Provincial Attitudes

Features - Scrap Industry News

Canadian provinces adjust their levels of support for the tire recycling industry.

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March 23, 2006

The province of Manitoba is getting out of the tire recycling business. Last July, Stan Struthers, the minister in charge of Conservation, announced that he was launching an investigation into complaints about the province’s 11-year-old tire recycling program.

In early November of 2005, Struthers received the report on the investigation. After considering the recommendations, the minister decided to turn the program over to industry to run. As a result, Manitoba has the only tire recycling program in Canada that is not government-run, says Paul Courteau, the president of Tire Recycling Corp. (TRC), one of the province’s two principal recycled tire processors.

Courteau notes that the government-supported recycling program was running out of money. "Government representatives told us that raising the current levy on tires to make it profitable would be equivalent to a tax increase," Courteau says.

TREADING CAREFULLY. TRC primarily makes rubber mats for trailers, gyms and rinks as well as rubber sidewalk blocks. The southern Manitoba tire recycling plant last year reprocessed 1 million tires. TRC also began collecting and reprocessing highway trailer and tractor treads in addition to passenger car tires last year.

Throughout the past five years, the company’s workforce has declined—mainly through attrition—from 45 to 25, and Courteau has found that he can do more with fewer people on staff.

Despite fewer workers, production at the plant has doubled during the past year. The difference seems to have been an outpouring of employee-generated innovations that has greatly increased the efficiency of the operation, according to Courteau.

He notes that the provincial levy accounts for 86 percent of the cost of collecting the tires. The program was under-funded, he says.

As a result of the government’s decision, industry now has to determine how to fund tire recycling in Manitoba. Courteau estimates that it will take at least three months to put a new board together and three more months to figure out from where the funding is coming.

"By July 1, we may have some answers," he says. "That’s warp speed compared to the rate the government moved on this matter over the past five or six years."

The government is providing some interim funding, Courteau notes, but comments that $500,000 is inadequate. "It won’t last until July 1," he says.

"We don’t want to be whiners or complainers, but it is not logical to invest $5 million if you’re not going to be able to make a profit," Courteau comments.

WESTERN ROUNDUP. Government support across the rest of Canada for tire recycling varies depending on the province. While the levy in Manitoba is $2.80 per tire, Alberta—to the west of Manitoba—charges consumers a levy of $4 per tire.

"It’s certainly a challenging business," says Allan Champagne of Champagne Editions Inc., one of Alberta’s two major tire recyclers. "It’s a challenge collecting the tires and also finding markets for our new products."

The 14-year-old company, which is based in northern Alberta, collects tires from throughout Alberta and the Yukon Territory to the north. "We have between 1 million and 1.5 million tires in our possession at any given time," Champagne says.

The company’s manufactured products include industrial, dairy and anti-fatigue mats; rubber bricks; tiles for around pools, hot tubs and decks; sidewalk blocks; and livestock, horse and pet mattresses. "We do a lot of custom work," Champagne comments. "We are one of the largest manufacturers of finished recycled rubber products in North America."

Champagne Editions, which employs 100 full-time and up to 50 part-time staff, is currently undergoing an $8 million to $10 million plant upgrade. Work began in late 2004 and, Champagne says, should be completed in another couple of years.

"We are installing more equipment for our customizing lines," Champagne says. "Our goal is to have a state-of-the-art recycling plant."

The province of Saskatchewan—which is sandwiched between Manitoba and Alberta—has the ideal tire recycling program, Courteau says.

Because Saskatchewan is relatively new to tire recycling as a province, Courteau notes, the province was able to build on and improve upon models adopted by other provinces.

Saskatchewan’s levy is $3.50 per passenger tire, $5 for light truck tires, $35 for off-road vehicle tires and $10 for agricultural equipment tires. In 2004, 35 million pounds of tire rubber were reprocessed in the province of about 1 million people, says Teresa McQuoid, the executive director of the Saskatchewan Scrap Tire Corp. (SSTC), which was formed in 1998. The province has two processors and a handful of small manufacturers who reuse the rubber.

The SSTC is also phasing tires out of Saskatchewan landfills. ‘Since 1999, we have cleaned up over 150 municipal landfill sites," McQuoid says. There are still another 150 to go. The speed of the cleanup depends on available funding.

The largest tire recycler in British Columbia, Canada’s westernmost province, is a company called Western Rubber. The company has a capacity of 3 million tires a year and produces and sells crumb rubber for football fields and running tracks. Management declined to be interviewed for this article.

EASTERN DILEMMAS. In Canada’s Maritime Provinces on the East Coast, the major tire recycler is Tire Recycling Atlantic Canada Corp. (TRACC) in the province of New Brunswick.

Stephen Richardson, TRACC’s president, reports that a major competitor in the region—Atlantic Recycled Rubber in Nova Scotia—shut down for a period last fall after three or four years of financial struggle, but is back in operation.

TRACC uses a cryogenic process to produce cow mats for the dairy industry, 4-foot by 6-foot mats for grips and rinks, rubber flanges for patio blocks, rubber pylons and the newest product—imitation bark mulch for slate roofs and shingles. "We ship our products worldwide," Richardson says. "We do a lot of business in England, Ireland and the Netherlands."

The company, which employs 42 workers, processes up to 1 million tires per year. "We have an exclusive contract with the New Brunswick government and we also draw tires from throughout the Maritimes," Richardson adds.

Richardson reports that Prince Edward Island, Canada’s smallest province and one of New Brunswick’s neighbors, scraps about 175,000 tires per year. "Newfoundland (the Maritime province farther north) is trying to start a program for shredding tires," he says. "We are negotiating with the province."

New Brunswick’s subsidy to TRACC comes in two parts, Richardson says. The company receives $1.25 for every tire its collects and a further $1.25 once the rubber is reprocessed and sold.

In Quebec, a major player in tire recycling is Royal Mat Inc. The 22-year-old company processes 3.5 million to 4 million tires per year, using them to produce rubber mats for horses and dairy cows, gyms and doors, acoustic panels and mud flaps.

"Our main markets are in the United States," says Pierre Fortin, Royal Mat’s director of sales and manufacturing. "But we also sell our products across Canada and in Europe, in particular the U.K., and Japan," he says.

Last summer, Fortin reports, the company bought another tire site that will allow Royal Mat to store up to 22 million tires. "We have also increased our capacity for shredding," he says. "We are now producing more crumb than we can use. We are looking to sell the excess crumb."

Quebec’s tire recyclers—of which there are 10, Fortin estimates—are supported by an organization called RecyQuebec. The organization, Fortin says, allocates tires among the recycling companies and pays the stipend for each recycled tire.

"The recyclers and RecyQuebec renew the contract every year," Fortin says. "The government tries to keep the payments as low as possible. There has been no change in the rate in the last couple of years," he adds.

Ontario, Canada’s most-populous province, has no tire recycling program, TRC’s Courteau says. While a tire recycling program was proposed a couple of years ago, the newly elected Liberal Party government turned it down because the government was elected on a promise of no tax increases, according to Courteau.

There are some entrepreneurs who are interested in starting a tire reprocessing business in the province. For now, though, much of Ontario’s annual crop of about 18 million used tires are shredded in the province and shipped to American companies for further processing.

The author is a freelance writer based in Winnipeg, Manitoba, Canada. He can be contacted at myron@autobahn.mb.ca.