TORONTO — New rules, extra inspections and the threat of a 3,500-percent fee hike hang like an axe over the shipment of tons of Canadian waste to dumping grounds in Michigan, raising fears of a ban or a possible trade war.

The City of Toronto has been shipping trash to Michigan since 1998, and now sends out about a million tons a year.

Combined with commercial and industrial waste from the city and other parts of Ontario, it adds up to almost 4 million tons, or 18.6 percent of the trash dumped in Michigan's landfills.

That's an issue that annoys some in Michigan, and spooks many in Toronto.

"If the border closes to Michigan, we will have waste not being picked up on the streets within 72 hours because there will be no place to take it," said Rob Cook, president of the private-sector Ontario Waste Management Association.

"It's very scary for us and very scary for average residents."

Fears in Ontario have been heightened by Michigan state legislation that would return to states the power to ban cross-border trash, outlawed by the U.S. Supreme Court in 1992.

The bill to reinstate that ban, sponsored by Republican House Representative Dan Acciavatti, is headed for approval to Congress and then for signature by President George W. Bush.

"As soon as the federal government unties our hands and gives us the authority, 90 days thereafter, Canadian trash is no longer welcome in Michigan," Acciavatti told Reuters.

"Toronto is spending a great deal of money putting their trash on a truck and traveling 300 miles to Michigan with it because they don't have the political will to site a landfill in their own country."

Ontario approved a new landfill in 1999 but halted plans soon afterwards amid objections from environmentalists and community activists.

And the province closed a major landfill in 2002, further raising the appeal of the Michigan solution.

"We're not sending (waste) there because it's cheap. We're sending it there because we have no space to deal with it," said the Ontario group's Cook.

A Michigan proposal to raise the tipping fee to $7.50 a ton from 21 cents a ton would make no difference, Cook said.

"It won't stop one ton from going to Michigan."

Toronto officials say they are working on contingency plans to keep their trash out of Michigan by 2010, including finding alternative landfills in Ontario, ramping up recycling and eventually using new technology to convert waste.

"We don't want to be there so we're always looking for a way to get out," said Councilor Shelley Carroll, who chairs the city's Works Committee.

Indeed, Toronto's waste may find a sticking point in a Michigan state senate budget plan that could include inspection fees of up to $45 million a year on Toronto-area garbage.

Two Democratic senators from the state proposed the plan, pointing to a recent audit by the U.S. Homeland Security Department that said inspection needed to improve.

Inspections have found medical waste, illegal drugs, counterfeit currency and radioactive material in the trucks, and the two senators want Homeland Security to release its report in full.

Still, free trade legislation could save Ontario, as solid waste is considered a commodity that should not be subject to trade barriers, so a change in Michigan's rules could lead to an ugly trade war.

Andrew Hannan, a spokesman for Canada's Ministry of International Trade, said any new rules on commerce between Toronto and Michigan must continue to reflect rights within the World Trade Organization and the North American Free Trade Agreement.

"We have raised our concerns with proponents in Congress, the Michigan legislature and with the United States Trade Representative," he said.

Source: Reuters