Canada's largest coffee chains are misleading customers about what happens to cups collected in their in-store recycling bins.

A CBC Marketplace investigation reveals that many paper cups collected by some Toronto Starbucks and Tim Hortons for recycling are sent to landfill, not to a recycling plant as many may believe.

"It's pretty shocking," Conrad MacKerron, senior vice-president of As You Sow, which works to promote corporate environmental and social responsibility, told Marketplace's Erica Johnson.

Coffee is the most popular drink in Canada. According to Agriculture and Agri-Food Canada, Canadians drink 14 billion cups of coffee every year. In 2010, Canadians used an estimated 1.5 billion disposable coffee cups. (CBC) "It's an enormous waste of materials and the value of those materials."

In 2010, Canadians used an estimated 1.5 billion disposable coffee cups, equivalent to more than half a million trees.

Both Starbucks and Tim Hortons have faced criticism for the amount of waste created by disposable cups. As a way to address these concerns, both companies have publicly made commitments to environmental responsibility, including in-store recycling bins for paper cups, and offering ceramic mugs to people who don't need a take-out cup.

"Starbucks is committed to significantly reducing the waste our stores generate — especially when it comes to recycling," the company's website says.

"Tim Hortons understands that changes in the environment need to be managed and embraces our responsibility to do our part," the company's Sustainability and Responsibility Report says. "As we strive to reduce the waste created in every part of our business, one of the most important areas of action is tackling the waste generated at our restaurants."

The Marketplace investigation airs Friday, October 30 at 8 p.m. (8:30 p.m. in Newfoundland and Labrador) on TV and online.

Follow the cups

To test what really happens to recycling materials collected by stores, Marketplace dropped cups with tracking devices into store recycling bins at 14 Tim Hortons stores and 14 Starbucks locations in Toronto. Producers from the program returned at night to look for them.

Marketplace put tracking devices in coffee cups and dropped them in recycling bins in Starbucks and Tim Hortons locations in Toronto to see where the cups end up. (CBC) Marketplace staff recovered seven cups from each chain, all of which were in bins for garbage pickup, alongside many other recyclable materials. The other cups could not be located.

"It certainly casts some doubt on the integrity of the whole process," says MacKerron.

"To find out that in some areas at least the bins are out there but they (the cups) are going right into the garbage, that's outrageous."

Marketplace staff also went in to 10 locations of each chain to see if employees offered a ceramic mug instead of a takeout cup. Both Starbucks and Tim Hortons say they offer the mugs as part of their commitment to reduce waste.

None of the stores made any effort to offer a non-disposable mug.

Cups difficult to recycle

Coffee is the most popular drink in Canada. According to Agriculture and Agri-Food Canada, Canadians drink 14 billion cups of coffee every year, and the country is second only to Italy in the percentage of cups we buy outside the home.

All of the cups recovered by Marketplace staff were heading to landfill, not to recycling plants. (CBC) While many people think that paper coffee cups are recyclable, most facilities do not accept them because of their inner plastic lining.

"There is extra cost in processing most types of hot drink coffee cups, teacups, because they're a combination of paper and plastic," says Mark Badger, an executive at Canada Fibers, which specializes in waste management and recycling. Badger says that part of the additional cost is due to the fact that plastic-lined cups have to be separated from regular paper.

Starbucks and Tim Hortons say they have recycling contracts with private facilities to handle the cups.

“Unfortunately today, in most places, hot beverage cups, coffee, tea, hot chocolate cups, do end up going to landfills,” says Mark Badger, an executive at Canada Fibers, which specializes in waste management and recycling. (CBC) While some municipalities, such as Vancouver, accept the cups in their residential blue bin programs, most do not. In Toronto, for example, 40 per cent of the paper cups we use get tossed into blue bins for recycling, but they're simply diverted to landfill.

"Unfortunately today, in most places, hot beverage cups, coffee, tea, hot chocolate cups, do end up going to landfills," says Badger.

Not all Starbucks and Tim Hortons stores offer in-store recycling, but an increasing number have implemented programs. Starbucks has recycling bins at 47 per cent of company-operated stores in the U.S. and Canada, according to its 2014 Global Responsibility Report. Tim Hortons offers recycling at 25 per cent of locations, according to the company's 2014 Sustainability and Responsibility Report.

Companies respond

Both Starbucks and Tim Hortons declined to speak with Marketplace on camera about the investigation, but Starbucks said it would review its in-store recycling programs across the country.

In an email statement, Starbucks wrote: "We commit to recycling all materials identified on our recycling bins and we committed to review recycling actions in stores that offer front-of-store recycling to ensure this is the case."

Tim Hortons did not address the results of the Marketplace investigation, but wrote: "We remain committed to offering tools to assist restaurant owners in consistently implementing the various commercial recycling and waste diversion programs available."

(This story is based on a Marketplace investigation by Tiffany Foxcroft, Tyana Grundig, Philippe de Montigny and Jaclyn McRae.)