It's official: Vancouver approves killing single-use cup fee this spring

It's official: Vancouver City Council approves killing single-use cup fee this spring

Example of a Starbucks single-use cup. (Kenneth Chan/Daily Hive)

As expected, Vancouver City Council has approved a member motion to repeal the controversial mandatory $0.25 single-use cup fee that has been in place for over 13 months.

The decision was made in a public meeting Wednesday, with City Council voting 6-3 on the motion’s key directions to end the policy. Those who voted in favour were the ABC Vancouver majority, while those against were OneCity councillor Christine Boyle, and Green councillors Adriane Carr and Pete Fry.

ABC councillor Lisa Dominato was absent from the decision, while Mayor Ken Sim recused himself due to a conflict of interest, as he is the owner of Rosemary Rocksalt Bagels.

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Sim first announced ABC’s intention to repeal the policy on January 24 during his first annual address to the Greater Vancouver Board of Trade. Subsequently, a member motion by ABC councillor Rebecca Bligh to put this direction into action was made public last week, ahead of today’s meeting.

“I will always have a reusable cup on me, that is the irony of me moving on all of this. It is about consumer choice. People are resigned to the fact that they pay a fee now for convenience, and that’s not something I want to be a part of as a government. It is that red tape that we hear so often — making life harder, and making businesses harder to get by in the day-to-day,” said Bligh during the meeting.

“Vancouver all on its own, in a massive country, is thinking it’s winning the climate war because it has a 25-cent cup fee? It’s insanity. It’s actually insanity.”

With the approval of this motion, City staff will amend policies to enable the end of the mandatory $0.25 fee charged on every single-use cup given out by businesses by no later than June 1, 2023.

This fee first went into effect on January 1, 2022, and within weeks it had to undergo major amendments due to an oversight on how it impacts people who are homeless and other low-income people who use free drink vouchers. Bligh notes that despite those earlier changes, the fee continues to have an added cost on lower-income people.

“This was flawed from the beginning, and it’s why I moved a motion almost a year ago to repeal it,” said Bligh, referring to her failed attempt to kill the fee in March 2022 under the previous City Council.

“It was a bad idea at that time, and it was quite ineffective from the outset.”

Today’s approved motion also directs City staff to return to City Council before the end of this year with a report outlining recommendations on alternative policies that are more effective in changing behaviours.

Earlier in the meeting, some public speakers who are involved in reusable cup programs made comments against the repeal, suggesting that such a move would be a setback to such programs that could be adopted by large chain-based businesses, and that other cities in the country were looking to Vancouver for results. Bligh then, in response, suggested that innovations in reusable cups and other greener alternatives are not contingent on maintaining the fee.

In his remarks, ABC councillor Lenny Zhou provided an anecdotal example to support his party’s motion for a repeal. He says last week, on a weekday morning, he went to a “major franchise coffee shop” in East Vancouver — at a location next to a SkyTrain station, private college, and major offices — to observe customer behaviour. Over the span of an hour from 8:15 am to 9:15 am, over a one-hour period, he recorded 107 drinks sold to 97 customers — none used reusable cups.

“It’s a small data sample size, but that really aligns with what we’ve heard from the public and industry. You can argue it’s too early to see the changes, but from an outcome and performance perspective, it doesn’t change consumer behaviour at all,” said Zhou.

“You could also argue Vancouver should set an example, but Vancouver implemented this [more than a year ago] and no other city has followed.”

Representatives of three organizations who advocate for the industry and the interests of their members — tens of thousands of retail and restaurant businesses across Canada, including thousands of businesses within Metro Vancouver — also spoke to City Council in favour of the repeal.

Food and beverage businesses stand to gain more revenue from keeping the added $0.25 fee on each single-use cup, but they asserted that based on what they have heard from their members, it is an operational nightmare and not worth the hassle.

“When we’ve been having chats with our members, the 25-cent fee is nowhere near as important to be able to offer the best possible value to consumers, even though they’re collecting that 25 cents. In fact, it’s a reputational risk because they’re the ones the consumer is saying we’re gouging this fee by charging this fee, of course not realizing it’s mandatory and not a tax,” said Mark Von Schellwitz, the vice president overseeing Western Canada for Restaurants Canada.

