October 1, 2007

Contracting out waste services could save Toronto $10M per year, says OWMA

Toronto could be saving at least $10 million a year by contracting out residential waste and recycling collection, says the Ontario Waste Management Association (OWMA). A study carried out by the OWMA and a working group of private-sector experts found that the six Greater Toronto Area (GTA) municipalities-Mississauga, Brampton, Vaughan, Richmond Hill, Markham and Pickering-are paying, on average, nearly $24 less per tonne for waste and recycling collection than Toronto.

In these communities, residential waste and recycling collection is 100% contracted to the private sector, in contrast with Toronto, where 80% of these services are handled by city workers. Private-sector waste companies are delivering the same service for approximately 20% less than the cost of the public sector, says the OWMA.

If Toronto contracted out the collection of the 402,762 tonnes of residential waste now collected by city workers, the potential savings would be $9.6 million per year (402,762 tonnes x $23.73/tonne), or roughly $50 million over the life of a standard five-year contract for waste and recycling collection services, without any reduction in service.

The city would also realize other benefits, such as significant revenues from the sale of the city's waste collection equipment and truck fleet, predictable costs over the life of waste services contracts, and fewer labour disruptions.

In addition, noted OWMA president Rob Cook, private-sector workers are more productive than city employees. He cited figures from the new study showing that the average productivity of a private sector waste collection worker is more than double that of a city of Toronto worker: 0.96 tonnes per worker per hour, compared to 0.40 tonnes/worker/hour in the public sector.

The OWMA says its study shows that Toronto is out of step with most other municipalities in Ontario when it comes to waste and recycling collection service. Across the province, 85% of municipalities are using private-sector waste collection and recycling services, while in the four regions surrounding the GTA (Halton, Peel, York and Durham), 22 of the 24 municipalities are 100% contracted-out (Oshawa and Whitby being the sole exceptions).

The association says that in the light of the serious budget shortfall facing Toronto, the city should be looking at this option rather than threatening cuts to municipal services and trying to levy new taxes. "Contracting waste collection services is a perfect example of the significant savings that can be found," said Cook.

The OWMA represents nearly 300 private-sector waste management and recycling companies. More information on the study is available from Rob Cook at the OWMA, 905/791-9500, E-mail rcook@owma.org, Web site www.owma.org.

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