Finance

Junkyard confidential: At the heart of a $500-billion global recycling industry

Canada Metal & Iron is just one of the businesses that helps recycle 11 million tonnes of metal annually in Canada

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Art Kaminsky’s office is at the end of a cramped hallway at the back of a cluttered two-storey building near a busy intersection in Toronto. In keeping with the building’s overall interior decor, the office is crammed with stuff.

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There is a pile of warm coats on the closet floor, two mountain bikes, two desktop computers of antique-looking quality and an old briefcase beneath a desk weighed down with tchotchkes, including a clock that doesn’t keep the correct time, and a brass elephant with its trunk stuffed full of business cards.

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By even the most generous of assessments, it is a fantastically messy space, and entirely befitting of the fourth-generation family business co-owner who shares it with his 37-year-old son Josh. That is, when they are not out and about in their equally junky, yet impeccably well-organized, scrap metal yard.

All are welcome at Canada Iron & Metal Co. Ltd., including that guy in the beat-to-heck pickup truck you’ve likely seen fishing for discarded aluminum siding, wiring, pipes, modems, stainless steel dishwashers and other shiny and not-so-shiny cast-offs from your neighbour’s home renovation dumpster.

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Six days a week, the yard receives anywhere from 150 to 250 skilled tradespeople, do-it-yourself home improvers, demolition companies, boat wreckers looking to sell 1,500-kilogram sailboat keels and fellow scrapyard owners with, perhaps, a discerning eye for stainless steel car rotors and a 30-year-plus history of doing deals with a family that has been in the scrap business since 1937.

“It is the end here,” Josh Kaminsky said. “But it is also the beginning.”

Canada Iron and Metal is a small family business, with about 20 employees.
Canada Iron and Metal is a small family business, with about 20 employees. Photo by Peter J. Thompson/National Post

Is it ever. On its own, Canada Iron and Metal is a small family business, with about 20 employees, set on a 1.5-acre patch of real estate bordered by train tracks to the north. But it is also a cog in the vast, US$500-billion global recycling industry.

The Canadian Association of Recycling Industries (CARI) estimates about 11 million tonnes of metal and metal products are annually recovered and/or recycled in Canada. CARI pegs the annual value of metals recycled and processed by domestic companies — from the Kaminskys to big industry players such as Brampton Ont.-headquartered Triple M Metal LP, which has operations in Canada, the United States, Europe and Mexico — at more than $10 billion.

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In other words, there is big money to be made from all the things our rampant consumerism compels us to discard, including, say, that stainless steel dishwasher your neighbour just put out front.

It is the end here. But it is also the beginning

Josh Kaminsky

There is a good chance that dishwasher won’t stay put long enough for the city to pick it up. Instead, a private citizen or business will grab it and bring it to a scrapyard, where it will be sorted and then shredded into tiny bits, together with other cast-off household appliances, junked cars and just about anything with metal in it.

The tiny bits are then sent to a steel mill, likely in Hamilton, but potentially south of the border, melted down in a giant cauldron and recast as a new slab, steel sheet or steel ingot to be sold to a manufacturer that will turn it into, well, you name it: car parts, bridge parts and even a new dishwasher the neighbour can purchase to replace the one they just threw out.

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“It is important to understand that recycling is much more than residential ‘blue box’ collection programs,” Tracy Shaw, CARI’s chief executive, said.

It is equally important to understand that the Kaminskys — Art’s younger brother Eric and his son Joe also work in the family business — aren’t a bunch of grubby-looking rubes being preyed upon by global market forces. They are scrap metal yard owners in name, but in daily practice they are sophisticated, hardhat-wearing commodities traders, who prefer outfits designed to get dirty over expensive suits.

Cutting copper pipe at Canada Iron & Metal.
Cutting copper pipe at Canada Iron & Metal. Photo by Peter J. Thompson/National Post

“We deal with everybody from the common man to the presidents of large corporations,” Art said, before launching into a story about being at a dinner party and falling into a conversation with a Richie Rich type. As talk wound round to their respective livelihoods, the wealthy individual commented, “Finally, someone who isn’t a lawyer.”

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As Art puts it: “You are who you are. There is no putting on airs here.”

But there is always plenty of hard work, something the Kaminskys are used to. Art’s grandfather Saul was a Jewish immigrant from Ukraine who came to Canada penniless in the mid-1920s and drove a truck for a spell before opening Canada Rag and Metal, taking in everything from old mattresses to cast iron stoves.

Saul died of a heart attack at age 40, so Art’s father Leon stepped in to run the business. Eventually, his three sons joined him, but not before going to university and, in Art’s case, backpacking around Asia on a coming-of-age trek that partly explains the Hindi-themed trinkets such as the card-holding brass elephant that clutter his desk.

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Tidiness isn’t a requisite to work in scrap, but discipline and paying attention to detail are musts. The Kaminskys are up each morning before the crack of dawn checking global commodity markets and setting the prices they are willing to pay for aluminum painted siding (75 cents per pound), lead acid batteries (24 cents per pound), bare bright copper ($4.50 per pound) and a variety of other things.

