Halifax's revenues from the sale of recycled materials have remained stagnant over the last three years after the city ignored a recommendation to rejig its recycling contract to make more money.

Blue bag items picked up at the curb and commercial recycables dropped off at city facilities are sold as raw materials to be reused. Only 75 per cent of that revenue is kept by the municipality.

Halifax's revenues from selling recycled material have been stagnant over the last three years. (CP)

The rest goes to the Halifax's recycling contractor, Miller Waste Systems Inc., which runs the processing facility in Bayers Lake.

An independent report by Stantec Consulting Ltd., commissioned by Halifax in 2013, recommended the city instead keep all of the revenue. The municipality ignored that advice when it renewed its contract with Miller Waste this summer.

Between March 2012 and February 2015, the city made an average of $1,564,778 a year from selling recycled materials, according to numbers released through freedom of information laws. Over that time, however, annual revenue increased by just $131,000, a CBC analysis shows.

Halifax losing money

Halifax pays Miller Waste a per-tonne fee to run the recycling plant in Bayers Lake. However, those costs are not being covered by sales of recycled material and the municipality is losing more than $1 million a year on its recycling programs.

Miller Waste keeps some of the revenue as an incentive to do a good job, said Matt Keliher, who runs the city's solid waste department.

"They have to have some skin in the game," Keliher said. "Ultimately they have to have a stake in selling in it to make sure Halifax has a better price per tonne."

Halifax sells recycled material to recoup some of its costs processing blue bag items collected curbside and commercial recycling dropped off at its Bayers Lake plant. (CBC News Graphics)

The Stantec report, however, says the per-tonne fee Halifax pays Miller Waste is "in line with the industry."

Keliher says he'd rather stick to the incentive-based model, even though the city-commissioned report recommended against it. The real issue, he said, is linked to market price.

"The aluminum, the paper and plastics end up at a market and generate revenue which helps offset the total costs, but there's still costs at the end of the day," Keliher said. "That's borne by taxpayers."

75/25 split remains

Halifax regional council discussed the Miller Waste contract in-camera and voted unanimously June 23 to renew it without changing the sales structure.

A spokesman from Miller Waste said the contract prevents the company from speaking to the media about its contents. Keliher confirmed the same deal stands.

"We extended the contract up to 2019 and that contract is the 75/25 revenue sharing with the contractor," Keliher said.

The Stantec report recommended that by 2016 the city consider keeping 100 per cent of the recycling sales revenue, which is generally done in Ontario.

Catherine Habermelb, the director of solid waste in Niagara, Ont., says the municipality keeps all revenue from recycled-material sales.

"We've been able to turn a profit for the past few years," Habermelb said.

Ontario also has a partial "extended producer responsibility" program, which means large businesses help pay to recycling materials they create. A version of the producer-pay model is being considered by Nova Scotia's environment department.