Recycled content and labelling rules for plastics: Regulatory Framework Paper

1. Introduction

This document outlines a regulatory framework for plastic packaging and certain single-use plastics that includes recycled content requirements and labelling rules for recyclability and compostability. It is intended to provide an updated and more detailed overview of the regulatory approach the Government is proposing for the draft regulations, which are currently under development. This regulatory framework has taken into account the significant feedback we received from partners, stakeholders and the public during consultations on these proposed rules and requirements. The draft regulations are targeted for publication in Canada Gazette, Part I, before the end of 2023, which will be followed by a further consultation period before the regulations are finalized. Partners and stakeholders are invited to review this document and provide feedback before May 18, 2023.

1.1 Canada’s zero plastic waste agenda

Canadians are concerned about the impact of plastic waste and pollution and want concrete action to improve the recycling of plastics and prevent pollution.

In 2018, Canadians threw away 4.4 million tonnes of plastic waste, only 8 percent of which was recycled. The vast majority of plastic waste ends up in landfills, while about 1 percent - that is about 1 kilogram per person in Canada per year - ends up in the environment as plastic pollution. Implementing a circular economy for plastics could reduce plastic and carbon pollution, generate billions of dollars in revenue, and create approximately 42,000 jobs by 2030.

The Government of Canada is continuing to bring forward new measures to better manage plastic and move towards its goal of zero plastic waste. This includes investing in science and improving our knowledge of plastic waste and pollution, greening government operations and procurement, collaborating with provinces and territories, and working with industry leaders to facilitate industry-led solutions.

Recycled content requirements and labelling rules for plastic packaging are part of a broader suite of measures, which include:

• banning harmful single-use plastics, which will prevent 22,000 tonnes of plastic pollution and 1.3 million tonnes of hard-to-recycle plastic waste over 10 years
• developing an open and accessible federal plastics registry to require producers to report on plastics in the Canadian economy; and
• establishing ambitious value recovery targets for plastic beverage containers, in collaboration with provinces, territories, and industry

Together, these measures, alongside initiatives being undertaken by other levels of government, civil society and industry leaders, will help move Canada towards achieving zero plastic waste.

1.2 Packaging, single-use plastics, and the circular economy

Plastic packaging and single-use plastics (SUPs) form a significant part of the Canadian plastics economy, making up over 35% of all plastics placed on the market in 2018. Due to their short lifespan (typically less than 1 year), they also make up over 50% of all plastic waste generated in Canada, but less than 14% are recycled, meaning the vast majority of plastic packaging and SUPs end up in landfills or in the environment as pollution after only one use.

Following the waste management hierarchy, reducing plastic use and adopting reusable options are preferable. However, building a circular economy for plastics in Canada will also require improving how plastic packaging and SUPs are designed, used and managed at end-of-life. Where the use of plastic packaging and SUPs cannot be avoided, the Government recognizes that recycling will play a significant and crucial role in keeping these plastics circulating in the economy.

Figure 1: Waste management hierarchy

To keep plastics circulating, recycling systems must be efficient and operate effectively at scale. Recycling is a process that involves, at a minimum, collection, sorting and re-processing. Available data shows that, under the current system, packaging that could be recycled is instead sent to landfill at each stage. As can be seen in figure 2 below, the collection stage is a major bottleneck, but even for plastics that are collected for recycling, approximately 30% is sent to landfills or incinerators.

Figure 2: Plastic packaging flows, 2018

A 2019 study commissioned for Environment and Climate Change Canada estimated that, to achieve that study’s scenario for zero plastic waste, the following outcomes would be required from the packaging recycling stream^{Footnote 1} :

While the above table shows sorting and re-processing yields that would be necessary to meet a proposed zero plastic waste scenario, this reflects a system optimized for only certain kinds of plastics, such as polyethylene terephthalate (PET) (for example, beverage bottles and clamshell containers) or high-density polyethylene (HDPE) (for example, shampoo bottles and detergent jugs). Higher collection rates would introduce new forms of plastics such as flexibles (for example, plastic wrap and pouches) into the recycling stream. Sorting and re-processing yields would need to maintain their current performance levels under these new, more challenging conditions. Measures are therefore needed to:

• significantly increase collection rates, and
• maintain sorting and re-processing yields to ensure they do not decline or backslide due to an increase in the collection of packaging and SUPs that may be more difficult to recycle and were previously kept out of the recycling stream due to the difficulties and inefficiencies associated with managing them

2. Overview of the framework

Achieving a circular economy for plastic packaging can only be achieved through cooperation between all levels of government, as well as with industry leaders. Federal, provincial and territorial governments each have a role to play in driving systems change in Canadian recycling streams. The regulatory framework recognizes this by ensuring federal measures complement and enhance those enacted at the provincial and territorial level.

