2023-12-20 07:09:06
The City of Montreal will sue one of its recyclers for nearly 4 million, because it suspects him of having diverted profits from the resale of the contents of the metropolis’s blue bins, we have learned The Press.
Published at 2:09 a.m. Updated at 5:00 a.m.
The Ricova company sells its bales of recyclable materials at a discount to a sister company, Ricova International, with the consequence of depriving the City of its share of profits provided for by municipal contracts, according to Montreal.
“The City estimates that this price difference represents a shortfall in its favor of at least $3,702,777,” officials estimated in a municipal document obtained by The Press. This document recommends filing a civil lawsuit.
Ricova began operating Montreal’s two sorting centers in 2020. She was fired from the Lachine center last year, but continues to operate the Saint-Michel center.
The contract between Montreal and its sorters provides for a floor price for the bundle of recyclable materials below which the City must share the losses and a ceiling price above which it will receive profits. After sharing the losses for years while the value of recyclable materials was very low, Montreal would not be entitled to its share of the profits.
The City notes that the gap between Ricova’s selling price and the average price of other sorting centers in Quebec has widened. The actual selling price of recyclable materials has been systematically reduced by $20 [la tonne].
Excerpt from the document written by municipal officials
Ricova did not respond to a call and email from The Press, mardi.
Mayor Valérie Plante’s office did not want to comment on the situation.
A damning report
The City has a powerful weapon to convince the courts: the Office of the Inspector General of Montreal (BIG) has already concluded that Ricova had carried out “deceitful maneuvers” to keep recycling profits.
“The investigation reveals that this price declared by Services Ricova inc. is systematically lower than that which Ricova International inc. actually obtains materials from buyers,” says the report, published in March 2022.
The owner of Ricova, Dominic Colubriale, allegedly admitted to OIG investigators that a ton of recyclable materials sold for $100 to his company Ricova International could then be resold for $200 on the market. However, it is the price of $100 per ton that is declared to the City, according to the OIG. The municipal administration would not have had access to real sales figures on the commercial market.
PHOTO ROBERT SKINNER, LA PRESSE ARCHIVES
Dominic Colubriale, owner of Ricova
Ricova was then placed on the City of Montreal’s blacklist, without however its current sorting and picking contracts being affected.
Mr. Colubriale, for his part, rejected the OIG’s version of the facts.
“The reality is that Ricova International buys recyclable materials from Montreal sorting centers at prices generally higher than the monthly average calculated by Recyc-Québec. There is no fraudulent maneuver there,” he assured.
The company says it has generated profits for the City of Montreal of nearly $5 million since the start of operations in 2020.
A stormy relationship
The relationship between Montreal and Ricova has been stormy for a long time.
The company burst into the municipal landscape in 2020 by purchasing assets in the bankruptcy of Rebuts solids canadiennes (RSC), the sorter for the City of Montreal. The municipality recommended awarding the sorting contracts to a non-profit organization, but had to come to terms with the idea of collaborating with Ricova.
However, the situation quickly deteriorated. Ricova never managed to achieve the expected performance at the brand new Lachine sorting center, from which bales of paper containing far too much plastic came out. Then, Radio-Canada revealed that these bundles were ending up in industrial regions of India, where this plastic would be illegally used as extremely polluting fuel by industrialists and entrepreneurs.
In the wake of this report, Canada’s borders would have completely closed to Ricova, since the export of waste is largely prohibited by international law.
In September 2022, unable to sell its bales of recyclable materials, Ricova threatened to close the reception areas of its sorting centers, at the risk of leading to the interruption of green bin collection in Montreal.
Ricova was ultimately fired from the Lachine sorting center the following month.
The company still operates the Saint-Michel sorting center, which is scheduled to close permanently next year.
“Ricova is able to successfully process the recyclable materials received at the Saint-Michel facilities for as long as the City of Montreal needs them,” the company affirmed in an email to The Press, last October. “We have invested over $6 million in private money (without grants) to improve the equipment that is there and owned by us. »
With Vincent Larouche, The Press
The story so far
Summer 2020
Ricova, previously specialized in the export of recyclable materials, is starting to sort Montrealers’ green bins.
Mars 2022
The Office of the Inspector General of Montreal concludes that Ricova avoids sharing with the City the profits it makes on the resale of recycling thanks to an internal scheme.
December 2023
Montreal is preparing to launch a civil suit to recover nearly 4 million owed to it.
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