The discussion over whether Toronto should contract out residential garbage collection has been influenced by claims in two recent reports.
- In its September 2010 report Picking up Savings: the Benefits of Competition in Municipal Waste Services, the C.D. Howe Institute claims that Toronto could save $50 million a year from contracting out all residential waste services.
- In its Bridging the Chasm report of May 2010, the Toronto Board of Trade claimed Toronto could save $104 million in 2014 and 2015 by bringing its costs of waste collection to 125 per cent of the GTA average.
Both studies suggest that there are large savings that can easily be achieved.
The problem is that these reports of potential savings appear to be inaccurate or are highly speculative claims based on flawed analysis.
C.D. Howe Report
In order to make its argument that private is less expensive, the C.D. Howe report uses several complicated econometric models. But the report actually shows that they struck out on their first two attempts to show that contracted-out waste collection is consistently cheaper, so they engineered their data in an attempt to prove this point—and then generalized these results in a highly speculative manner to calculate municipal savings.
Toronto Board of Trade
The Board of Trade’s numbers are contradicted by the information that municipalities submit to the provincial Ministry of Municipal Affairs. Figures reported by the Ontario Municipal CAO’s Benchmarking Initiative (OMBI) in their annual reports also show that the City of Toronto’s costs per tonne have been consistently below the provincial average and are below the average for other GTA regions.
Contracting out municipal services on the basis of ideology and biased reports rather than on factual analysis won’t result in savings for the residents of Toronto. The real numbers and the experience show that Toronto’s waste collection service is one of the most effective in the province and compares favourably to other cities in Ontario.