2.1 Federal measures

The Government proposes to enact regulations using authorities under the Canadian Environmental Protection Act, 1999 (CEPA) to implement the framework. The proposed regulations would have 3 key elements:

• recycled content requirements that mandate minimum levels of recycled post-consumer plastics in packaging
• recyclability labelling rules requiring accurate information be communicated to Canadians on whether packaging or SUPs are recyclable, and how to dispose of them properly
• compostability labelling rules prohibiting the terms “biodegradable” or “degradable” on plastic packaging and SUPs and limiting the use of the term “compostable” to plastics that meet certain standards and labelling requirements

2.2 Provincial and territorial measures

Regulations enacted under CEPA would operate alongside provincial and territorial extended producer responsibility (EPR) policies. EPR is a policy approach in which a producer is made responsible for the collection and management of products and packaging at the end of their life. EPR can take a wide variety of forms, such as take-back programs, curbside collection systems, and deposit-refund schemes. Full EPR means that producers are responsible for funding and operating the program, and for meeting targets for collection and management of materials. In Canada to date, provinces and territories have taken the lead in developing and implementing EPR policies for a range of product categories, including packaging. It is expected that EPR policies for packaging will be in place in most, if not all, provinces and territories by 2030. These programs would:

• expand collection programs for products that would be covered by these regulations
• incentivize design for recycling, and improve recycling infrastructure for plastic packaging and SUPs, particularly where EPR programs include diversion targets
• increase consistency in collection and recycling programs across Canada

2.3 Impacts

Each of the above federal and provincial/territorial measures (recycled content, labelling rules, EPR) would improve recycling on their own. Working together, however, the combined impact of these measures would be greater by exerting coordinated pressure on key points in the plastics lifecycle to achieve more transformative changes:

• Recycled content requirements strengthen demand and market certainty for recycled plastic
• Labelling incentivizes design for recyclability and improves the quality of supply of plastics to the recycling stream via accurate information
• EPR increases collection rates and drives performance improvements across the recycling stream via outcomes-based targets focused on collection, sorting and recycling rates

Figure 3, below, illustrates how each of these measures can work together by targeting different points in the packaging lifecycle:

Figure 3: Impacts of regulatory framework across the plastic packaging lifecycle

The framework would seek to maximize the overall impact of these federal, provincial and territorial measures across a range of areas to achieve the desired systems change, including:

• trust and participation: Canadians want to participate in the circular economy, but this is made difficult by issues including a lack of reliable and accessible information, increasingly complex packaging designs, and overall poor recycling outcomes that threaten Canadians’ trust in recycling systems
  • the framework would seek to reinforce trust in recycling and give Canadians the information they need when purchasing and disposing of packaging
  • this would help ensure participation in recycling systems and increase the quality of inputs to the recycling stream
• eco-design: design is one of the most important factors in improving recycling outcomes
  • packaging that is not designed to be recycled decreases the efficiency of recycling systems
  • labels on packaging that do not provide useful information make it difficult to know whether and how to recycle packaging at home
  • designing packaging to be made only from new, fossil-fuel based plastic suppresses end-markets for recycled plastics and removes incentives to invest in recycling infrastructure
  • the framework would seek to improve the design of packaging to make it more recyclable, make it more informative for Canadians, and turn it into a reliable end-market for recycled plastic
• system efficiency: recycling is a process that requires collection, sorting and re-processing of end-of-life plastics into material that can be used in new products
  • currently, each of these stages suffers from inefficiencies that reduce overall yields (for example, the amount of outputs produced compared to inputs to the system)
  • collection rates, sorting rates, re-processing rates, and end market demand for recycled plastics must all be improved before recycling can contribute effectively to the circular economy
  • the framework would seek to achieve significant improvements at each of these stages in the recycling process to reduce the amount of plastics that ends up in landfills, incinerators or the environment

The systems change being sought through the framework is necessary to achieve specific targets that support the Government of Canada’s broader goal of moving toward zero plastic waste, including:

• implementing Canada’s commitment to require at least 50% recycled content in plastic packaging by 2030, as outlined in the 2021 mandate letter of the Minister of Environment and Climate Change
• working with industry towards 100% reusable, recyclable, or, where viable alternatives do not exist, recoverable, plastics by 2030, as outlined in the Ocean Plastics Charter
• working with industry and other levels of government, to recycle and reuse at least 55% of plastic packaging by 2030 and recover 100% of all plastics by 2040, as outlined in the Oceans Plastics Charter, and
• working with Canadian Council of Ministers of the Environment (CCME), to implement the Canada wide Strategy on zero plastic waste

3. Scope of application

The proposed regulations would apply to the parties and plastic items outlined below.

3.1 Regulated parties

The objective of the framework is to regulate entities with the most control over the design and marketing of plastic packaging and SUPs. This means:

• targeting the point at which filled or finished^* packaging and SUPs are placed on the market, and
• capturing companies that place filled or finished* packaging and SUPs on the market either by manufacturing or importing under their brand, such as their company name or using a trademark, wherever possible

^*Finished packaging refers to packaging, such as a roll of bubble wrap for personal use that is sold to the final end user in its final form.

In many cases, brand owners will become the regulated party. This aligns with EPR policies at the provincial and territorial level, where brand owners are identified as the preferred “producer” to fund and operate recycling systems.

3.2 Application to plastic packaging and SUPs

The regulatory framework applies to plastic packaging for both recycled content and labelling requirements. The proposed labelling rules would also apply to SUPs which are significant contributors to plastic pollution, as they are designed to be discarded after their single use has been fulfilled.