Josh Kaminsky, left, and his father Arthur Kaminsky, right, at Canada Iron & Metal.
Josh Kaminsky, left, and his father Arthur Kaminsky, right, at Canada Iron & Metal. Photo by Peter J. Thompson/National Post

Each category of metal is further broken into subsets — with pure copper being the equivalent of a scrapper’s gold — and each subset has a different price, since not all junk, nor all copper wiring, is of equal value. Of course, the people who drive through the yard’s gates have prices of their own in mind for whatever it is they are trying to sell.

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“Every day is a haggle. There is a haggle on everything,” Josh said. “Everybody wants to get the best price, because every cent matters.”

For example, “Mikey,” one of the yard’s regulars, wants 60 cents a pound for his load of stainless steel. The younger Kaminsky won’t budge. “I’ll give you 55 cents.”

Sold.

A person unloads scrap metal at Canada Iron & Metal.
A person unloads scrap metal at Canada Iron & Metal. Photo by Peter J. Thompson/National Post

Such trades have been occurring for decades, often accompanied by the bark of a junkyard dog in popular imagination. But there is no dog at the Kaminskys’ place. Their last dog, Q, died and they never got around to replacing him.

Perhaps that’s as emblematic of the modern scrapyard as Josh Kaminsky is of the modern junkman. His coming-of-age trip was to India, while his resumé is highlighted by a business degree from Western University’s Ivey School of Business, followed by a four-year stint as a territory manager with Imperial Oil Ltd. in Calgary.

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“There is too much structure at those big companies,” he said. “Scrap is a wheeler-dealer business. It is fast paced, and by the afternoon, you already don’t remember the morning. When you make a bad deal, you just keep on moving.”

Being in constant motion is part of the joy of working in scrap. Art never wanted a desk job and he doesn’t have one now. The entire family bicycles to work, and they are diligent recyclers in their home lives. Art even takes his clothes to a seamstress near the yard for repairs. The Kaminskys know the value of the items other people throw out, as do their customers.

We are the real recyclers

Josh Kaminsky

“We are the real recyclers,” Josh said.

Consider the percentages: 45 per cent of worldwide annual production of steel, more than 40 per cent of copper production and almost 35 per cent of aluminum is produced from recycled material, according to the Bureau of International Recycling.

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There are more than 1,000 registered recycling facilities of all sizes, and all commodity types, in Canada alone.

But repurposing old junk, or closed-loop recycling in industry speak, doesn’t generate the same buzz as the electric vehicles, wind farms, geothermal heating, carbon-capture technology and other innovations designed to make the planet a healthier place. Junkyards, however, are more often the authentic frontline players in the green revolution.

Metal trimmings at Canada Iron & Metal.
Metal trimmings at Canada Iron & Metal. Photo by Peter J. Thompson/National Post

“When it comes to recycling minerals and metals, what you are displacing is virgin materials that would otherwise require being mined,” Jury Gualandris, an associate professor at the Ivey School of Business, said.

“If you think of the electricity required to operate a mine, and the diesel required to run the machinery at a mine, you save all of that, which, from a carbon standpoint, makes the recycling of metals and minerals a net negative.”

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Even that tangle of old computer cables, which gets sorted, packed into a shipping container and sent, as is sometimes the case, from the Kaminskys to China to be fashioned into something new, travels a less carbon-intensive route than mining all the ingredients and starting from scratch.

Recycled metals are a cheaper trove of supply to draw from, and companies such as Ohio-based steelmaking giant Cleveland-Cliffs Inc. know it.

Cutting up metal at Canada Iron & Metal.
Cutting up metal at Canada Iron & Metal. Photo by Peter J. Thompson/National Post

Cleveland-Cliffs paid US$775 million in 2021 to acquire Ferrous Processing and Trading Co., one of the “largest processors and distributors of prime ferrous scrap in the United States,” according to a company statement detailing the purchase.

Among the reasons given for the deal: “immediately securing access to prime scrap, where demand is expected to grow dramatically with limited to no growth in corresponding supply.”

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The Kaminskys haven’t received any calls from American steel giants shopping for mom-and-pop scrapyards lately, but the occasional developer does appear at the gates of Canada Iron & Metal to inquire about buying the property.

But retirement isn’t a deal Art seems interested in even though he’s 67. He’s “still going strong,” he said, while his son has young kids, and little inclination to return to a corporate gig, as much as he learned from it.

There are perks, after all, to working with family, chief of which might be that you will always be family. There’s no pulling any punches. Conversations related to the business can be perfectly frank and minor tiffs quickly forgotten amid the more pressing reminder that there is always another pick-up truck pulling through the gates.

“We live in a very wasteful society,” Josh said. “People keep throwing out perfectly good stuff.”

Leave it to the Kaminskys to find profit in the mess.

• Email: [email protected] | Twitter: oconnorwrites

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