Toronto private waste haulers cost taxpayers $2bn a year, report says

Toronto’s private garbage haulers were supposed to save taxpayers billions of dollars, but a new report has said they cost more than $2bn annually to operate, despite boasting higher-than-expected revenue. Toronto waste watchdog seeks…

Toronto private waste haulers cost taxpayers $2bn a year, report says

Toronto’s private garbage haulers were supposed to save taxpayers billions of dollars, but a new report has said they cost more than $2bn annually to operate, despite boasting higher-than-expected revenue.

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Mike McCormack, president of the Canadian Union of Public Employees, which issued the analysis on Thursday, said the report also revealed that private companies “take uneconomic routes to squeeze every penny from their customers”.

Toronto’s private haulers earn about $120m per year in revenue, which is significantly more than expected, but lose $1.8bn annually, the CUPE report said.

“The [private companies] are supposed to provide savings, but they are spending taxpayer money on a completely different type of management that is not delivering on what they promised,” McCormack said in a statement.

The report found that although the city had a budget surplus of more than $2bn last year, it received more than $840m in revenue from the private haulers, which the report said was more than seven times the estimated revenue gain.

A city spokesperson responded to the report by saying that “for the third year in a row, the public-private partnership (P3) program in the collection of waste and recycling has generated the net projected savings to City of Toronto taxpayers”.

Other data provided in the report showed that the private companies charged $534 for a single tonne of garbage collected between 2012 and 2016, compared with $203 for services provided by the city of Toronto.

An email provided by the city to the Guardian from McCormack and seen by the Guardian said the average internal rate of return for P3 contracts was “more than 35%”, although it was stated in the CUPE report that the City of Toronto had used low rates in the past.

In November 2017, the city won the right to partner with two private companies for the collection of waste and recycling in Toronto. They were Veolia Canada and Cartesian Aggregates.

Saving the city billions

Last year, Toronto Mayor John Tory said the city hoped to save $370m a year after launching the new deal.

McCormack said although City of Toronto resources should not be used for a private company’s profit, the city’s private waste haulers charged significantly higher rates than those in Toronto.

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“Toronto taxpayers will continue to pay for garbage that is already sitting in bins. The cost of that waste, along with the costs of garbage pick-up and disposal, are being financed by taxpayers,” McCormack said.

In January 2018, Harry Ha, president of Cartesian Aggregates, told the Guardian the company had agreed to charge $564 to remove one tonne of garbage.

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