Provincial inspectors recommend second fine for Coquitlam-based KMS Tools following refusal to comply with recycling regulations

Coquitlam-based KMS Tools may be hit with a second fine from the province for failing to comply with recycling regulations.

The company was issued a $19,000 administrative penalty on March 7, 2023 for the same infraction, and the Ministry of Environment has been issuing warnings dating back to 2021.

The infraction relates to the more than one tonne of flyers, booklets, catalogs, and other packaging and paper products the retailer distributes to its customers every year.

Companies which produce this much paper packaging are required to have a provincially approved Extended Producer Responsibility Plan (ERP) in place, which KMS Tools has refused to do.

Ministry staff previously described the company as “willfully violating” the rules, and displaying no indication it will comply.

KMS Tools appealed its first fine with the Environmental Appeal Board (EAP), but that appeal was dismissed on May 22, 2024.

The company has not disputed that it is breaking the rules, but instead has frequently argued that it is impossible for the company to comply, that it has an “unofficial exemption,” and its direct competitors are not being captured under the regulations.

The EAP responded that KMS Tools has been aware of its non-compliance since 2013, has failed to negotiate in good faith with RecycleBC, and its continued disregard for the rules is undermining the ministry’s overarching regulatory regime.

EAP Board Chair Linda Michaluk said the company has not provided any persuasive arguments.

“Ministry staff repeatedly advised KMS Tools of its obligations under the regulation for some time before initiating the formal action,” Michaluk said. “It is clear to me, and I find, that the appellant was not, and is not, exempt from complying.”

The ministry’s first administrative penalty initially cited the maximum penalty under the Environmental Management Act (EMA), alongside additional penalties for deliberate non-compliance and economic benefits derived from the non-compliance. However, the $38,000 fine was later cut in half by the director of the EMA after the adverse effects of the infraction were re-evaluated, though it was still considered a “major contravention.”

KMS Tools paid the fine in full on July 2, 2024.

On May 27, 2024, ministry staff conducted another office-review inspection of the company, and determined it still does not have an ERP in place; a second fine was recommended on July 30, 2024.