Packaging is anything used for the containment, protection, handling, delivery, storage, transport and presentation of goods, from raw materials to processed goods, from the producer to the user or consumer, including processor, assembler or other intermediary. This definition is derived from international standards such as ISO 18604, and largely mirrors other instruments regulating the circularity of packaging in Canada (for example, provincial and territorial EPR laws and regulations) and in other jurisdictions (for example, the European Union).

Packaging as a category can be broken down into several sub-categories. Two sub-categories would be subject to regulations under the framework, as they are the categories most implicated in improving recycling outcomes:

• primary packaging, which is packaging designed to come into contact with a product
• secondary packaging, which is packaging designed to contain one or more primary packaging items, together with any protective materials where required

In addition, e-commerce packaging, a type of tertiary (or transport) packaging, would be subject to the regulations. Other types of tertiary packaging would be exempted (see General exemptions).

Packaging is often categorized as either “residential” or “institutional, commercial or industrial” (ICI). Residential packaging is what is sold to the public (for example, on a store shelf), and which Canadians bring home and dispose of themselves. This is the packaging that will be captured by the recyclability and compostability labelling rules that are described in more detail in section 5. ICI packaging will not be subject to labelling rules as it is bought by businesses and institutions, and is not typically seen or handled by the public. However, both residential and ICI packaging will be captured by the recycled content requirements that are described in more detail in section 4.

Each of the key elements of the framework (recycled content, recyclability labelling, and compostability labelling) have some special considerations that make the scope of application somewhat different for each.

3.3 General exemptions

Plastics recycling systems in Canada mostly focus on managing packaging and other products that are single-use or otherwise short-lived, and that are largely consumer-facing. Recycling these items is important because other management options higher on the waste management hierarchy, such as reuse and repair, are typically not feasible. The framework focuses on these single-use or short-lived packaging and products to improve their recycling outcomes. Regulations would therefore propose the following exemptions, so that rules are targeted and avoid unintended consequences:

• packaging that is waste: waste plastics could still be sold, transferred and imported or exported as appropriate and in line with regulatory requirements at local, provincial, territorial, national and international levels without needing to meet recycled content or labelling rules
  • this means, for example, that recyclable plastics from another country such as the United States could be imported into Canada for sorting or re-processing without having to meet recycled content or labelling rules
• reusable packaging: packaging that can be used many times in a reuse or refill system would be exempted from labelling and minimum recycled content requirements
  • this approach is intended to encourage the innovation and growth of environmentally responsible reusable alternatives in the Canadian market
  • in the Government of Canada’s consultations, many stakeholders were supportive of incentivizing reusable packaging through exemptions or other means
  • however, some reusable packaging would be subject to requirements for record-keeping and reporting to ensure they are part of a functional reuse system that Canadians can access
  • a reuse system can mean any one of the following:
    • closed loop: system and/or packaging is owned by the original packaging manufacturer or co-operating group of companies, who also manage the reuse or refill of the packaging (for example, a shipping service that uses reusable packaging to deliver a product and reverse logistics to collect the packaging after use)
    • hybrid: packaging remains with the end user, and is reused or refilled by auxiliary products that transport the contents to the end user, such as concentrated refill packs
      • Note: auxiliary products that are not themselves reusable, for example, are single-use products, would be covered by the regulations
• tertiary (or transport) packaging (except e-commerce packaging): designed to contain one or more articles or packages, or bulk material, for the purposes of transport, handling and/or distribution
  • transport packaging, such as pallets, crates, and pallet wrap, can be applied and removed by different businesses along a supply chain, including internationally, such that regulatees (particularly importers) may have little or no control over the recycled content in this packaging
  • many types of tertiary packaging are also reusable
• packaging intended for export to another country
  • exported packaging would not be expected to be recycled in Canadian recycling systems
• goods in transit through Canada, from a place outside Canada to another place outside Canada, and are accompanied by written evidence establishing that the items are in transit
  • this would be included as part of Canada’s obligations under the WTO’s Agreement on Trade Facilitation

With the exception of compostable plastics as defined in the regulations, the labelling and recycled content requirements in the regulations would apply to biobased plastics (in other words, plastics made from renewable resources) in the same manner as conventional plastics. While some biobased plastics offer environmental benefits during their production, they create the same end of life challenges as their conventional plastic counterparts that the proposed regulations seek to address.

As noted above, each of the key elements of the framework (recycled content, recyclability labelling, and compostability labelling) may also have specific exemptions, which are outlined further below.

4. Recycled content requirements

The Government of Canada published a technical issues paper for stakeholder comment in February 2022. Comments from stakeholders were considered in developing the proposed requirements.

4.1 Special rules on regulated parties

The Regulations would exempt any company from recycled content requirements that, in the previous calendar year:

• had a gross revenue of under $5,000,000; or
• placed less than 10 tonnes of plastic packaging on the Canadian market

The purpose of these thresholds would be to exempt small businesses, as well as companies that do not place packaging on the market as a part of their normal business operations.

