excellent method of getting your message out and seen.
Given community newspapers’ ability to reach Ontario adults, it would seem like a natural way of promoting recycling.
While no single factor can be held up as the reason for the increase in waste diverted from the landfill into the Blue Box system, the in-kind advertisements promoting recycling placed in community newspapers likely can claim a part of the credit for this achievement.
Thirdly, the newspaper industry does, and will continue to, contribute cash into the recycling system. While the minister has proposed increasing the amount of advertising that OCNA and CNA members contribute to match their total steward’s fees, she has made it clear that administration costs for WDO and Stewardship Ontario, program start-up and delivery costs, along with our share of any program shortfall costs will continued to be paid in cash.
These payments are on top of the steward’s fees that are covered by in-kind advertising.
Fourthly, under the current system, all OCNA member newspapers contribute in-kind advertising to the program offering province-wide promotion of the Blue Box program.
Despite built-in exemptions for small businesses which have less than $2 million in revenue, like us, small community newspapers still pitch in and contribute in-kind advertising to the cause. It’s the right thing to do.
While we gladly contribute to the recycling shortfall, it should be understood that we have no say in how the local systems are operated or the price that they receive for newsprint.
Our only involvement is our contribution of in-kind advertising after the municipalities calculate their shortfall on newsprint recycling.
Municipalities control the majority of costs by deciding how often Blue Box materials are collected, how they are sorted, and what administrative costs are included in the recycling program.
By being able to recover 50 percent of the difference between recycling revenue and expenses on newsprint, it can allow any existing inefficiencies within the system to continue as half of the shortfall is subsidized by industry.
Also, recyclers know municipalities will receive payments from the newspapers so they can offer a lower price for the raw newsprint, and municipalities know they will be recovering half of whatever they might lose, so their incentive to try and squeeze the best deal from the recyclers is not as high as it would be if they had to cover the entire shortfall.
At around 76 percent, newsprint has, by far, the highest percentage of new material entering the recycling stream rather than the landfill system of any recyclable product in Ontario.
We applaud this success and hope the number will continue to inch closer to 100 percent recovery.
However, that increase in recovery itself could further drive down the cost of newsprint for recycling if municipalities don’t maintain proper standards and have proper separation protocols in place to ensure lower quality paper is not being mixed in with the newsprint.
By mixing in lower-quality paper, the final product is worth less and devalues the higher-quality newsprint entering the recycling system. By not properly separating paper, municipalities are decreasing their ability to recover their recycling costs and thereby raising the need for higher contributions from the newspaper industry.
To address the concerns that AMO had with in-kind advertising, the OCNA and CNA put forward a proposal that would have increased the value of in-kind advertising above the pay-in model, added province-wide production of other waste diversion ads to be covered under the in-kind program, and the agreement would be retroactive to Jan. 1—even though the offer was made at the end of February.
Initially, AMO negotiators accepted the offer, only to turn around and reject it the next day.
As responsible community members, we feel it is important to contribute to the health and well-being of the communities we serve. We do this through the sponsorship of local events, through free community notices, and just by letting people know what’s going on around them.
As a user of one of the recyclable commodities under the Waste Diversion Act, we agree municipalities shouldn’t bear the total brunt of losses incurred while administering a provincially-mandated program.
However, we do believe that, as newspapers, we can contribute something to the Blue Box program that no other stakeholder can.
Our province-wide readership gives municipalities an opportunity to communicate directly with their citizens in a proven and efficient manner that allows them to maximize the information they can disseminate. The newspaper industry has offered to contribute more advertising.
The current in-kind system benefits all those involved through keeping costs down and getting the word out about recycling in a proven and effective method. In those ways, in-kind advertising is better for all concerned than a total cash contribution.
We, and other newspapers across the province, are committed stewards and have a vested interest in ensuring the program is a success. The best way to do that is through increasing awareness of the program and to run it in a way that maximizes the return to the municipalities and minimizes the shortfall that the partners are required to cover.
Maintaining and expanding the provision of in-kind advertising will help to ensure the continued success of the Blue Box program in a cost-effective way that benefits all parties involved.
Thank you.

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