When does a fee become a tax When the fee revenue collected is used for some other purpose than what it was originally collected. Fees, premiums, levies, surcharges generally boil down to one thing: taxes. This is exactly why alarm bells should be sounding over the government's new proposal for an electronic recycling "fee."

A new fee will be added to the price of computers, monitors, televisions and desktop printers purportedly to cover the cost of recycling these materials. Sounds reasonable enough, except when you consider the performance of similar 'fees' such as the $3 tire levy.

Tire levy revenues flow into what's called the Sustainable Environmental Fund. The Fund is charged with several immeasurable goals like: the protection of air, land and water and environmental renewal as well as the education and encouragement of activities to prevent pollution. An audit of the Fund in 2001 found accountability and transparency were lacking with respect to revenues and expenditures. Bottom line: tire levies, waste management permits, scrap tire and battery recycling programs operate more like a general revenue tax than a dedicated fee.

However, the government is maintaining that its new policy of "Extended Producer Responsibility (EPR)" will ensure fees are used for their intended purpose and because they are not collected by the government they cannot be labeled a tax. Interesting logic but the reality it's up to the government to give the authority for the "producers or retailers" to collect such a fee.

Beyond, the semantics of taxes and fees is a more disturbing element, whether or not the purposed mode has any chance of achieving its goal: to reduce hazardous electronic waste from being dumped off at local landfills.

The impetus behind the electronic recycling tax is to shift the burden for recycling electronic waste from municipal taxpayers to users and producers of electronic goods. Theoretically this makes good sense and is something the Canadian Taxpayers Federation would support. But, as always, the devil is in the details. The program must be structured to encourage consumers to participate and provide clearly defined performance-based results.

The proposed electronic recycling fee, or eco-fee, will likely be in the range of $5 to $45 depending on the product, and will be collected at the time of purchase. Collecting a fee at the time of purchase does not create any incentive for compliance at the time of disposal. What's the incentive to return your television or printer five or ten years after purchase Certainly, we'd all like to think that consumers would take the time to find the proper recycling depot when they are done with an electronic product but clearly that isn't happening. If it was such a fee wouldn't be needed in the first place.

A more successful and proven model is a deposit system, similar to the beverage container recycling initiative. How many times have you seen bottle collectors rummaging through the trash Ever consider why When bottles are returned for recycling, the deposit is returned as well, these individuals are collecting deposit money while at the same time helping to clean up the environment. It is a win-win for everyone.

One other issue the government needs to consider before pushing this fee onto consumers: some electronic recycling is profitable. Instead of pushing these entrepreneurs out of business, perhaps they should be looking to expand recycling business opportunities.

If you are considering a new television or printer, you best do it before 2007, when this new electronic tax comes into place. Perhaps, the government will come to its senses before then and enact a program that is based on success and actually encourages consumers to comply; otherwise, it's just one more tax grab!