As can be seen from the table above, once estimated tonnages from the missing small business segment are added back, the total volumes of material could be very close to the original Gies numbers. And the current 含羞草研究社榩rovincial recovery rate含羞草研究社� could actually be very similar to the rate reported by Gies in 2012. At a minimum, the 含羞草研究社榬eal provincial rate含羞草研究社� has to be lower than what is currently being reported and it is almost guaranteed to be well below the 75% level which is based solely on what MMBC含羞草研究社檚 含羞草研究社榤embers含羞草研究社� report.

Other Factors to Consider in Calculating a Provincial Recovery Rate for Blue Box Recycling

There are several other factors to consider in calculating a 含羞草研究社榬eal recovery rate含羞草研究社� for Blue Box recycling in British Columbia. Two additional sources of potential error in the current method are discussed below.

The Measurement Methodology of MMBC含羞草研究社檚 Members

A number of MMBC含羞草研究社檚 members like ProducerCo struggle with the reporting requirements they face under their contracts with MMBC. Put simply, they are not equipped to quantify and report packaging and paper materials in the manner MMBC requires.

How is a retailer supposed to weigh the various kinds of plastic and paper that flow through its business, accurately? Retailers have enough difficulty accounting for their inventory properly using bar codes, scanners, POS terminals and dedicated inventory management systems without having to track the weights of the various kinds of packaging, paper, cardboard, newsprint and plastic that their customers are going to throw away after they get the products home?

Second, from the 含羞草研究社榤embers含羞草研究社� standpoint the entire purpose for reporting these weights is to provide MMBC with the basis for charging them fees. The entire billing system is a 含羞草研究社榮elf-reporting含羞草研究社� system which results in significant costs to the members. In 2017, these costs amounted to $83.4 million.

Under these circumstances, as in all 含羞草研究社榮elf-reporting systems含羞草研究社�, the 含羞草研究社榖ias含羞草研究社� is always going to be in favour of lower costs, therefor lowering what drives costs. In this case, what drives costs is the reported weights of the packaging and paper that the members flow to their customers.

When you combine the two considerations above, the severe difficulties associated with weighing individual packaging and paper components for thousands of products flowing through a business, together with the self-reporting bias in favor of lowering costs, how likely is it that the volumes reported by MMBC含羞草研究社檚 stewards are complete and accurate? What is the error rate likely to be?

To the extent that MMBC members under-report their plastic and paper volumes, deliberately or otherwise due to the difficulties in trying to figure out the actual volumes, the error is likely to understate what is actually available and thus overstate the 含羞草研究社榩rovincial recovery rate含羞草研究社�.

This is by no means a 含羞草研究社榗riticism含羞草研究社� of MMBC or its 含羞草研究社榤embers含羞草研究社�. It含羞草研究社檚 just an important potential source of error to consider in assessing the accuracy of reported 含羞草研究社榬ecovery rates含羞草研究社� for recycling in British Columbia.

The non-compliant producers

Much has been made of the possibility that there is still an undisclosed number of 含羞草研究社榥on-compliant含羞草研究社� producers under the regulation.

In 2016, the Auditor General highlighted that there were 含羞草研究社榥on-compliant producers含羞草研究社� who needed to be 含羞草研究社榖rought into compliance含羞草研究社�. Presumably, the problem was significant enough to bring to the attention of the Legislature.

All of the non-compliant producers will be flowing packaging and paper into the hands of British Columbians. None of them will be reporting their volumes to MMBC. Their volumes should be taken into account in calculating a 含羞草研究社榩rovincial含羞草研究社� recovery rate. Their volumes would have been included in the Gies report estimates because at that time, there was no such thing as a 含羞草研究社榥on-compliant producer含羞草研究社�.

Again, lacking these volumes of 含羞草研究社榓vailable material含羞草研究社�, any calculation of a 含羞草研究社榩rovincial recovery rate含羞草研究社� will once again be overstated.

Other observations

Other observations arise in looking at the statistics reported by MMBC:

1. MMBC has reported steadily declining volumes of material since 2015. At no time have the reported volumes ever equalled what was reported in the Gies study which benchmarked the original municipal system in 2012.

   One would have expected that with population and economic growth over the five-year period since 2012, tonnages of collected material would have increased substantially.

2. Although MMBC calculates its 含羞草研究社榬ecovery rate含羞草研究社� based solely on volumes reported by its 含羞草研究社榤embers含羞草研究社� instead of having to take into account all the packaging and paper flowing to British Columbians, it is still nevertheless considered to be in full compliance with the BC Recycling Regulation simply because of the wording and interpretation of the regulation itself.

   Perhaps the wording of the regulation needs to be amended to hold MMBC accountable for all the available packaging and paper flowing to British Columbians, not just the amounts that its members report. This would be consistent with its overall mandate for Blue Box recycling in British Columbia and the methodology of the original study (Gies) that was used as the rationale for the program.