4.2 Scope

The packaging subject to and exempt from the recycled content requirements are outlined below.

4.2.1 Categories of packaging subject to recycled content requirements

Plastic packaging is divided into 2 broad categories: rigid and flexible.

• rigid packaging: packaging whose shape remains essentially unchanged after the contents are added or removed
• flexible packaging: packaging designed to change shape under tension or heat, whether in bulk or discrete forms
  • bulk forms include items such as rolls of shrink film, stretch film, and other film intended to be applied to products for packaging purposes
  • discrete forms include containers that are likely to change shape when contents are added or removed, such as bags, pouches, tubes, and sachets
  • this category includes flexible beverage containers (for example, juice pouches), waste bags, and flexible foam packaging such as polyethylene foam

In recognition of differences in the technical readiness for recycled content between some packaging applications and resins, as well as existing requirements in other jurisdictions, these 2 categories have been further broken down into subcategories with different targets and timelines.

For rigid packaging:

• PET and HDPE rigid packaging: rigid packaging made from more than 50% PET or HDPE by weight such as clamshells, jars and tubs
• beverage bottles: a rigid container normally having a comparatively narrow neck or mouth, made primarily of plastic, that is sealed with a cap and designed for beverages, such as water, soft drinks, juice, and alcoholic beverages
• other rigid packaging: rigid packaging made from any other plastic resin including polypropylene (PP), polystyrene (PS), and expanded polystyrene (EPS) foam such as trays, cups, bottles for cleaning products and packing peanuts
• special categories: rigid packaging used for the following product applications: cosmetics (Food and Drugs Act), pest control products (Pest Control Products Act), consumer products containing a hazardous ingredient (Consumer Chemicals and Containers Regulations, 2001) and foams used for protective packaging where no alternative material can be used

For flexible packaging:

• waste bags: a bag designed to contain and transport waste, whether to be disposed or recycled, and that may be closed after filling
• by average thickness (thick ≥ 35 μm; medium 20-35 μm; and thin ≤ 20 μm): with thinner packaging having lower targets
• special categories: flexible packaging used for the same product applications as rigid special categories (see above)

Waste bins were removed from the scope of the regulations proposed in the Technical Issues Paper to be consistent with the exemption for reusable products.

4.2.2 Sub-categories excluded from recycled content requirements

The regulations would exclude certain packaging sub-categories from recycled content requirements. Most of these sub-categories relate to health, nutrition or safety. These include:

• food-contact packaging (in other words, primary packaging for food), except containers for beverages
  • due to strict food safety requirements under the Food and Drugs Act and Regulations, food-*grade recycled resins are in very limited supply for many types of food packaging
  • recycling processes producing food-grade PET and HDPE are relatively mature, and beverage bottles made from these resins have a proven ability to incorporate high levels of recycled content
  • the Government of Canada is planning to consult on the use of a pollution prevention notice requiring the preparation and implementation of a pollution prevention plan as an alternative instrument to address primary food plastic packaging
• packaging (primary and secondary) for a range of products regulated by other Acts, such as the Food and Drug Act, Health of Animals Act, Cannabis Act, Transportation of Dangerous Goods Act, 1992, Hazardous Products Act, Assisted Human Reproduction Act and Human Pathogens and Toxins Act
  • this includes dairy products, infant food, drugs, medical devices, dangerous goods and hazardous products
• durable packaging used for long-term storage: such as first-aid boxes, CD and DVD cases, and toolboxes
  • it is not the intent to capture these items as packaging, as they are designed to remain with a product for long-term use
• packaging that is an integral part of the product it contains: this means the product cannot be used/consumed without the packaging
  • examples include printer cartridge cases, lighters, and earphone cases that act as a charging port
  • it is not the intent to capture these items as packaging, as they are necessary to the functioning of a product
• compostable plastic packaging: in the Government’s consultations, most stakeholders were supportive of this exemption, due to the technical incompatibility of compostable plastics with recycled content
  • compostable plastic packaging would be subject to labelling requirements in the regulations

4.3 Levels of recycled content required and timelines

Any company subject to the regulations would need to use a specified minimum amount of recycled content within each broad packaging category (rigid or flexible). The amount required would be based on the amount of plastic used in, and percentage targets for, each product category (for example, beverage bottles) and would have to be calculated by each company on an annual basis according to a formula in section 4.4.

The Schedule of products would be as follows:

* Other types of beverage containers would be captured elsewhere in the product schedule, according to their format. For example, drink pouches would be subject to targets for flexible packaging.

** Recycled content targets for flexible packaging would be differentiated based on thickness of the packaging material. This approach recognizes the technical barriers to using recycled content in thin flexible packaging, and the potential for higher targets in thicker films that use more plastic. There would be three thickness ranges:

• thin: less than 20 µm (lowest targets indicated in Schedule)
• medium: 20-35 µm
• thick: over 35 µm (highest targets in Schedule)

Note that where the Schedule indicates “report only”, companies would not need to have used recycled content in these products but would still be required to report on use of recycled and total plastic.

4.4 Demonstrating compliance

In order to demonstrate compliance to the recycled content requirements, regulated parties must utilize a mass requirement formula and attest these results via record-keeping and verification schemes.

