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Garbage privatization and trade deals — A trashy way to treat workers

Yesterday, Toronto’s public works committee heard from over 70 witnesses on a proposal by management, endorsed and pushed heavily by Mayor Rob Ford, to privatize garbage collection downtown. The meeting room was packed, mostly with opponents of the plan, which was made public less than two weeks ago, and which contains a request to take the tendering process behind closed doors, out of council’s hands. This abuse of democracy and accountability, and the fact the City’s numbers are clearly exaggerated, created considerable controversy at committee. Far from saving the City $8 million per year as proposed, Toronto resident and economist Hugh Mackenzie showed how wage savings from privatization were closer to $2 million, and that it would be eaten up by the 20 per cent profit margin expectations of whichever firm won the bid. The plan is pure ideology — it is an attack on public services and some of the hardest working people in Toronto. Nonetheless, committee voted 4-2 late last night to approve the privatization plan. It will go to full council in May for a final decision.

I presented yesterday on the trade implications of privatizing garbage collection, or any other public service for that matter. I suggested committee seek an assessment of new inter-provincial and international trade agreements–the Ontario-Quebec Trade and Cooperation Agreement, and the Canada-EU Comprehensive Economic and Trade Agreement–on the procurement for and regulation of garbage collection services. Several councillors were interested to hear CETA’s procurement chapter would ban “buy local” conditions on City tenders, since the City of Toronto puts local preferences into many of its contracts. I said, in part:

Municipal governments have been, until recently, shielded to some extent from global trade rules designed to constrain public policy in order to “free” capital and investment flows. This “free” trade agenda has limited what governments can do to govern economic development, set environmental policy, and provide services to the public. A new generation of inter-provincial and international trade agreements will affect municipal governments in important ways that are rarely discussed until it is too late…

For private firms, the emphasis will always be on security of the investment not security of the service for public users. It’s not uncommon following private tenders for the lowest bidder, who under the proposal in front of you must be granted the garbage collection contract, to quickly demand more money due to allegedly unforeseen costs. Promised savings vanish along with democratic accountability.

The inter-provincial and international trade agreements I mentioned previously compound these problems by further locking in the private firm’s investment in previously public services. They make it difficult to introduce new regulations affecting that investment, while new procurement agreements prohibit municipal governments from favouring local or Canadian content, applying sustainability guidelines to contracts, or fostering fair wage programs. Trade agreements also make it punishingly expensive to re-municipalize failed privatizations in the frequent event of declining service or poor value for money.

We’ll be following up with councillors on CETA in particular as provincial offers, postponed due to the federal election, are now set to go to the EU in mid-May. My deposition encouraged the City of Toronto to follow in the footsteps of those municipalities and school boards which have requested a municipal exemption from CETA, like this one from the Union of B.C. Municipalities:

Moved by Logan Lake, B.C.

WHEREAS the Canadian government has entered into negotiations with the European Union for a comprehensive economic trade agreement;

AND WHEREAS European corporations are insisting on full access to procurement by sub national governments – including local governments, school boards, universities, hospitals and other provincial agencies, which could significantly reduce or eliminate the right to specify local priorities when public money is invested in goods, services or capital projects;


• a briefing from the Province of BC on the scope and content of trade negotiations with the European Union;

• the Federation of Canadian Municipalities to provide sector-by-sector analysis of the potential impacts on local government functions and powers of the procurement regime that the European Union is seeking; and

• the Federation of Canadian Municipalities to urge the government of Canada not to provide the European Union with access to sub national government procurement; and

• that the provincial government negotiate a clear, permanent exemption for local governments form the CETA.

ON MOTION, with amendment as recommended, was ENDORSED and REFERRED to FCM