Toronto City council has approved a deal to contract out garbage collection in the city's west end, handing Mayor Rob Ford a victory on a major campaign promise as he marked the one-year anniversary of his landside win by declaring his intention to run for a second term.
The $186.4-million contract to pick up garbage at 165,000 households between Yonge St. and the Humber River, was awarded to Green for Life Environmental East Corporation. The deal's approval Monday by city council means that private collection could begin as early as next summer. A private company already does curbside collection in the former city of Etobicoke.
"This is a campaign promise that I have fulfilled - another one," Mayor Ford said Monday on the eve of his one-year mark in office. "We are doing exactly what we said we were going to do and a lot of people are very happy about that. "
The mayor said the move is the first step in the eventual privatization of all garbage collection - a goal he said may have to wait until his second term to complete. "Three more years and I'll be running again, that's for sure," he said. "I'm running, 100 per cent," he added later. "I'm already out campaigning."
Public Works chair Denzil Minnan-Wong estimated that the new contract will save the city as much as $100-million if it is extended to a full nine years.
Opponents of the plan countered that such savings are too good to be true, predicting that the winning bidder will be unable to provide the service for the price it has given. "
"We have a price that is ridiculously out of whack with all the other bids," said councillor Gordon Perks, a strong opponent to contracting out. "This a sucker bid and we would be suckers to take it," he said before the vote.
Mark Ferguson, head of the union that represents the city's garbage collectors, said the privatization plan is payback for the lengthy strike in 2009. "This wasn't about finances. This wasn't about good policy decisions. This was about exacting a pound of flesh for a legal strike," he said.
Mr. Ferguson estimated the contract will put about 310 temporary workers out of a job. Permanent employees will be relocated to other positions.
Mayor Ford said the lengthy garbage strike was a major driver of his privatization plan. "The strike was a tipping point," he said. "Enough is enough. We can't have another situation like that."
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Hamilton's savings by outsourcing garbage with GFL division modest
Since amalgamation in 2001, the City of Hamilton has relied on a 50-50 mix of public workers and private haulers to collect residential waste and recycling.
The City of Toronto is following suit, in more ways than one.
In 2005, Hamilton awarded a $40 million/five-year contract to National Waste Services, a division of GFL Environmental, the firm Toronto officials recommended as the winning bidder in a $186-million/nine-year outsourcing deal.
The city's numbers indicate the windfall from the private-public strategy is modest. Indeed, the private operator's costs have risen far more steeply than the city's.
According to a April, 18, 2011 staff report, the average household cost in areas served by city workers was $71.91 in 2004. For Hamilton neighbourhoods serviced by private haulers, the figure was $60.88.
Five years later, the two are almost at par – $95.29 and $96.45 respectively. Between 2004 and 2009, however, the private contractor's costs jumped 58.4%, or 11.7% per year, while public sector costs rose just 32.5% (6.5%/yr). The reason, said Hamilton waste management spokesperson Pat Parker: fuel and cost-of-living adjustments. National, she added, wasn't unionized when it won the deal in 2005. But its drivers are now represented by the Canadian Auto Workers. Collection costs also rose in 2006 because the city introduced a green bin program.
- John Lorinc, Special to the Globe and Mail