“We’ll easily forget the 25 cents in order to not have the regulatory burden, and in order to not have that pushback from consumers.”

The municipal government estimates over 82 million single-use cups were thrown into the garbage in Vancouver in 2018, and this contributes to the $2.5 million annual operating cost of collecting single-use items from City-operated public garbage bins and the pick-up of litter from streets and public spaces.

Based on 2018’s single-use cup volumes, businesses across Vancouver could be collecting at least over $20 million in revenue on an annual basis — and this figure does not include single-use cups that are disposed of in other ways, such as in the garbage of homes and businesses.

Von Schellwitz notes that for many types of sales, single-use items are the only option. For a full-service restaurant, takeout and delivery orders now account for 37% of their sales, compared to under 10% pre-pandemic.

Von Schellwitz emphasized that frontline workers continue to field the brunt of complaints from customers, which adds pressure to businesses at a time when they are trying to attract and retain employees. This was one of the primary concerns expressed by all three industry-based organizations that represent businesses.

For small businesses, he says, they do not have the resources and capacity to participate in reusable share pilot projects, for reasons such as a lack of dishwashing facilities and storage space.

Extensive time and resources are required to follow the City of Vancouver’s reporting requirements to track the number of single-use cups distributed, which he says is particularly challenging for small businesses.

For larger businesses with locations in multiple or many municipalities, Von Schellwitz said it does not make sense to change their operating procedures in just one municipality.

“Many members with locations in other municipalities continue to express concerns about the patchwork of municipal single-use item bylaws, and would like to see these harmonized at the federal and provincial levels, where initiatives to reuse plastics and single-use item waste are already well underway,” said Von Schellwitz.

“Most customers also view this as an unnecessary tax that will have little impact on their purchasing decisions, other than purchasing [drinks using] to-go cups outside Vancouver while commuting into the city.”

Jairo Yunis, an economist with the Canadian Federation of Independent Business, told City Council the fee “discourages consumer spending, leading to a potential decline in sales and further financial strain” — adding to the fiscal realities of inflationary pressures, slower economic activity, upward pressure on wages from the labour shortage, higher taxes, and rising interest rates.

Greg Wilson, the director of government relations for the Retail Council of Canada, said “practical concerns matter,” in that some plastics are easier to eliminate than others, and there is already a real effort to eliminate problematic plastics.

“Most retailers have not experienced a drop in the number of single-use cups distributed since the fee was introduced. The fee does not drive cup share, [but] avoidance of the reporting requirement is what drives cup share,” added Wilson.

The ABC majority also rejected several proposed amendments made by Green councillor Pete Fry, including delaying the repeal to no earlier than September 2023, when City staff are expected to return with a detailed report on their findings of the effectiveness of the fee.

ABC councillors particularly voiced their opposition to Fry’s proposed amendment to add another layer of requirements for businesses relating to single-use cups. The amendment would have directed City staff to require businesses to “itemize and identify the cost of single-use beverage cup(s) distributed to a customer, and to provide a discount to customers who bring their own cup(s).”

In response, ABC councillor Sarah Kirby-Yung called this a “slippery slope” that is “beyond our jurisdiction.”

“We are digging out as a city from overly complex and burdensome regulations, whether it is on housing, small business, or competing policies. We get presentations from staff that have visuals of how complex our regulations are, and how much our bylaws have grown over the years. We’re making it so difficult for folks to do business in this city,” she said.

ABC councillor Brian Montague said: “Businesses are trying to avoid the bureaucracy the City is trying to impose on them… where does it stop? Where does common sense begin? When does government get out of the way? Yeah, I can’t support this.”

Bigh added: “If anybody has ever actually run a business, they would know this is way, way offside.”

It should be noted that the City’s jurisdictional powers do not allow it to collect the fee as a revenue-generating tax for the municipal government, nor can they force businesses to use the revenue they collect in very specific ways, such as solely for green initiatives.

“The cup fee is a very imperfect tool because we have very limited tools a a local government. If we had more tools, we could bring in better options. Doing nothing is not a good alternative either,” said OneCity councillor Christine Boyle.

“We have 82 million cups, and this is something taxpayers are paying for right now in the waste they are littering in the streets. It’s a problem we need to solve.”

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