4.4.1 Method for demonstrating compliance

Each company would be required to calculate, separately, the amount of recycled content required to be used in each packaging category (rigid and flexible), as appropriate, according to the following formula:

Where:

• R = mass requirement
• T = percentage target (as defined in the product Schedule), expressed in decimal form
• M = mass of total plastic, in kg
• Terms in parentheses refer to the applicable product categories

For example, a company manufacturing or importing rigid packaging including beverage bottles, rigid packaging, and cosmetics (special category) would calculate their mass requirement based on the total mass of plastic in all applicable products put on the market in each product category and the respective minimum recycled content targets for that reporting year. Any flexible packaging manufactured or imported by this same company would have a separately calculated mass requirement, and no recycled content used in rigid packaging could count towards meeting the mass requirement for flexible packaging.

Companies would calculate the mass requirement based on the sum of the masses of plastic used in all individual products in each product category in the calendar year, and compliance would likewise be demonstrated by summing up the masses of recycled plastic used in all products. Companies would report their mass requirement and the amount of recycled content they have used. Accompanying documentation would have to be kept on record.

4.4.2 Compliance verification

In the initial years following coming into force of the regulations, companies would be required to verify compliance with recycled content requirements by keeping records and attesting that the annual report submitted to the Minister is accurate.

Starting in 2028, companies would be required to either:

• have all products reported to use recycled content be certified to an approved third-party certification scheme for recycled content; or
• have their annual report and associated records verified by a third party for conformance to specified regulatory requirements
  • the third-party would need to verify, at minimum, that a company’s records support the data and calculations submitted to Environment and Climate Change Canada in their annual report
  • companies would have to ensure the third party meets certain minimum requirements (for example, accredited to ISO 17029) to ensure they are capable of performing the verification

In the Government of Canada’s consultations, the majority of stakeholders noted the importance of credible third-party standards to ensure a level playing field for the verification of recycled content. However, no single standard or certification was agreed upon for this purpose. A phased in approach to third party requirements recognizes that certification schemes for the verification of recycled content may not currently have the capacity to serve all companies that would be subject to the recycled content requirements.

Allowing verification by a third party as an alternative option would ensure companies follow quality material management practices. This is also expected to be a lower-cost option for companies that are less concerned with the benefits of certification (for example, certified product claims/labels).

4.5 Acceptable sources of secondary plastic

Post-consumer resin: Under the regulations, recycled content would be defined as plastic that is derived from post-consumer sources only, also known as post-consumer resin (PCR). PCR is plastic diverted or discarded by residential, commercial, industrial, or institutional end users of a product. Other types of recycled plastic, such as pre-consumer (also known as post-industrial) resins diverted from manufacturing processes prior to its use in a product, would not count towards recycled content targets.

In the Government of Canada’s consultations, viewpoints were mixed on whether to allow pre-consumer resin to be counted as recycled content. At the same time, many stakeholders emphasized the need to strengthen market demand for post-consumer plastics relative to pre-consumer resins which they suggested are typically managed through business-to-business arrangements. This approach is consistent with the majority of recycled content requirements in other jurisdictions and no evidence was provided to support government action on pre-consumer resin.

Chemically recycled resin: Regulated parties must ensure that any recycled content that comes from a recycling process that uses mass balance allocation only allocates recycled content to the outputs that are used in the production of plastic products. For further clarity, when a supplier of recycled content uses a plastic recycling process that generates outputs used in products other than plastics (including fuels used on site, or sold as fuels), the proportion of outputs used in the non-plastic products must be counted as a loss in the mass balance calculation.

In the Government of Canada’s consultations, a majority of stakeholders supported allowing recycled resin from all recycling technologies. No evidence was provided to prohibit recycled resin from any specific technologies. At the same time, some stakeholders expressed concern over the impacts and transparency of chemical recycling, in particular conversion technologies that convert plastics to basic chemicals, which can be used to produce a wide variety of products including but not limited to plastics. In particular, these stakeholders expressed concern about the production of fuel being counted as recycled content through mass balance accounting at the recycling stage.

Book and claim (credit trading): The regulations would not allow companies to claim recycled content credits from suppliers that use a book and claim model for compliance purposes. The book and claim chain of custody model, defined in ISO 22095, allows a decoupling of the production of recycled plastic from the end user/product through the creation and transfer of certificates or credits between companies. For example, under this model a recycler could sell recycled plastic to a company that is not concerned about making an environmental claim while also selling a certificate of credit representing an equivalent amount of recycled content to a company that does want to claim recycled content in its product. Credit trading could encourage companies to purchase credits rather than recycled plastic, which could limit the use of recycled content to applications that can most easily use it (for example, plastic lumber) and result in a reduced supply of physical recycled plastic available to packaging manufacturers. This rule would ensure that plastics continue to circulate in the economy in the products claimed to contain recycled content.

