Competition for Waste Service Saves Cash, Multi-City Analysis Shows: C.D.
Howe Institute

TORONTO, Sept. 9 /CNW/ - Cities save money through competitive tendering of waste services contracts, according to a study released today by the C.D. Howe Institute. In "Picking up Savings:  The Benefits of Competition in Municipal Waste Services," policy analyst Benjamin Dachis finds municipalities that have their waste services provided through contracted operations have substantially lower average costs per household than municipalities with few of their services provided through contracts.

"Municipal policymakers who contract out waste services through a well-designed contracting mechanism can reduce the costs of providing waste services and limit the consequences of municipal strikes," commented Dachis.

The study shows that where city employees provide the bulk of waste services, such as in Toronto and many others in Ontario, Vancouver, and Calgary, municipalities could reduce the costs of their waste services through increased contracting. Contracting can also be used to attain other goals, such as increased recycling rates, if municipalities provide incentive payments for contractors who meet their targets.

The study, which analyzes the finances of hundreds of cities in Ontario, also finds cost savings from contracting will be apparent only if municipalities follow certain guidelines. Contracts should clearly define outcomes, and not specific processes, that contractors must meet. Municipalities might retain ownership of municipality-specific assets, such as landfills or waste-to-energy facilities, but contract out their operation, to prevent contractors from monopolizing local infrastructure that cannot be easily replaced. Municipalities can also retain a role for public employees in waste services by opening bidding for waste services to both private contractors and current public employees.

For the study go to http://www.cdhowe.org/pdf/commentary_308.pdf

For the Communiqué  go to http://www.cdhowe.org/pdf/commentary_308pr.pdf

For further information:

Benjamin Dachis,
Policy Analyst, C.D. Howe Institute,
416-865-1904