Ontario moves to a more circular economy (but how does it work?)

As of January 1st this year, the collection of recycling in Ontario (the Blue Box Program) devolves from municipalities - Toronto in my case - to a not-for-profit organization called Circular Materials. In theory, this is a step towards a more circular, less wasteful, economy, but I am reserving judgement until I see how it works in practice.

The idea, so we are told, is not so much to outsource and privatize yet more city services, but to move to a model where the producers of all the packaging that gets recycled are the ones that pay for the recycling, a concept known as "extended producer responsibility" or EPR. Environmentalists are all in favour of EPR as it represents an extension of the "polluter.pays" principle. And it does make a lot of sense to me too, in principle at least. 

The change is supposed to save Ontario's municipalities about $200 million a year (about $10 million in the case of Toronto). Historically, under the municipality-operated recycling program, producers only funded about half of the costs, with the municipalities (i.e. taxpayers) paying the other half. Now, the organizations that produce the products and packaging will be responsible for operating and finding the entire program.

However, nothing I have read about it explains just how these cost are charged to the producing companies. It sounds like it would be a logistical nightmare. Does Circular Msterials somehow keep track of every paper, plastic and metal item that runs though its system and note down which producer was responsible for it? Surely not. But how else would it work?

Of course, the producers will no doubt recoup these additional costs through higher consumer prices - they're not charities after all - but the "producer pays" principle has been established, and in theory it is now in their interests to reduce their packaging in order to reduce costs. Except, in practice, as noted, they will probably just pass on the costs to us consumers anyway. But maybe consumers will become more picky about expensive over-packaged products, who knows?