‘The best solution overall for the municipality’: Council agrees to lease Kingston Area Recycling Centre site

Kingston City Council has approved a plan to lease the materials recovery facility (MRF) at the Kingston Area Recycling Centre (KARC) at 196 Lappan’s Lane, as part of the provincial government’s plan to shift the responsibility of blue box recycling from municipalities to producers. Under the Blue Box regulation, producers of recyclable materials will now be required to “operate and pay for the collection and reuse, refurbishment, and recycling of blue box materials,” a responsibility that was previously held by municipalities. 

As part of the new Individual Producers Responsibility (IPR) initiative, non-profit producer responsibility organizations (PROs) have been established to oversee the collection and recycling of materials, including glass, flexible or rigid plastic, metal, and paper. Circular Materials is a national PRO that plans to offer collection, transfer, and processing services across Ontario. The organization was established as part of a joint effort by some of the country’s biggest producers of recyclable materials, including Costco Wholesale, Kraft Heinz, Loblaws Companies Limited, McDonald’s, and Metro.

With the transition to the new blue box program set to occur over a three-year period beginning on July 1, 2023, Circular Materials has issued a request for proposals (RFP) to identify partners for its provincial recycling operations. At a meeting on Tuesday, Feb. 7, 2023, Kingston City Counciil voted in favour of a staff recommendation to approve conditional offers to companies seeking to lease the materials recovery facility at KARC as part of their bids to the organization. 

While the City of Kingston will not transition to the new program until July 1, 2025, prospective applicants must move quickly in their bids to Circular Materials because the PRO has set a deadline of March 31, 2023, for its request for proposals. Council’s approval of conditional offers to lease the MRF would mean that companies interested in applying to Circular Materials can include the KARC facility as part of their proposal. 

“This RFP represents a unique opportunity for the City to offer its MRF for lease to interested parties that will submit proposals to [Circular Materials] to continue operating the City’s MRF as a blue box receiving facility or MRF,” noted the staff report. 

“Staff anticipates this to be the best opportunity for the City of Kingston to secure a favourable lease of the MRF. To capitalize on this, the MRF would need to be made available for public lease to prospective proponents as soon as possible so they could include the site in their proposal to [Circular Materials].” Once a successful applicant is chosen, the City can then enter into a formal lease agreement with the company. 

The report also noted that KARC recently underwent a significant retrofit in 2019, which saw new conveyors and electrical systems installed at the facility. The City plans to sell this equipment “in place” to the successful applicant. When asked why the City wouldn’t opt to sell the machinery outright to the highest bidder, Brad Joyce, Commissioner of Transportation and Public Works, explained why such a move would be difficult. 

“The market is relatively narrow for the equipment. The cost to remove the equipment would be a significant factor in the revenue stream… The [best] option is to provide the facility as a functioning facility for lease and sell the equipment to that operator,” he said.

With the City of Kingston no longer directly involved in the recycling operations, the new model has the potential to result in a “significant” loss of revenue for the municipality. “We currently receive about $2 million in direct funding from the province to operate the facility. That would disappear completely, and… we would lose the revenue stream on the sale of the materials,” said Joyce, who explained that a long-term lease of the facility, as well as the sale of machinery “in place,” is the best way to mitigate the potential losses. “We believe this to be the best solution overall for the municipality.” 

In terms of how the transition to a new operator will impact current KARC employees, Joyce noted that most staff are contractors, and only four full-time City employees will be impacted. “We expect that two positions will become redundant, and our intention is to assimilate those positions into our Public Works portfolio, which we don’t expect to be very difficult to do.” 

It should be noted that leases will only cover the materials recovery facility, not the entire KARC site, which also includes the City’s Household Hazardous Waste Depot and the Leaf and Yard Waste site.