Rob Ford in Toronto is mulling contracting out garbage.  I wanted to show that in the city I live in, Winnipeg, the contracting out that has happened since 2005 does not save a single cent.  It actually has cost more every year since.  But ideology has resulted in Winnipeg City Council not going back to collecting garbage internally.

Garbage removal has cost more every year since if has been contracted out. In the most recent budget for the city, Solid Waste Removal was budgeted to cost the city 21.34 million dollars while in the 2008 budget it cost the city 15.9 million dollars. (2010 budget, pg.40.) This is even though the city has decreased the amount of full time positions in Solid Waste Removal to 12 from 26 in 2008. Though in the Solid Waste Collection Business Plan in 2005 the city said that if they contracted out both manual collection and autobin collection it would save the city 23.7 million dollars a year from the status quo (2005 Solid Colllection Business Plan, pg. 25), which we can see is a complete lie. So did they purposely lie in this business plan to make contracting out look better than it actually was. Instead of saving the city 23.7 million per year it cost the city an extra 5.4 million from 2008 to 2010. Finally, in the 2010 budget the city says that there has been an increase of 1 million dollars in contract costs from the last budget. (2010 budget, pg. 40)

Why is there an increase in garbage removal every year instead of the promised savings? In my opinion it is a number of things. But the major thing is the fact that there is basically a monopoly in garbage removal in Winnipeg. There is only one major multinational company that can do the removal of garbage. That company is BFI. There are other companies like Waste Management who used to do the contracted garbage removal in the north of city but they are not able to do the large garbage removal that it takes. They slightly touch on this in the Solid Waste Collection Business Plan, by saying:

“The most significant risk with this option (contracted service) is the escalation of contract pricing. This concern would be related to a reduction in the number of companies bidding on contracts

and a monopoly being held by one company. The normal escalation by inflation would not be a concern since it would impact all of the options being considered.  While there was a trend for significant consolidation of companies in the waste industry previously, there has been some reversal of that trend in Winnipeg. There are at least five significant players in Winnipeg and at least three that would bid on the manual and AutoBin collection contracts. In addition, with long term contracts, it would be reasonable to expect out of province bids.

” (Solid Waste Collection Business Plan, pg. 28)

But because of their bias view the producers of this business plan have toward contracted service they say that the concern is not merited because there are enough companies in the city to compete with each other. We have seen that this is not true. Also, they say the city can go out of province to stop the monopoly but that is not possible and would not achieve good service.  The only company that can do the contracting is BFI and because of that they have been able to demand higher contracting costs without the city being able to do anything, as the city sold off most of their garbage trucks. 

It is easier to contrast when looking at the costs of garbage collection before the City contracted it out in full.  In 2000, garbage collection cost 12,583,860 and in 2001 it cost 13,233,838 an increase of $649,978.  In 2002, garbage collection cost 13,982,720 an increase from 2000 of  1.1 million.  When the city did garbage collection internally costs only increased by 1.1 million over two years but since they contracted out the costs have increased every year and from 2008 to 2010 garbage collection increased by 5.4 million.  In numbers alone it cost the city less to collect garbage internally then when they fully contracted it out.

It is ideology that makes governments contract out services.  Their ideology is why they give their private sector friends contracts, at the expense of services to citizens.  Even if the costs increase they will still contract out to the private sector.  Reports, like this, and research will not persuade them against contracting out.  Even electing supposive progressive adminstrations will not result in the stopping of contracting out, as seen in Toronto.  The people have to take to the streets and not allow these conservatives to achieve their goals.  We as citizens must show them that we will not accept these private contractors doing the jobs of city employees.  That will only be achieved through action.