4.5.1 Reporting and recordkeeping

Companies would be required to:

• report annually on the amount of total plastic and the amount of recycled content used in each packaging (rigid and flexible) and product category in the previous calendar year
• keep records on the use of recycled content in all product categories
• keep records on the use of reusable packaging
• keep records that demonstrate:
  • any reported recycled content is in fact PCR
  • compliance with the provisions for chemically-recycled resin described above
  • that no recycled content reported is representative of credits generated through a book and claim chain of custody model

5. Recyclability and compostability labelling rules

In July 2022, the Government of Canada published the Consultation paper: Towards Canada-wide rules to strengthen recycling and composting of plastics through accurate labelling, which outlined the proposed approach to developing labelling rules for plastics. Comments from stakeholders on the consultation paper, as well as those received during virtual engagement sessions, were considered in the development of the regulatory framework for the proposed regulations.

5.1 Scope

Recyclability and compostability labelling rules would apply to consumer-facing primary and secondary plastic packaging, as well as single-use plastics.

“Consumer-facing” should be understood to mean packaging that individuals would be expected to dispose of themselves, either at home or away from home such as in a restaurant.

“Single-use plastics”, as defined in the Technical Guidelines for the Single-use Plastics Prohibition Regulations, would include any plastic product designed to be used only once or for a short period of time for its original purpose before it loses its original functionality, physical capacity or quality or before it is discarded.

As a general rule, recyclability and compostability labelling rules would apply to any packaging typically included within the scope of provincial or territorial EPR policies, as well as single-use plastics. This would also apply to e-commerce packaging.

For recyclability labelling rules, exempted items would be scoped narrowly, and would align broadly with food labelling rules found in the Food and Drug Regulations:

• packaging with a display surface of less than 15cm², unless the packaging is contained within additional packaging (for example, secondary packaging), in which case the label must be applied to the secondary packaging
• packaging for a product sold only at a road-side stand, craft show, flea market, fair, farmers’ market or sugar bush by the individual who prepared and processed the product; and
• food packaging sold only in the retail establishment where the food is packaged, if it is
  • normally not labelled or only labelled by means of a sticker, and
  • has an available display surface of less than 200 cm²

No exemptions are proposed for compostability labelling rules.

5.2 Prohibited activities

The following activities would be prohibited under recyclability and compostability labelling rules:

• use of the “chasing arrows” symbol, except in accordance with the labelling rules
• use of resin identification codes that incorporate the “chasing arrows” symbol
• any term, symbol or expression that communicates that an item is recyclable or instructs a person to recycle the item, except in accordance with the labelling rules
• the terms “compostable”, “biodegradable” or “degradable” or any form of those terms implying that the product will break down, fragment, or biodegrade in the environment (for example oxodegradable, oxydegradable, photodegradable, oxobiodegradable), except for compostable in accordance with the rules set out below
• use of green coloured labelling, striping, or tinting of non-compostable plastic items that are associated with organic wastes (for example food packaging)
• the terms “home” or “backyard” compostable

5.3 Measuring recyclability

In July 2022, the Government consulted on an approach that used recycling markets as a proxy for determining recyclability. This approach assumed that only plastics with reliable end markets would be recycled. During consultations, the Government heard that:

• recycling markets are not necessarily reliable indicators of recyclability, for example:
  • plastics may be successfully recycled via EPR or municipal recycling programs that operate at a loss and are funded using producer fees and public funds, respectively
  • re-processors may purchase bales with the intention of only recycling a portion of that bale
• provinces and territories are developing EPR programs that may not be aligned with the regional groupings that had originally been proposed
  • an approach that considers provincial and territorial efforts is needed
• EPR is being adopted and implemented across Canada, and producers will be subject to outcomes-based targets related to collection, sorting or re-processing
  • these targets would need to be met regardless of the reliability of end markets

As a result, the proposed approach for measuring recyclability will be more outcomes-based and data-driven, focusing on overall systems performance and material flows. This could include for example, using yield data obtained from EPR programs to determine the quantities of plastic packaging being successfully collected, sorted and re-processed.

5.3.1 Overview of recyclability measurement test

Before placing an item on the market, regulated parties would be required to assess its recyclability in each province or territory where the item is sold. For the purposes of the recyclability test, Nunavut will continue to be considered as one combined market with Quebec.

An assessment would need to be made for each of the following, as the case may be:

• packaging or a single-use plastic that is a single plastic manufactured item, such as a clamshell container made from PET
• packaging or a single-use plastic that contains a plastic manufactured item that cannot be easily separated by hand or by using simple physical means, such as a drink carton that has multiple layers of plastic, paper or metal; or
• a component of packaging or a single-use plastic that can be separated by hand or by using simple physical means that is a plastic manufactured item, such as a bottle cap

Each of the items described above would need to be assessed against 3 criteria:

1. Is the item accepted in collection system accessible to at least 80% of the population in a province or territory?
2. Can the item be sorted into a bale with a sorting yield of at least 80% going to North American re-processors?
3. Does the bale have a re-processing rate for North American re-processors of at least 80%?

