Toronto city hall accused of ripping off private haulers by double, report finds

Toronto taxpayers are being ripped off after private waste contractors signed contracts with city hall that paid them more than double what larger companies were paying the city, according to a new report.

The report, released by the city on Friday, found Toronto’s private operators had signed contracts for waste collection services that provided them an estimated $50m in additional revenue. The deals meant that the private haulers generally paid the city an additional $20m a year on top of the $480m they were already billing, according to the report.

Why is the City of Toronto receiving profits in the form of private garbage haulers? Read more

“In light of this evidence, the City has concluded that its current private waste collection contracts with private haulers are likely to be more profitable for the City and the private contractors than the existing agreements with commercial waste haulers,” wrote Stephen Buckley, the director of city services at the city.

The additional annual payments by the private operators took place after the city established the Progressive Waste Management Program (PGMP) in 2006 as part of a sweeping effort to deal with the city’s solid waste woes. That program sought to consolidate garbage collection to single-sort bins in the residential sector. The plan was to save the city $13m a year by maximizing the reuse of waste and reducing the amount it sent to the landfills. However, the move was opposed by environmental organizations and resulted in a spike in the volume of solid waste collected in the city, much of which was passed on to the commercial sector.

Business owners are now paying an average of 70% more per ton than they were back in 2006. Average residential rates are now about $73. The higher prices at the commercial level resulted in the private garbage collectors shifting their business model to meet the rising rates.

The report said that the city was most concerned that private haulers were not passing on the savings they were realizing to the businesses that took their garbage. If not, “we would expect to see some elements of the quality of service decline”, the report said. “When this takes place, we will not tolerate it and will consider different options.”

In an earlier report, Buckley criticized the the city’s consultant for finding that the private haulers saved the city millions of dollars by awarding lucrative contracts to companies like Waste Wheel Management Co Inc, a company that has been banned by Ontario’s Fair Labour Code for not paying employees minimum wage and overtime and withholding pay. At the time, Toronto’s mayor accused Buckley of focusing on the business side of the contract but missing the fact that the city was saving millions of dollars through the waste program.

The city has said it will enact new rules to ensure the public is getting value for its money and will try to ensure companies that participate in the private landfill collection market participate in the same fair practices as other businesses.

Leave a Comment