3. In 2017, it doesn含羞草研究社檛 appear that MMBC actually achieved a 75% recovery rate, even on the basis of what its members reported.

   Based on the numbers reported in its 2017 Annual Report, (174,942 divided by 234,847), the 含羞草研究社榬ecovery rate含羞草研究社� was only 74.49%.

   It appears that the 75% target rate was achieved by rounding the numbers up.

Summary

In summary, currently reported 含羞草研究社榬ecovery rates含羞草研究社� for Blue Box recycling in British Columbia are not comparable with the rates attributed to the original municipal system because several significant components are being omitted from the current calculations.

If the missing components were added back, it is very likely that current recovery rates for Blue Box recycling would be well below 75% and would be much more in line with rates attributed to the original municipal system.

Currently reported recovery rates are not representative of a true 含羞草研究社榩rovincial recovery rate含羞草研究社� for Blue Box recycling because the current calculations only take into account what MMBC含羞草研究社檚 members report, as opposed to taking into account all packaging and paper flowing to British Columbians from all sources.

Overall Conclusions

This concludes my first submission to the Court of Public Opinion.

The purpose of the submission is to publicly state two of the most serious reasons why in my opinion a Judicial Public Inquiry into the administration of Blue Box recycling in British Columbia is required.

We cannot stand idly by while the government uses it regulatory authority to force us to sign contracts, thereby encroaching on, and diminishing our 含羞草研究社榝reedom to contract含羞草研究社�.

If we allow the government to do this to 含羞草研究社榗orporate citizens含羞草研究社�, we invite the government to do this to 含羞草研究社榩rivate citizens含羞草研究社�. Freedom to contract and the admonition not to interfere with it lightly, applies equally.

Second, we cannot stand idly by while the government uses its regulatory authority to raise money to pay for public sector programs outside the BC Legislature. Legislative control over taxation and the results of government expenditures has been fundamental to our democracy since the days when we took the power of arbitrary and preferential taxation away from kings. We must not allow the return of such arbitrary and totalitarian practices in our province.

Third, we are entitled to be provided with complete, valid and accurate performance measurement information about every public-sector program that we pay for. If the information we are provided is incorrect from a public policy standpoint, we need to demand and receive the correct information so we can assess the merits and the shortcomings not only of the program themselves, but of the governments that administer them.

More matters will be disclosed on Friday, July 20, 2018.

***

Bio: Kelvin McCulloch

Kelvin McCulloch became the President of the Buckerfields chain of nine retail stores in British Columbia in 2005. Buckerfields is a BC heritage business started by Ernest Buckerfield in 1919.

Mr. McCulloch is a Certified Public Accountant (CA/CPA). He holds a Masters Degree in Public Administration and a Bachelors of Arts and Sciences Degree in Political Science from the University of Victoria.

Mr. McCulloch was a Legislative Intern in the BC Legislature in 1979.

Prior to joining Buckerfields, Mr. McCulloch served as a professional auditor and consultant in British Columbia and internationally. He was a Principal in the consulting practice of Ernst & Young Chartered Accountants, later KPMG in Victoria. In KPMG, his consulting career took him to Singapore where he served as Managing Director for KPMG含羞草研究社檚 Asia Pacific Regional Business Performance Improvement Consulting Division.

Mr. McCulloch later joined Oracle Corporation as the Consulting Practice Director for Singapore. He went on to become Director of Special Projects for Asia Pacific. In that capacity he was seconded to the Asian Development Bank in Manila for one year and the Head Office of Matsushita Electric in Osaka, Japan for 18 months where he directed the world wide re-implementation of Oracle含羞草研究社檚 Supply Chain Management software in Panasonic television factories in China, Czechoslovakia, Thailand and Mexico.

Mr. McCulloch含羞草研究社檚 BC government consulting and auditing assignments included:

• conducting first-ever procedural audits of 41 diagnostic medical facilities for the BC Ministry of Health including Vancouver General Hospital, Jubilee Hospital and Island Medical Labs
• Financial Advisor to the BC Gaming Commission for five consecutive years
• accountant and advisor to Board of Duke Point Development Corporation
• follow-up investigation of BC Government advertising expenditures flagged by the Office of the Auditor General
• various consulting and forensic investigations for the BC Ministry of the Attorney General
• field auditor for the BC Ferry Corporation, Federal/ Provincial Young Offender Act Cost Sharing Agreement, Canada Tungsten Mining Corporation, Cypress Anvil Mines, etc.

Mr. McCulloch is an outspoken critic of the BC Government含羞草研究社檚 transfer of Blue Box recycling out of municipal jurisdiction into private sector hands and the way in which the BC Government administers the Packaging and Paper Sections of the BC Recycling Regulation.