Overview
Waste Management of Canada Corporation and its subsidiaries including WM Québec Inc. (collectively, “Waste Management of Canada”) are subsidiaries of Waste Management, Inc. (“Waste Management”). Waste Management of Canada is committed to providing customers with safe and reliable quality waste services at a reasonable price.
Price Increases
General
We periodically increase our service rates. Price increases are subject to a customer’s applicable service terms, including any applicable municipal or franchise agreement or customer service agreement. Notifications for rate increases are typically provided the month of, or the month prior to, the increase and can be found in the “Important Messages” section on a customer’s invoice. Increases to service rates may be based on any number of factors, including to cover increases to both internal and third party disposal, processing and/or transportation costs, increased costs due to uncontrollable circumstances, including, without limitation, changes in local, state or federal laws or regulations, imposition of taxes, fees or surcharges or acts of God such as floods, fires, pandemics, hurricanes and natural disasters, and increases in the Consumer Price Index (CPI). Standard CPI rate increases are tied to increases to the Canadian Property Taxes and Other Special Charges Consumer Price Index (rolling 12-month average) published by Statistics Canada. We may also apply different CPI based price increases, including a contractually allowed CPI+4% price increase for certain customers, or seek price increases for other reasons and/or to achieve acceptable operating margins.
Franchise/Municipal Customers
Residential, commercial and roll-off container customers serviced pursuant to a franchise agreement with a municipality or local governmental authority are subject to price increases permitted under the terms of such agreements.
Open Market/Subscription Residential Customers
Generally, open market residential subscription collection customers are serviced on a prepaid quarter by quarter (or other periodic) basis, without individual service agreements. Therefore, Waste Management of Canada can increase the price or cost to provide such residential collection service from billing period to billing period, and customers may terminate or choose to not renew services after each billing period. Residential subscription customers are billed in advance and invoices represent our offer to provide or continue to provide such services for the specified billing period. By paying the invoice and not cancelling service, the customer is agreeing to continue the service for the billing period and there is no proration or partial refund for any cancellation prior to the end of the billing period.
Non-franchise Commercial/Roll-off
Waste Management of Canada provides non-franchise commercial small container and permanent (i.e., recurring service) roll-off container service to customers under fixed term contracts with renewal options. Under Section 4(b) of our current standard service agreement for commercial small container and roll-off customers (“standard commercial/roll-off service agreement”), we have the right to increase a customer’s service rate and charges for any one or more of the following reasons:
- for any changes to, or differences between, the actual equipment and services provided by Waste Management of Canada to the customer and those specified on the Service Summary to the customer’s service agreement;
- for any change in the composition of the “Waste Materials” (as defined in the service agreement) or if the average weight per yard of the customer's Waste Materials exceeds the amount specified on the customer’s Service Summary;
- for any increase in or other modification to our FuelEnergy Surcharge, including additions or modifications to the fuel types used in its calculation, Regulatory Cost Recovery Charge, Recyclable Material Offset, Environmental Charge, and/or any Fees/Charges included on the customer’s Service Summary;
- to cover any increases in disposal, processing and/or transportation costs, including fuel surcharges;
- to cover increased costs due to uncontrollable circumstances, including, without limitation, changes in local, provincial or federal laws or regulations, imposition of taxes, fees or surcharges or acts of God such as floods, fires, pandemics, hurricanes and natural disasters; and/or
- for increases in any Consumer Price Index (generally the Canadian Property Taxes and Other Special Charges Consumer Price Index published by Statistics Canada).
The price increases specified in Section 4(b)(i) through (vi) may be applied singularly or cumulatively, and may include an amount for operating or profit margin. Price increases are not represented to be solely an offset or pass through of the company’s costs.
In addition to specific price increases allowed under Section 4(b), Waste Management of Canada also regularly seek price increases subject to customer consent pursuant to Section 4(c) of our standard commercial/roll-off service agreement. Waste Management of Canada notifies such customers of these price increases subject to customer consent, through invoice messaging, invoice inserts or separately mailed price increase notifications. Under Section 4(c) of such service agreement, the customer can either accept the price increase or trigger a termination of its service agreement, without any obligation to pay liquidated damages. Under Section 4(a) of our standard commercial/roll-off service agreement, payment of the price increase is deemed to be a customer’s consent to the consensual price increase.
Pricing, price increases and the assessment of charges, whether pursuant to Section 4 of our standard commercial/roll-off service agreement or subject to other applicable service terms or customer consent, are not applied uniformly and vary from customer to customer. By contract or at the company’s discretion, some customers are exempt from base rate or CPI based price increases or do not pay Waste Management’s standard or common charges, such as our Energy SurchargeFuel and Environmental Charges. Section 4 price increases and charges are designed to recover all applicable costs as to all customers from only those customers subject to the price increase or charge, excluding any exempt or non-paying customers.
