Metro Vancouver stuck paying Cache Creek landfill royalties
It now costs Metro Vancouver more to use the Cache Creek regional landfill because the dump's owner is paying royalties to local First Nations and passing along the cost.
Belkorp Environmental, the parent firm of landfill operator Wastech, agreed more than three years ago to pay the Ashcroft and Bonaparte Indian bands a royalty on each tonne of garbage dumped at Cache Creek, in order to secure the bands' support for Belkorp's planned expansion of the landfill.
Metro challenged Wastech's decision to pass along the royalty costs, arguing the regional district never agreed to the fees and they shouldn't be counted as part of landfill's operating costs.
An arbitrator ruled in favour of Wastech in November and upheld the payments.
Metro won't disclose exactly how much taxpayers' money now flows to the two bands via the landfill owners, citing confidentiality of the arbitration process.
But when the province approved an initial extension of the landfill in early 2010, the environment ministry said royalties to local communities would be worth $1 million a year.
Surrey Coun. Marvin Hunt said the royalties might mean at most a one or two per cent increase in Metro's landfilling costs, but adds he thinks "a re-evaluation of the whole deal" with Wastech is justified.
"That was never part of an agreement we made with Wastech," Hunt said. "This was a deal Wastech cut on their own behalf to do a future proposal of a future expansion of the Cache Creek landfill. It should come out of their money, not our money."
Richmond Mayor and Metro zero waste committee chair Malcolm Brodie said he was also "surprised and disappointed" by the arbitrator's decision, but noted it is final.
"I find it alarming that a company not a party to the contract with Metro Vancouver can negotiate a royalty and pass along that royalty to Wastech and then to Metro Vancouver."
Brodie said the issue highlights the need for Metro Vancouver to own and control its own waste-disposal facilities, noting such a problem wouldn't arise at the Metro-owned garbage incinerator in Burnaby.
The region intends to build a new waste-to-energy plant over the next several years to end its use of the Cache Creek landfill and most directors so far support regional district ownership of the new plant, not a P3 model where a private firm owns it.
Metro can absorb the extra royalty costs, Brodie said, because the region is running a surplus in its $105-million budget for solid waste management.
Belkorp didn't secure unanimous backing from aboriginal leaders – the Nlaka'pamux Nation Tribal Council continues to oppose expansion of the landfill and did not agree to take royalties.
Wastech officials could not be reached for comment.