5.3.2 Criterion 1: collection

The first criterion is intended to make sure that Canadians are able to put the item in the recycling bin. This means that the following test must be met:

• the item (or a category to which the item belongs, such as “bottles” or “containers”) must be identified in the public communications of a collection system as accepted for collection in that system
• the collection system must
  • be free to use (for example, no user fees)
  • in urban areas
    • offer collection directly from residences at least once every 2 weeks, and
    • operate at least as many collection sites (for example, depots) as there are collection sites for household garbage; and
  • in rural areas
    • operate at least as many collection sites (for example, depots) as there are collection sites for household garbage
• 80% of the population in a province or territory must have access to collection systems that meet the above requirements

5.3.3 Criterion 2: sorting

Criterion 2 is intended to make sure the item can be successfully sorted into a bale that can be sent to North American re-processors for recycling.

To meet criterion 2, regulated parties would need to determine whether the sorting yield for a category to which item belongs is at least 80%. This means that 80% or more of a category of plastic to which an item belongs, and which enters sorting facilities, exits sorting facilities in bales that are successfully transferred to North American re-processors for recycling.

In addition, regulated parties would need to determine whether any characteristic of an item would prevent that particular item from being sorted. This could include:

• resin type
• size, shape, colour
• presence of liners, labels or similar components
• presence of multi-material layers
• likelihood of the presence of food or other product residue that may be difficult to clean
• presence in the item or component of additives that
  • under a federal, provincial or territorial law or regulation, results in the item or component being prohibited from being recycled
  • are prohibited under bale specifications, or
  • have a deleterious effect on plastic when recycled

5.3.4 Criterion 3: re-processing

Criterion 3 is intended to make sure the item can be successfully re-processed into feedstock for new plastic products and packaging.

To meet criterion 3, regulated parties would need to determine whether the re-processing yield for a bale category to which an item belongs is at least 80%. This means that 80% or more of the bales into which an item could be sorted and that enters re-processing facilities exits as feedstock that can displace the primary resin the item was made from.

As with criterion 2, regulated parties would need to determine whether any characteristic of an item would prevent that particular item from being re-processed.

5.4 Recyclability labelling requirements

This section will provide an overview of the labelling requirements for recyclability.

5.4.1 Recyclability categories

Once a regulated party has assessed each item for recyclability, it would need to categorize the item based on the results as:

• recyclable for items that meet all three criteria in each province or territory into which an item will be sold
• non recyclable for items that do not meet all three criteria in each province or territory into which an item will be sold
• collected for recycling for items that meet the first criterion in each province or territory into which an item will be sold^{Footnote 2}

5.4.2 Recyclability labels

Based on the recyclability category assigned to the item, the regulated party would then need to affix a label to the item. The label design would be prescribed by regulations and follow one of 2 formats. Where components fall under different recyclability categories, labels would need to follow the format shown in the example in figure 4. In this example, the plastic item includes 2 components: a tray and film. In this case, the tray, meets all of the recyclability criteria and must be labelled as “recyclable”. The film, or wrap around the tray, does not meet the recyclability criteria and therefore must be labelled as “non-recyclable”.

Figure 4: Illustrative example of a recyclability label

Where there are no separable components, or where all components fall under the same recyclability category, a simplified label could be used, using the format shown in the example in figure 5. This could include for example, a margarine tub where both the lid and container meet all three recyclability criteria.

Figure 5: Illustrative example of a simplified recyclability label

While labels would only be required for plastics, companies could also use it for non-plastics. This would avoid the need for multiple recyclability labels. While the information communicated for non-plastics would not be subject to the regulations, companies would still need to follow rules related to environmental claims, such as those under the Competition Act, which prohibits, among other things, false or misleading representations and representations that are not supported by adequate or proper tests.

5.4.3 QR codes

In addition to affixing a label to the item, regulated parties would be required to include a QR code that provides Canadians information about the item’s recyclability. The information must:

• link to a website that is freely available (for example, no fees and no requirements to provide data such as setting up an account)
• identify the provinces and territories in which the item is recyclable, non recyclable, or collected, as the case may be
• provide an explanation of why the item is recyclable, non recyclable, or collected, as the case may be, in each province and territory into which an item will be sold
• provide instructions on how to prepare an item for recycling, such as by rinsing the item or separating components
• meet a conformance level of AAA^{Footnote 3}  in the latest version of the Web Content Accessibility Guidelines^{Footnote 4}  and
• be available in English and French

In addition, the website would need to prominently display the following text and images:

Canadian recyclability label for plastic packaging and single-use plastics:

The Canadian recyclability label is meant to tell you about the plastic packaging and single-use plastics that you buy. The label informs you:

• if something is recyclable or not, and
• how to prepare an item to be disposed of

The label can have different symbols that show if something can be recycled or not:

Table 3 provides the 3 Canadian recyclability labels for plastic packaging and single-use plastics. The first label is the chasing arrows symbol, which consists of a triangle formed by three arrows pointing to one another in clockwise loop. This chasing arrows has a check mark in the middle indicating that something is recyclable. The second label is the chasing arrow symbol with an x in the middle indicating that something is non-recyclable. The third label is a chasing arrows symbol with 3 breaks in the second arrow in the loop and a check in the middle of the loop to indicate the something is collected for recycling.

5.5 Compostability labelling requirements

This section will provide an overview of the labelling requirements for compostability.

