Privatization: How much is too much?

Curbside pickup west of Yonge Street is the opening volley in the city's garbage-privatization battle, but the message from Mayor Rob Ford and his administration is that it's just the beginning of the service-contracting war.

Garbage collection is low-hanging fruit when it comes to contracting out: There's plenty of precedent for it not only elsewhere in Ontario but in Toronto, where half the solid waste department's annual operating budget already goes to private contractors.

What's next on the list? Think grass-cutting, which Mr. Ford cited in his year-end interview as something he'd like to explore contracting out, and office cleaning. Aside from Mr. Ford's own campaign mantra of the millions he'd save by getting private companies to clean out the Toronto Police Service's offices, that very idea was the closest the city came to tackling the privatization debate in the final days of former mayor Mel Lastman's administration. (The issue ended up being deferred by a close vote and was never revived during David Miller's administration).

But even Doug Holyday, deputy mayor and the city's patron saint of privatization, wants to keep control of city services in city hands - and some functions are sacrosanct enough to keep public, he says.

"Some things you wouldn't even think of contracting out. Some of the administrative jobs here, and some of the services we're supplying here are customer-sensitive and traditionally done by municipalities," he said.

"But nothing's impossible," he noted. "If there's money to be saved, that's something we have to look at."

Mr. Holyday also emphasized he wants to keep control and supervision of city functions in-house, "so you always control it, and you always own it, and you always decide, in the end, who's going to do the work. It's not like selling it off and having nothing to do with it again."

Public works chair Denzil Minnan-Wong said he'd draw the line when it comes to residents' health and safety.

"You wouldn't want to [contract out]things that relate to the safety of water, the safety of people, the safety of food. People want the city to deliver those services."

In addition to about half the solid-waste budget (clocking in around $342.6-million this year), the city already contracts out all major road repairs and three-quarters of winter road maintenance.

Mr. Holyday's opening remark when the city formally announced its plans on Monday about curbside pickup west of Yonge Street was that this should have happened when the Toronto megacity first amalgamated a dozen years ago.

Something like it almost did: Mr. Lastman struck a task force to look at ways to save money in an amalgamated city, including "alternative" forms of service delivery.

"Mel never did much with it," says retired city councillor Brian Ashton, who chaired the task force. "I think it was just too frightening. … He wasn't prepared to move in that direction."

"[Now]you have quite an anxiety and concern by the broader public that somehow public service is more expensive than private."

The task force's report, which went forward in 2001, contained contracting-out guidelines but also noted that "experience internationally demonstrates some of the savings are illusory and some of the pitfalls can be quite significant," Mr. Ashton said. "Particularly when you disband your own services. The ability, then, to maintain a competitive edge in the private sector starts to evaporate."

For example, if the city privatized garbage completely, and sold off the city's trucks, it could lose leverage to bargain with companies possessing equipment it lacks.

"I think it would be a huge mistake to go 100 per cent to the private sector for garbage removal," Mr. Ashton said. "You'd find yourself eventually at a less competitive cost and creating other monopolies."

Ultimately, Mr. Ashton said, it's a philosophical debate.

"That's the question of whether a city or government has the responsibility to provide services that … take on the responsibility of paying adequately and having good benefits, raising the bar and providing leadership as a consequence - versus a really totally private-sector competitive environment where things all drive to the bottom."