Why Hamilton's 2 blue box system is behind a $21M lawsuit

The company that handles Hamilton's blue box material is suing the city for $21 million, saying the local system of each household having two separate blue boxes hasn't saved it work.

Canada Fibers is suing for $20 million for breach of contract and $1 million in punitive damages. It says the city has been stubborn in renegotiating a processing fee, among other issues.

Hamilton has a "dual stream" blue box system one box for fibers, one box for containers. That should make sorting easier at the Canada FibersBurlington Street East plant, so the companyaccepts a lower processing fee, says a statement of claim filed in Hamilton court last month.

But the amount of contaminants in local blue boxes is on the rise, the claim says. Canada Fibers workers are doing a single-stream level of sorting now,but the city won't budge on its sorting fee.

"CFL is increasingly being asked to process single stream recyclables at a dual stream facility," says the claim, none of which has been tested in court.

Meanwhile, it says, the city has "bragged about the low processing fees that it pays."

The claim spells out other issues with a 2012 contract the two sides have been trying to renegotiate.

The city hasn't upgraded its sorting equipment in "an extremely long time," Canada Fibers alleges. It also hired a new curbside collector in 2013. That coincided with an increase in non-recyclable material coming into the facility, the company says.

The level of non-recyclable material in local blue box loads, the claim says, has increased 59.71 per cent since 2011. Medical waste and hazardous material are also on the rise.

All of this is made worse by China reducing the amount of recycled material it buys. City staff said earlier this year those new standards will cost the city about $300,000.

The lawsuit isn't the city's only garbage-related struggle right now.

The city has temporarily shuttered a composting facilityafter it emitted a stench that disrupted the neighbourhood. That resulted in 5,700 tonnes of green bin waste going to landfill in just two months. Now there's a temporary ban on residents putting yard waste in green bins. People can still put out yard waste in paper bags.

CBCNews is pursuing comment from the city.

Scott Hutchison of the Toronto-based firm Henein HutchisonLLP is representing Canada Fibers. The company handles about 60 per cent of Ontario's blue box material.

Earlier this week, city councillorsdebated in private session whether to keep doing business with Canada Fibers. Hutchisonsaid that "raises concerns."

"CFLhas had an excellent working relationship with the city going back to 2002," he told city council's audit, finance and administration committee Monday.

"There is no breakdown in the relationship."