Pickup Artists: outsourcing half the garbage collection was brilliant—privatizing the rest would be disastrous
The map of Toronto’s curbside waste collection operations, which is split into four districts, two east and two west, looks like a Risk board in stalemate. Ever since the privately owned Green for Life Environmental took over the west end in August 2012, leaving unionized workers to handle east-end collection, the city has been waging a quiet war over jobs, turf and public approval.
Launching his offensive from the west is Green for Life’s 34-year-old founder and CEO, Patrick Dovigi. GFL holds the city-issued contracts to collect waste from the 155,000 homes in District 2, from Yonge west to the Humber River, and the 65,000 homes in District 1, west of the Humber. In just seven years, Dovigi has gone from being a hockey goalie and NHL prospect to a specialist in outsourced waste management, building an empire with annual revenues of over $400 million. GFL also collects trash in other regions, including Newmarket, Hamilton, Windsor and Durham. Dovigi would gladly bid on the rest of Toronto’s garbage collection and take over the entire curbside operation.
His nemesis in the east is Jim Harnum, the City of Toronto’s GM of solid waste management services. A long-time municipal cleanse-o-crat, Harnum has a strong entrepreneurial streak of his own. As senior director of environment and sustainable infrastructure with the City of Hamilton, Harnum launched Hamilton Renewable Power Inc., whose mission was to capture methane gas produced in the city’s landfill and its wastewater treatment facilities, and turn it into electricity. Biogas generators are everywhere these days, but Harnum’s was the first of its kind in Ontario. Toronto’s solid waste department recruited him in May 2012, just a few months before outsourced collection began. His responsibilities include overseeing GFL’s compliance in the west end and managing the unionized city staff who handle pickup in Districts 3 (Yonge to Victoria Park) and 4 (east of Vic Park), each with roughly 120,000 homes.
This bifurcated system, which sounds like an unwieldy patchwork of competing interests, is a big success. Trash reform stands as Rob Ford’s one undeniable achievement. Before he was elected, garbage collection was a topic of bitter civic complaint. Today the city is getting better service at a lower cost. In 2013, the number of complaints about curbside collection west of Yonge was down to less than half of the 50 daily complaints the city used to get. And the savings are proving to be as advertised. The average cost per home for District 2’s curbside collection used to be $166 per year. GFL is doing the job for around $129 per household, for a total annual savings of $11.5 million.
And yet, surprisingly, it’s not just the west end that’s getting better service. When Harnum arrived in his new job, he inherited a staff that was discouraged and anxious. Although the city was able to reassign all 130 of its full-time employees and find seasonal jobs for some of the 90 temporary workers whose contracts were not renewed, any additional privatization was sure to put its remaining full-timers out of work. Harnum told them their only option was to beat the GFL guys at their own game. “My message was that if they provided the best service possible, they’d make it harder for any contractor to get more business from the city,” he says. “I made a commitment to put them in a better position to compete for their jobs.”
Staff have responded well to Harnum’s strategy. Average daily complaints east of Yonge are roughly on par with GFL’s. Costs have declined, too: overtime hours by city staff are down by as much as 11 per cent. Meanwhile, pluck is on the rise. The ice storm may have blacked out the city, paralyzed transit service, felled much of the urban canopy and spoiled thousands of kilograms of food, but the garbage trucks still managed to collect the trash within 36 hours, east and west of Yonge. The looming possibility of future privatization has forced both sides to perform better—one because they want more outsourcing, the other because they want to prevent it.
Putting trash services under “managed competition,” as it’s called, also makes both sides behave better in the boardroom. When collective bargaining begins again next year, CUPE Local 416 will have to temper its wage and benefit demands to remain viable. Unionized city staff earn $26.70 per hour. By contrast, GFL can pay its workers as little as $19.16 per hour, the minimum required under the city’s fair wage policy. Further union demands will only make contracting out more attractive.
Outsourcing also allows for more flexibility. Last summer, the city hired GFL to collect debris from the July floods. “It was a huge job, it had to be done right away, and GFL made it affordable,” says Harnum. “They had to. If they’d negotiated hard on price, I’d have said, ‘Forget it, I’ll just put my own staff on the job.’ ” The cleanup cost the city $1.4 million—most of which had already been written into the contract’s contingency plan.
So there’s an unexpected advantage to keeping your own platoon of garbage collectors, even if they’re more expensive: they help keep contractors honest. David Soknacki, the right-leaning mayoral candidate, favours putting a third district up for bids, then adopting a wait-and-see attitude on the last slice of work. He’d also consider outsourcing other city services, including parks maintenance, community centres and recreation programs—fine ideas all. The lesson from garbage is that city parks would be better kept and run.
Provided, of course, that the city retains some of the work. Toronto may have Rob Ford to thank for improved curbside collection, but his promise to contract out the rest of the city would undermine his own gains. If a firm such as GFL became the lone contractor, the city could be hostage to them at the bargaining table. Yet if a left-wing candidate—Olivia Chow?—were elected on a promise to reverse privatization, Toronto would be back where it was: with CUPE calling the shots, and residents paying dearly in terms of money, poor service and work stoppages. The current stalemate keeps all workers on their toes and lets residents breathe easy about the trash. Voters should beware any candidate pushing a big fix for a garbage problem that no longer exists.