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Paint recycling firm morphs from David to Goliath

A worker seals a steel drum containing old cans of paint at the household hazardous waste depot at the Commissioners Street transfer station in Toronto .

Chris Young/chris young The Globe and Mail

An upstart St. Catharines waste-management firm is poised to take over most of Ontario's household paint recycling business amid criticism of perceived heavy-handed market intervention by Stewardship Ontario, the body charged with overseeing recycling programs in the province.

Photech Environmental Solutions said it isn't fazed by a controversial new pricing plan introduced by Stewardship Ontario on Jan. 1.

The change has already prompted the largest paint recycler in the province, Hotz Environmental, to announce it will no longer truck away or process municipal paint waste, saying the changes imposed by Stewardship Ontario would result in "substantial" financial losses.

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"Stewardship Ontario asked us if, in case of a service interruption, we'd be willing and able to pick up the slack," said Shawn Barlow, Photech's chief executive officer. "We believe we can."

Stewardship Ontario is a not-for-profit organization funded by sellers of recyclable products and charged with running the province's household recycling programs.

Photech, Hamilton-based Hotz and Société Laurentide of Shawinigan, Que. are the only three paint recyclers approved by Stewardship Ontario. Laurentide has said it doesn't need more used paint from Ontario.

Photech, which spent the last two years developing its paint recycling capabilities, handled 670,000 kilograms of waste in 2010, including paint, bulbs and batteries, and processed less than one million litres of paint last year. (By comparison, a total of more than 11 million kilograms of used paint waste were collected across Ontario in 2010.) The company has the capacity to house up to 308,000 litres of waste, compared to 1.17 million litres for Hotz, according to documents filed with the Ministry of the Environment.

"It's just a matter of scaling up," Mr. Barlow said. "We're quite confident it won't be an issue. We just need some time to ramp up" – about 30 to 60 days.

But industry observers question whether Photech is prepared to go from bit player to industry giant overnight. "Certainly this would be at a different scale than [Photech has]been operating at in the past," said Ken Brothers, commissioner of public works with Niagara Region, who added he is so far assured by what he has heard from Photech. "Our concern is, can we get the material out and can it be processed? Stewardship Ontario is responsible and accountable for this."

Stewardship Ontario spokeswoman Rula Sharkawi said in an e-mail "we are confident … that there will be capacity to meet demands when volumes peak in the summer."

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However, Michael Scott, CEO of Stewardship Ontario's overseer, the provincially mandated Waste Diversion Ontario, said he is "in the process of submitting a series of questions to Stewardship Ontario" to provide its analysis of paint recycling capacity at peak season.

According to a profile of Photech in the last Stewardship Ontario annual report, the 15-year-old company "was historically a minor participant" in the household waste business, but is "a natural fit" to help increase the volume of waste diverted from landfills. After Hotz said it would leave the business last week, a Stewardship Ontario official e-mailed industry participants, encouraging them to "please work with Photech."

The other issue is what happens with the paint once it is recycled. Hotz sells most its recycled paint overseas, and Laurentide sells through Canadian retailers including Rona. The main reason Laurentide doesn't need more paint from Ontario is that it tries not to take in more used paint than it can sell later in its recycled form, said Laurentide president André Buisson.

Photech says it has been developing a product for the retail market called Loop, but has given most of its output away so far, Mr. Barlow acknowledged. "For the most part we haven't gone to market in a big way." However, he said he's reached a deal with an unidentified big-box retailer that will sell Loop across Canada "in a couple of months. It's a new market so everything will be a little dependent on how well it's accepted. Only time will tell how much it sells."

With a report from Kim Mackrael

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About the Author

Sean Silcoff joined The Globe and Mail in January, 2012, following an 18-year-career in journalism and communications. He previously worked as a columnist and Montreal correspondent for the National Post and as a staff writer at Canadian Business Magazine, where he was project co-ordinator of the magazine's inaugural Rich 100 list. More

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