5.5.1 Labelling terms

Regulated parties would be prohibited from labelling items with the term “degradable” or “biodegradable”, or any form of those terms that implies the item will break down, fragment, or biodegrade in the environment. These items would further be required to be labeled “non recyclable.”

In consultations, stakeholders indicated broad support for this proposal, recognizing public confusion with these terms, and that these items are known contaminants in organic waste and recycling systems. Furthermore, no accredited standards were identified during consultations that would ensure the biodegradation of a plastic item in the Canadian environment within an acceptable timeframe, and without causing harm in the environment.

5.5.2 Third party standards and certifications

Items labelled “compostable” would be required to be certified by an accredited third party^{Footnote 5}  to an acceptable standard specification for compostable plastics. The following standards are proposed as acceptable options:

1. ASTM D6400 - Standard Specification for Labelling of Plastics Designed to be Aerobically Composted in Municipal or Industrial Facilities,
2. ASTM D6868 - Standard Specification for Labeling of End Items that Incorporate Plastics and Polymers as Coatings or Additives with Paper and Other Substrates Designed to be Aerobically Composted in Municipal or Industrial Facilities
3. ISO 17088(2021) - Plastics – Organic recycling – Specifications for compostable plastics, or an accredited standard specification that has equal or more stringent timeframes for disintegration and biodegradation of the plastic

In addition, regulatees would be required to demonstrate that their items labelled compostable:

• have undergone an in-field test at a composting facility in Canada, demonstrating that the item has disintegrated by at least 90% during the actual composting cycle for that facility
• are associated with organic wastes, like food scraps and yard trimmings

Items would also need to meet the following requirements, to avoid detrimental impacts of compostable plastic on the quality of compost:

• the concentrations of regulated metals and other elements in the compostable plastic item would be required to be less than or equal to 50% of the maximum concentrations of Category AA compost as specified in the document Ontario Compost Quality Standards
• the concentrations of total organic fluorine in the compostable plastic item would be required to be less than 100 ppm

Third party certifications meeting the above requirements would be acceptable.

5.5.3 Labelling requirements for compostable items

In its consultations, the Government heard that both the public and facility operators have difficulty distinguishing compostable plastics from ‘look-alike’ plastics that do not compost in industrial composting conditions and that distinctive markings or colour schemes would improve the identification of certified compostable plastic items.

As a result, the Government proposes that labels on compostable plastic items be required to:

• display the word “compostable” in addition to language qualifying that this term is specific to industrial composting facilities
• be labelled “non recyclable”
• use green coloured labelling, striping or tinting to help differentiate compostable from non-compostable plastic items

Third party certification logos/marks meeting these requirements would be acceptable.

Requirements specific to PLU produce stickers

While PLU produce stickers may appear small and insignificant, collectively they can amount to a large number of contaminants, with thousands of stickers used daily. Sorting of the stickers at organics processing facilities is time, labour and cost intensive and may result in the diversion of food waste contaminated with PLU stickers to landfills where it will generate methane emissions. In the Government’s consultations, compost facilities identified non-compostable PLU stickers as a common contaminant that negatively impacts compost quality and industry has suggested the government consider application-specific use cases for compostable materials such as produce stickers when developing labeling requirements. The Government further recognizes that the presence of plastic in finished compost, when applied to land, has the potential to contribute to microplastics in the environment. Stakeholders within the produce industry have noted a willingness to transition from non-compostable to compostable PLU stickers.

All plastic Price Look-Up [PLU] produce stickers would be required to be compostable (therefore prohibiting non-compostable plastic produce stickers) but would be exempt from the wording/colouring requirements in the regulation.

5.6 Timelines

The Government of Canada is proposing to phase in labelling requirements to 2030. Phasing in requirements would address a number of priorities identified through consultations with partners and stakeholders, including:

• aligning as closely as possible with the predictable compliance dates of the food labelling coordination policy developed by Health Canada and the Canadian Food Inspection Agency^{Footnote 6} and
• aligning with the adoption, implementation and maturation of EPR programs for packaging across Canada between now and 2030

Labelling rules would be phased in as follows (table 4):

5.7 Technical guidelines

Technical guidelines are developed to explain how regulations operate and describe terms, concepts or other matters to help regulated parties understand their obligations. For example, technical guidelines were developed for the Single-use Plastics Prohibition Regulations for regulated parties.^{Footnote 7}  The Government of Canada will be developing similar technical guidelines for recycled content and labelling rules.

6. Next steps

Partners, stakeholders and the public are invited to provide feedback on anything raised in this document by May 18, 2023. Feedback can be sent via mail or email to

Tracey Spack, Director
Plastics Regulatory Affairs Division
351 Saint-Joseph Blvd
Gatineau QC  K1A 0H3

Email: plastiques-plastics@ec.gc.ca

Following this comment period, draft regulations are targeted for publication in Canada Gazette, Part I before the end of 2023. This would be followed by a further public comment period, during which the Government would consult partners, stakeholders and the public on the draft regulatory text. Final regulations are targeted for publication in Canada Gazette, Part II before the end of 2024.