Ontario is redirecting approximately C$34 million in surplus funds from the former Ontario Tire Stewardship program to registered producer responsibility organizations as the province responds to widespread used tire collection disruptions and growing stockpiles at dealers and collection sites. The funding decision follows amendments to Ontario’s Tires Regulation that raise the mandatory tire management target from 65% to 80% for 2026 and subsequent years and require the collection network to expand from about 4,300 sites to approximately 6,500 from January 2027. The province says the additional funding is intended to help PROs cover the cost of collecting and processing the extra tire volumes required under the higher target while limiting pressure to increase environmental handling fees charged to consumers. The changes come after months of complaints from tire dealers, municipalities and industry groups that used tires were accumulating because collection services were not keeping pace with generation.

Ontario redirects surplus from former tire stewardship program

On October 1, Environment Minister Todd McCarthy directed Ontario Tire Stewardship to amend its wind-up plan and redirect approximately C$34 million in remaining surplus funds to tire producer responsibility organizations registered with the Resource Productivity and Recovery Authority.

The decision reverses earlier plans to return the surplus to former stewards of the legacy Used Tires Program. Instead, the money will now be used to support implementation of Ontario’s higher tire management requirements.

Funding applies to volumes between 65% and 80% target

The surplus funds will generally be distributed to PROs on a per-tonne basis for tires collected and processed to meet the increase from the previous 65% management target to the new 80% requirement.

The ministry estimates the support could amount to approximately C$500 per tonne, based on historical Ontario Tire Stewardship processing costs adjusted for inflation. OTS may establish a different rate if it determines that another figure better reflects current tire collection and processing costs.

Only collected and processed tires qualify

The funding applies to eligible tires that are collected and processed. Tires managed through reuse or retreading are excluded from the surplus funding mechanism.

PROs will also need to provide documentation confirming that collection and processing services were contracted and completed. Funding will not apply to volumes that would already have been required under the previous 65% target or to quantities exceeding what individual producers need to satisfy the new 80% requirement.

Tire management target rises from 65% to 80%

Ontario amended its Tires Regulation on September 21, raising the tire management target from 65% to 80% for 2026 and every year thereafter. The target is calculated according to the weight of tires supplied into the Ontario market.

The province said the higher requirement is intended to increase the volume of used tires collected and recycled, reduce service interruptions and help eliminate existing backlogs at collection sites.

Collection network to grow to about 6,500 sites

Ontario is also expanding the minimum tire collection network. Beginning January 1, 2027, producers and their PROs will need to maintain approximately 6,500 collection sites, compared with roughly 4,300 under the previous requirements.

The additional approximately 2,200 sites must be distributed across the province, with at least 10% located in northern Ontario. Existing geographic coverage requirements for the current network will remain in place.

New reporting rules aim to stabilize collection network

From 2027, PROs will be required to report their tire collection networks at the beginning of each year. New restrictions will also limit when collection sites can be removed or replaced during the year.

The amended regulation introduces additional requirements for PROs that share collection locations or trade performance credits. Ontario says the changes are intended to improve transparency and provide greater certainty for businesses serving as tire collection sites.

Backlogs developed after target was reduced in 2025

Ontario’s tire collection problems became increasingly visible after the management requirement was reduced from 85% to 65% in January 2025. Tire dealers and municipal collection sites subsequently reported that pickups were becoming less frequent or stopping altogether while consumers continued paying environmental handling fees when purchasing new tires.

Industry representatives warned that the system could remain compliant with the lower regulatory target even as large quantities of end-of-life tires accumulated at individual businesses and storage locations.

Tire dealers reported growing stockpiles across province

During 2026, dealers in several parts of Ontario reported large tire inventories awaiting collection. Some businesses said tires had remained on their properties for months because they were unable to secure regular pickup services.

The Ontario Tire Dealers Association repeatedly called attention to the problem, arguing that collection capacity was not keeping pace with the number of tires entering the end-of-life stream.

Province aims to move existing tire backlog into recycling

By raising the management target and supporting the additional requirement with surplus funding, Ontario is attempting to increase the number of waste tires moving through authorized collection and recycling channels.

The measure is intended to create stronger financial incentives for PROs and processors to manage tire volumes that previously fell outside the reduced 65% obligation.

Implementation speed remains key concern

Industry representatives have broadly welcomed the decision to redirect the OTS surplus but say the key issue is how quickly the additional funding results in more tire pickups and processing capacity on the ground.

Ontario Tire Stewardship and RPRA are expected to consult tire industry stakeholders during October and November 2026 on implementation of the funding mechanism. OTS must submit an amended wind-up plan to RPRA for approval by November 26.

Changes strengthen Ontario tire recycling obligations

The combination of a higher 80% management target, an expanded collection network and approximately C$34 million in transitional funding represents a significant adjustment to Ontario’s producer responsibility system for end-of-life tires.

If the measures translate into higher collection and processing volumes, they could help reduce existing tire stockpiles, improve reliability for dealers and municipalities and direct more material into authorized tire recycling and recovery markets. The effectiveness of the reforms will depend on how rapidly PROs expand service and whether recycling capacity can absorb the additional volumes required under the new target.

Original reporting by The Star.