Stifling Economic Recovery, Canada’s Plastic Ban Will Do More Harm Than Good
Just as Alberta released its plan to expand its petrochemical and plastics industries, Canada’s federal government took a dramatic sidestep by announcing its intention to ban some single-use plastics in 2021 and label manufactured plastic items as “toxic”.
While there have been regional and local initiatives in North America to pass similar bans, this is the first being done on a national scale and plastic products being added to the toxic substances list raises additional questions. As Tony Radoszewski, CEO of the Plastics Industry Association said:
“The action being taken by the leaders in Ottawa to ban and label plastics as ‘toxic’ is an irresponsible ploy to create a workaround Provincial authority relating to plastics legislation. By designating plastics as ‘toxic’, the Canadian government is recklessly making policy that could have significant negative impacts on human health.”
Under the proposed single-use plastic ban, the federal government claims that all manufactured plastic items are toxic. This declaration gives the government standing to further regulate these and ultimately, the ability to ban certain single-use plastic items. The toxic classification, however, is a confusing label for consumers and could jeopardize economic output, particularly in Alberta, since plastic is one of the many byproducts of petrochemicals. And for a country that, like much of the world, is still recovering from the impacts of COVID-19, there is concern that this move could create further job loss.
As Alberta Premier Jason Kenney said:
“[We are] very concerned about the implications of what just came from Ottawa. They find the notion of categorizing plastics as a toxin is unscientific.”
Alberta Premier Says Plastic Ban Could Hurt Its Economy
Long before COVID-19, Alberta was devising its long-term plan to diversify its primarily energy-driven economy. And now, as the province looks to solidify its strategy by introducing hydrogen energy into the mix and becoming a hub for plastic recycling, the new federal ban is placing a wrench in the province’s recovery plans.
The toxic classification adds uncertainty to this plan and even more challenges on top of the federal government’s proposed Clean Fuel Standard. Under the proposed CFS, costs to develop energy sources like natural gas would dramatically increase—leaving manufacturers with even tighter margins to make products from natural gas, such as plastic.
Alberta’s vision and strategy for natural gas also included becoming a showcase for North America on plastics recycling by 2030. The proposed plastic ban, in addition to the CFS, could bring about serious complications for implementing the province’s diversified energy strategy. As Premier Kenney explains:
“We also want for Alberta to become western North America’s hub for the circular plastics economy through recycling. … The implications of [Ottawa’s] announcement may be very problematic for that vision.”
Banning Is Counterintuitive to Stimulating the Economy
As Canada looks towards recovering from one of the country’s largest economic downturns, it goes without saying that placing blanket-bans on several products could have large implications for employment in the future. In 2019, nearly 100,000 Canadians were employed in the plastics industry, generating nearly CAD$35 billion in taxable sales for the federal government. With the current proposed ban, these jobs along with several others within the plastics supply chain, are suddenly in jeopardy.
In the United States, California was one of the first states to roll out a ban on single-use plastic bags in grocery stores. In the end, stores that implemented the ban saw an average decrease in sales of 6 percent, while stores that kept supplying plastic bags had an average increase in sales of 9 percent, according to the non-partisan National Center for Policy Analysis (NCPA).
Over time, the average decrease in sales has a substantial negative impact on the bottom line of grocers, which could lead to several cost-cutting strategies like cutting employees. Pamela Villarreal, a senior fellow with the NCPA, says just bans on plastic bags alone can have devastating effects on commerce:
“These findings suggest that bag bans may displace commerce and have real economic effects. Shoppers want to have a choice and will vote with their feet.”
A year later in Texas, another major metropolitan city announced a similar ban on plastic bags. In the end, the switch ended up costing taxpayers close to USD$2 million on educational campaigns, let alone the anticipated decrease in annual sales. Bob Gedert, the director of the City of Austin, Texas’ trash and recycling department, commented on the unintended job losses caused by the ban:
“[Grocers in California were] forced to terminate some of its staff, [but] not a single store outside the ban area dismissed any staff.”
While these bans are two examples in metropolitan areas in the United States, they have relevance for Canada and give insight into the devastating effects such a ban could have on Canada’s plastics industry and its consumers.
Demand for Single-Use Plastics Rising Among Canadians, Restaurants Due to COVID-19
Essential workers, like those on the frontlines of food service, including everyday Canadians are increasingly relying on single-use plastics as a result of COVID-19.
Earlier this year, Agri-Food Analytics Lab at Dalhousie University in Nova Scotia released a report looking at two national surveys gauging Canadians’ perspectives toward single-use plastics. According to the report, 29 percent of respondents felt they were purchasing more plastic goods. Among those using more plastics, young adults were the largest demographic — those in the 18-to-25-year-olds category reported the largest increase.
Lead author Robert Kitz stated that before the COVID-19 pandemic, there was a consensus among the public on single-use plastics. Now, due to personal safety concerns, Kitz said this consensus no longer exists:
“The COVID-19 pandemic has clearly altered the landscape of consumer opinion on plastic packaging. While tighter regulations, and even bans had once looked like near-consensus policy options, that support is now eroded.”
Food safety concerns were also gauged in the report. They found that most concerns due to food safety were the most important among females who were older and had less children. Dr. Sylvain Charlebois, Director of the Lab, states plastic packaging has significantly reduced Canadian consumers’ fears of contracting COVID-19:
“The industry appears to have responded well to food safety concerns during the pandemic, but it likely helps the plastic situation at all.”
And it’s not just a safety issue. As restaurants across the world have struggled to keep open amid lockdowns, single-use plastics have enabled many to increase take-out options, enabling them to serve the public even when dining rooms were closed.
While it goes without saying this ban is utterly ill-timed, it’s also putting entire Canadian industries in jeopardy. Calling a safe material like plastic “toxic” only creates confusion for consumers and harms an industry that directly or indirectly employs hundreds of thousands of Canadians. As provinces like Alberta focus on diversifying their economy after already facing numerous challenges from COVID-19, these regulations clearly don’t factor in the harm these bans will have on numerous Canadian families whose livelihood is at stake.