Check Your Applicable Service Terms
The service terms referenced above may apply to you, or your service terms may be different. Not all collection customers have service agreements and not all commercial and roll-off customers are covered by our standard commercial/roll-off service agreement. Your services may be covered by prior versions of our standard commercial/roll-off service agreement, which have different terms. If you have a service agreement, please check it for your applicable terms.
Energy Surcharge
Waste Management of Canada is expanding its commitment to use sustainable technologies in the services we provide, such as the deployment of trucks fueled by compressed natural gas (CNG) for much of our collection fleet that reduce our overall impact on the environment. Although we continue to transition to alternative energy sources to meet our sustainability goals, changing diesel and CNG fuel prices are something we cannot control. As a result, Waste Management on an enterprise-wide basis through all its hauling and operating companies, including Waste Management of Canada (collectively, "WM operating companies") has implemented an Energy Surcharge that allows our collection and disposal companies to recover the cost of diesel, CNG, and other hydrocarbon-based fuels and products that we use in our business on an enterprise-wide basis above a baseline cost of $0.34 CAD per litre for diesel, and $0.14 per diesel litre equivalent for CNG1. The Energy Surcharge allows the WM operating companies to keep up with the changing costs of fuel and other hydrocarbon-based products, and to achieve an acceptable operating margin.
The Energy Surcharge replaces the Fuel Surcharge for our collection and disposal services. Prior to April 2023, Waste Management’s former ‘Fuel Surcharge’ was based on the reported price of diesel fuel only. Information on our previous Fuel Surcharge can be found here. With the continuing growth of our CNG fleet, starting with customer invoices for collection and disposal services generated in April 2023 the WM operating companies replaced the Fuel Surcharge with our new Energy Surcharge which is based on the reported prices of both diesel fuel and natural gas.
Waste Management's standard Energy Surcharge is tied directly to two nationally recognized price indices: (i) the Canadian National average price for diesel as reported by Bloomberg, a leading global provider of data, news, and analytics; and (ii) the Henry Hub Natural Gas Spot Price. These indices are objective, publicly available, and widely recognized across industries that utilize diesel and natural gas, including trucking and transportation. Linking our program to these indices ensures customers are assessed an Energy Surcharge that utilizes objective pricing data that is updated regularly.
Our Energy Surcharge is a weighted calculation that uses a ratio based upon the volume of diesel fuel and CNG consumed enterprise-wide by the WM operating companies and their subcontractors. For each fuel type, WM’s baseline cost ($0.34/litre diesel and $0.14/DLE for CNG respectively) is deducted from the reported index price for that fuel2. In addition to the index-driven prices less baseline costs and fuel weighting, the Energy Surcharge includes diesel and CNG factors determined by Waste Management. The resulting Energy Surcharge value is reflected as a percentage of a customer’s monthly or periodic invoice charges, before taxes. The Energy Surcharge formula can be depicted as follows:
(Diesel Market Index Price – Diesel Baseline) x Diesel Factor x Diesel Weight %
+
(CNG Market Index Price – CNG Baseline) x CNG Factor x CNG Weight %
The Energy Surcharge for Canadian customers was updated monthly until September 2023 when WM began to update the calculation weekly, using the most recently available Canadian National price for diesel reported by Bloomberg and the Henry Hub spot price for natural gas. For ease of reference, we publish tables showing historical values for our Energy Surcharge. Waste Management periodically will update its Energy Surcharge calculation, including by making adjustments to the diesel and CNG weighting to reflect changes in enterprise-wide fuel usage, the diesel and CNG factors, and the other variable components included in the formula.
The Energy Surcharge is applied to all monthly or periodic invoice charges before taxes. The amount or percentage of the Energy Surcharge is not specifically tied to the direct or indirect costs to service a specific collection or disposal customer account. By contract or at a WM operating company’s discretion, some customers pay a nonstandard energy surcharge, or are exempt from any fuel or energy surcharge, which does not change the aggregate Energy Surcharge charged to all other customers.
WM Recycling Services applies a separate Fuel Surcharge and Environmental Charge to its recyclable material processing customers, and so Waste Management's Energy Surcharge will not be applied to those customers. Those charges are applied on a per-ton basis on the volume of recyclable materials delivered by a customer to a WM Recycling Services processing facility. Information on the Fuel Surcharge and Environmental Charge for WM Recycling Services customers can be found here.
Not a Governmental Tax; Future Changes
The Fuel/Environmental Charge is not a tax or surcharge imposed by or remitted to any governmental or regulatory agency; it is our charge. The Fuel Surcharge calculation or Environmental Charge percentage may be changed in the future at the company’s discretion. Any such changes shall be subject to an existing customer’s applicable service terms.
1CNG volume ordinarily is measured in BTUs instead of litres. The term “diesel litre equivalent” or “DLE” means the volume of natural gas needed to produce the same amount of energy as one litre of diesel fuel.
2For the CNG component of the calculation, the Henry Hub Natural Gas Spot Price is converted to DLE and then adjusted to include gas transmission costs and federal/state and local excise taxes on natural gas, before the CNG Baseline cost per DLE is deducted.
