c/o North York Women’s Centre

2446 Dufferin Street, Toronto, ON M63 3T1

info@twca.ca p. 647.235.8575

Tuesday, April 26th 2011

Deputation to the Public Works and Infrastructure Committee, City of Toronto

Good Afternoon,

Thank you for the opportunity to speak to you today. I am a resident of Toronto and a member of
Toronto Women’s City Alliance. We are a diverse group of women who have been organizing to
end the growing silence and invisibility of girls' and women's perspectives and priorities on the
political agenda in the City of Toronto.

I am also a consultant to UN-HABITAT, the United Nations agency for human settlements.
Today, I would like to speak to the issue of contracting out of solid waste collection and other
cleaning services by the city of Toronto from the perspective of UN-HABITAT’s global agenda
on sustainable urbanization. Indispensable to sustainable urbanization is good governance.

Good governance is premised on a few interdependent principles that guide city building and
development. These include: sustainability, equity, efficiency, transparency, accountability, civic
engagement and citizenship.

Toronto is a city of international standing. One area where Toronto is outstanding is in its
commitments and actions in mitigation initiatives to reduce Green House Gases (GHGs) and
more recently efforts at adaptation to climate change.

My concerns about recent developments in Toronto – developments for example that have cut-
back on public transit; compromised the right to shelter (an international commitment of
Canada); the move to eliminate the City’s committees that enable women and men to engage in
city policy and programmes; and now the attempt to privatize solid waste collection are
developments that are contrary to the principles of good governance and urban sustainability.
These developments will compromise Toronto’s international standing.

In the current discussion on contracting out of solid waste a few issues are particularly
disturbing. First, there is the larger issue of compromising the mandate of local governments to
provide quality public services such as solid waste management. As you know, along with transit
and transportation, solid waste management is one of the key components for the management of
Green House Gas emissions. Recycling, composting and measures to reduce the production of
solid waste in a city is an area where only a local government can provide leadership and not a
private sector company. Why? As a level of government, you have a responsibility for the well-
being of the people, the economy and the environment of the city. You were elected to safe guard
and enhance the liveability of Toronto. Private sector companies do not have this mandate and
neither are they able to do what you can do as a government. Furthermore, the city’s solid waste
workers have been instrumental in leading change for sustainable management of solid waste via
their involvement in the Green Bin initiative. This initiative would not have existed if solid waste
was not managed by the City. With an overall diversion rate of around 60%, Toronto
 c/o North York Women’s Centre
2446 Dufferin Street, Toronto, ON M63 3T1
info@twca.ca p. 647.235.8575

is an urban leader on this matter and its workers and residents have made this happen with their
city officials.

Secondly, there is the issue of transparency and accountability in terms of access to information
and studies on cost accounting and performance measurement, the quality and efficiency of
alternative service providers, the number and status of workers who would lose their jobs, the
sale or not of the city’s assets, and involvement of citizens and elected officials in the final
decisions in contracting out or not of services. As the proposal of the City implicates millions of
dollars and quite a few jobs, transparency and accountability require that the workers themselves,
other city staff and elected officials be involved in the decision to contract out or not. It is also
important that as staff and elected officials you are open to hearing what the women and men of
Toronto are telling you today.

The right to decent work is also a key principle guiding sustainable cities. This means the city
provides leadership in advancing opportunities for women and men to obtain decent and
productive work, in conditions of freedom, equity, security and human dignity. Decent work
means a fair income, security at the workplace and social protection for women and men and
their families. Collecting garbage is not a glamorous job, but it is an important job. Let us not
short change the women and men who do this work. In an attempt to save a few dollars in the
short run, let us not compromise the quality of life and the economy for many Torontonians in
the long run.

And another important reason to keep public services public is that privatization leaves the city
vulnerable to corruption. Studies on transparency indicate that privatization corrupts government
through graft and bribery, the costs of which are hidden in private balance sheets and public
ledgers. Of course, this is true for all levels of government.

And finally, it is worth visiting the debate in local governments on contracting out and in-house
services. Water and solid waste are two municipal services which have experienced the most of
contracting out and bringing back in-house.

A recent (2011) analysis of the local government surveys of the International City County
Management Association in the United States by Prof. Mildred Warner of Cornell University
provides an interesting analysis of the history of contracting out and in-sourcing of municipal
services – primarily water and solid waste collection.

Her research indicates:

1) The trend to out sourcing was greatest from 1992-1997 – up to 18% of municipal
services. In-sourcing was 11%.
2) From 1997-2002, in-sourcing exceeded new contracts by 50%.
3) From 2002-2007 the rates were about equal. The reasons for in-sourcing of previously
privatized services were: Service quality (61%); lack of cost savings (52%);
improvements in public delivery (43%); problems with monitoring (17%); political
support to bring back services in-house (17%).
 c/o North York Women’s Centre
2446 Dufferin Street, Toronto, ON M63 3T1
info@twca.ca p. 647.235.8575

4) Significant learnings here are:

(i) Contacting out only saves money if there are significant technological innovations
or economies of scale.
(ii) There is no statistical support for cost savings under privatization (water and solid
waste).
(iii) There is more public control if services are public.
(iv) Private firms have incentives to reduce quality to enhance profits – thus careful
monitoring is required and this is expensive.
(v) After an initial competitive bid, the competitive market erodes. Fully 75% of
contracts are given to incumbents without rebidding.
(vi) For most local government services the average number of alternative providers is
less than 2.
(vii) True cost savings will result from engaging municipal staff to improve service
delivery.

In conclusion, I would highlight something that is often forgotten. The people who are most
impacted by a service and those that provide it should be consulted in improving it. In this case,
the city’s solid waste workers, and the city’s women who are the managers in the home. Women
should be consulted on solid waste separation, recycling, composting and collection. This
dialogue can bring much greater efficiencies than might seem at first glance, improve citizen
engagement in municipal issues and will also add to the environmental accountability of the city.

I urge you to take the above considerations into account before you contract out any services of
the city of Toronto.

Thank-you.

Prabha Khosla for

Toronto Women’s City Alliance