Bags, Utensils and Straws, Oh My!

Peter Viitre and Don Houston

Overview of Canada’s Single-use Plastic Prohibition Regulations:

Effective December 20, 2022, the Government of Canada has banned the manufacture and import for sale of single-use plastics (“SUP”), including plastic grocery bags, cutlery, stir sticks, and straws through the Single-use Plastics Prohibition Regulations (“Regulations”)[1]. In addition to the items mentioned above, foodservice wares made from hard-to-recycle plastics are also banned effective December 22, 2022, while a ban on the manufacture and import of plastic ring carriers (think six-packs of your favourite beverages) will come into effect in June, 2023.[2]

The Regulations come in advance of Canada welcoming the world to the 15^th Conference of the Parties (COP15) to the United Nations Convention on Biological Diversity, and are a step in the Canadian Government reaffirming its steadfast commitment to addressing plastic pollution and protecting biodiversity in Canada, and around the world. According to the Government, “Over the next decade, this world-leading ban on harmful single-use plastics will result in the estimated elimination of over 1.3 million tonnes of hard-to-recycle plastic waste and more than 22,000 tonnes of plastic pollution, which is equivalent to over one million full garbage bags.”[3] These measures will put Canada among the world’s leaders in the fight against plastic pollution and will help them to meet their commitments to the Ocean Plastics Charter.

Franchised and non-franchised businesses in the retail, grocery and restaurant industry sectors will be required to adjust their customer offerings to adhere to the ban, including by switching to more natural, biodegradable and/or reusable alternatives, such as paper or reusable shopping bags, wooden utensils, paper straws, and fully-recyclable or biodegradable food packaging materials.

Exceptions to the Ban:

Exceptions to the Regulations allow flexible SUP to remain available for people in Canada who require it for medical or accessibility reasons.[4] This includes for use at home, in social settings, or in healthcare settings, such as hospitals and long-term care facilities. SUP items that are not flexible will be prohibited in all circumstances.

More specifically:[5]

• The manufacture and import of SUP flexible straws is allowed;
• Retailers can sell SUP flexible straws in packages of 20 or more, as long as they are not on public display and are only provided if requested;
• Individuals can give SUP flexible straws to others in a family or social setting;
• Care institutions can provide SUP flexible straws to their patients or residents; and
• A business may sell SUP flexible straws in packages of 20 or more to another business.

Additional exceptions are available for waste and bags for containing waste, as well as “products in transit.” Whether a SUP product is considered “in transit” is determined based on the final shipping destination of the product.

Ban will be effective in December 2023

Bans on both the sale and the  manufacture, import, and sale for export of SUP will not begin until December 20^th , 2023. This gives manufacturers and retailers alike time to adjust their offerings and processes. However the government is not currently planning to offer subsidies or other financial assistance to offset the costs of changing from SUP like plastic cutlery to wooden cutlery or even new materials starting to enter the market, like edible cutlery made of cereals.

Stores may also still sell their existing SUP until December of 2023, but that does not mean stores should not start planning for the future now.[6] For example, in 2021, McDonalds eliminated plastic stir sticks, straws and cutlery in more than 1,400 restaurants across Canada, replacing them with wooden alternatives, which saved an estimated 840 tonnes of plastic from landfills annually. Additionally, Sobeys eliminated SUP bags at its checkout counters in 2020, and Walmart followed suit in April, 2022. Finally, Loblaws recently announced it will ban plastic bags by spring 2023.[7]

Store owners need to begin the transition away from SUP by, firstly, assessing how much SUP they currently have stocked, and then evaluating the best way to proceed; whether that be by continuing to normally sell the products until the end of 2023, exporting the products to a jurisdiction where they are not banned, or deciding they can fit into one of the government exceptions. In conjunction with this exercise, plans to gain access to new, approved products will also need to be implemented. Oliver Bourbeau, the vice-president of federal affairs at Restaurants Canada, said there are already supply chain issues at play, mentioning that one restaurant chain with dozens of restaurants in Ontario and Quebec is so far only receiving half of its orders for non-plastic takeout containers.[8]

Due to such supply chain issues, and the substantial expected operational changes that compliance with the Regulations will entail, the costs will likely be high for stores to adopt compliant product policies. In the franchise context, this means that franchisors and franchisees will need to come to an agreement on who will actually bear the costs of changing supply policies in order to maintain viable unit-level economics.

Key Takeaways:

There are a few key takeaways and steps franchised and non-franchised store owners need to take or keep in mind regarding the ban of SUP by the Government of Canada:

1. All store owners should carefully read the Government of Canada’s technical guidelines on what counts as SUP and what falls under the above exceptions. The guidelines can be found here: https://www.canada.ca/en/environment-climate-change/services/managing-reducing-waste/reduce-plastic-waste/single-use-plastic-technical-guidance.html
2. An assessment of inventory should be done, to ascertain compliance of current inventory with the future rules, to give owners an idea of how much SUP inventory they have to sell, export, etc., and to determine how extensive and expensive the changes will be.
3. Retailers should create a workable plan for December, 2023 now. This means speaking with potential suppliers, assessing costs, and in the franchise context, coming to an arrangement with franchisees on how new, potentially large costs will be shared.

If you have any questions about the new prohibitions ore any other regulatory matters affecting your business, please contact Peter Viitre at pviitre@sotos.ca. At Sotos LLP, our lawyers advise businesses in the restaurant and hospitality industry and we look forward to being of assistance to you.

[1] Single-use Plastics Prohibition Regulations 2022-138. Online: https://laws-lois.justice.gc.ca/PDF/SOR-2022-138.pdf
[2] “Change is here: Canada’s ban on certain harmful single-use plastics starts to take effect this month” Government of Canada. December 17, 2022.  Online: https://www.canada.ca/en/environment-climate-change/news/2022/12/change-is-here-canadas-ban-on-certain-harmful-single-use-plastics-starts-to-take-effect-this-month.html
[3] Ibid
[4] “Fact sheet: Exceptions for single- use plastic flexible straws” Government of Canada. Online: https://www.canada.ca/en/environment-climate-change/services/managing-reducing-waste/reduce-plastic-waste/exceptions-flexible-straws-factsheet.html
[5] Ibid.
[6] Supra, note 2.
[7] Mia Rabson, “Government will ban some single-use plastics over the next 18 months” The Canadian Press June 20^th 2022. Online: https://www.cbc.ca/news/politics/plastics-ban-countdown-1.6494379
[8] Ibid.