Picking Up Savings: The Benefits of Competition in Municipal Waste Services

24 Pages Posted: 3 Oct 2010

Date Written: September 9, 2010

Abstract

Cities save money through competitive tendering of waste services contracts. This study 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. The study shows that where city employees provide the bulk of waste services, such as in Toronto (and many other cities 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.

Keywords: Urban Issues, competitive tendering, waste services contracts, Ontario, municipalities, contracting

JEL Classification: H76

Suggested Citation

Dachis, Benjamin, Picking Up Savings: The Benefits of Competition in Municipal Waste Services (September 9, 2010). C.D. Howe Institute Commentary No. 308, Available at SSRN: https://ssrn.com/abstract=1685272 or http://dx.doi.org/10.2139/ssrn.1685272

Benjamin Dachis (Contact Author)

C.D. Howe Institute ( email )

67 Yonge St., Suite 300
Toronto, Ontario M5E 1J8
Canada

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