City nears new private waste collection deal — but isn't saving what it once was

Toronto now spends nearly the same amount for private waste collection as it does for in-house collection.

The financial picture is clearer now that the city has released the price of its contract extension with Green For Life (GFL): $23 million per year until 2023. CBC Toronto has been asking for that price to be released since last October when it confirmed the city had struck a sole-sourced deal with the private company ahead major changes coming to the blue box recycling program.

GFL was paid $20.6 million in 2020, the final year of its initial contract, city staff said. That contract was worth $186 million.

GFL is also being recommended to take over waste collection in Etobicoke — a deal worth up to $88 million that would last until 2028 — which the infrastructure and environment committee is set to discuss at its Tuesday meeting. GFL's winning bid was some $5 million cheaper than its nearest rival.

Currently, GFL and Miller Waste Collection, the private company serving Etobicoke now, are paid a combined $33 million to serve about 230,000 households west of Yonge Street, city staff confirmed in an email.

It costs the city $33 million to have its own crews collect waste from 237,000 homes east of Yonge Street.

The cost comparison isn't exactly direct — city staff note the west end has more operational challenges, including more collections on narrow streets, one-ways and even laneways — but confirms public and private operations are closer than many Torontonians may assume.

City officials once boasted privatization of waste collection saved $11.5 million per year. While that no longer appears to be the case, officials still seem pleased with having both public and private pick-up.

"A blend of in-house and contracted service provides a competitive environment that is effective in terms of costs and performance," said Matt Keliher, the city's head of waste management, in an email to CBC Toronto.

"It also allows the City to manage operational and financial risk and provides flexibility for the curbside waste collection system to adapt to changes."

More waste, more money for GFL

City staff did not, however, provide a direct comparison between private and public operations when it comes to waste diversion.

In fact, GFL can be paid more if its collectors haul more waste away.

When asked why the city would reward a private company for collecting more waste, Keliher said the waste tonnage estimates included in GFL's contract are based on historical data and noted citizens are the ones who decide what to put out on garbage day.

"The amount of waste collected by GFL in District 2 is entirely dependent on what residents put at the curb for collection," Keliher said by email, noting GFL could also be paid less should it collect less.

"They are paid the same per tonne to collect garbage, recycling and organics so there is not an incentive to collect more of one than the other."

In 2017, Mayor John Tory launched a bid to privatize waste collection in Scarborough but abandoned the plan following a tense debate where unionized workers repeatedly told the city there were no savings to be had.