Exclusive: C.D. Howe Institute Paid by Private Garbage Companies to Support Privatization in Toronto
In the U.S., Tea Party movements are incensed that several “socialist” municipalities are switching to public garbage collection. In Toronto, a right-wing Canadian government is going the other way and attempting to privatize garbage collection.Toronto’s garbage collection already costs 30% less than the Ontario average, which is further evidence that this is a manufactured debate. There are some convenient and conspicuous gaps in the current “debate.” This is true despite Friday morning’s Globe and Mail, which featured an op ed by C.D. Howe Institute researcher Benjamin Dachis, who unsurprisingly favours “competition.” Dachis is the author of the C.D. Howe study which everyone is now citing as “proof” that private garbage collection saves money.
What the media has neglected to tell us is that the C.D. Howe Institute’s report was funded by the Ontario Waste Management Association, a lobby group made up of private garbage companies. It would be nice if the media, you know, did its job, instead of leaving it up to me. I can’t find a single mention of this rather important fact anywhere in the coverage, although maybe it’s out there somewhere. Instead, people are trusting the C.D. Howe Institute when it says, on its website, that it is “independent” (a common deception by think tanks).
The media, for the most part, has sided with the employer (the city) over the employees (the garbage collectors). The theory is that private garbage collection is cheaper than public garbage collection. Now, there are real problems here. This article in the Globe & Mail is an example of all that’s wrong with the contemporary media, wandering aimlessly back and forth between anecdotal evidence about complaints in union-run York and hard evidence that residents in Etobicoke, where garbage collection is already private, are 2.5 times as likely to submit a complaint to the city about garbage collection.
Toronto could tell us what the relative costs are, too. They have a private system in operation in parts of the city like Etobicoke. And they have a public system elsewhere. They could tell us what it costs per tonne to haul away trash under the different regimes. Strangely, statistics haven’t been published since 2002, according to the Toronto Sun. In that paper, Sue-Ann Levy claims that the estimate cited by CUPE is $79 per tonne in the public areas, compared with $81 in Etobicoke and $87 in some nearby cities that also have private collection. Levy doesn’t believe CUPE’s figure because it comes from the union. She seems more prepared to accept the Ontario Waste Management Association‘s estimates for Etobicoke, even though the OWMA is a private-sector lobby group whose members (private garbage companies) have an obvious interest in building a case for privatization. Levy isn’t the only one who fails to inform her readers that the OWMA is an industry lobby owned by private-sector garbage companies eager to buy their way into Toronto. Rob Granatstein commits the same sin.
Into this gap steps the C.D. Howe Institute with its September 2010 study, Picking Up Savings. Dachis is a researcher at the C.D. Howe Institute; he’s the one responsible for the garbage study, as well as for the Globe & Mail article. Now, the Howe Institute is a business-dominated organization in general. As a rule I find it a little more trustworthy than the Fraser Institute, but that’s not saying much. On the back page of the garbage report, the Howe brags that it produces “independent, nonpartisan research,” as well as noting that it is a registered charity, so that your donations are subsidized by the government in the form of tax deductions. Picking Up Savings gives no indication of why it was published. We are left to assume that sometime in mid-2010, the C.D. Howe Institute decided to produce it just out of the good intentions of their independent, nonpartisan hearts.
Unfortunately, their main partner in this gambit accidentally gave the game away in a letter to members last year. Prior to last year’s Membership Information Meeting, the Ontario Waste Management Association bragged that:
OWMA has provided $50,000 funding support to the C.D. Howe Institute and University of Toronto (Economics and Law) to complete independent 3rd party research on the issue. Research underway with a report to be released in early September — link to municipal election cycle.
Report will focus on the cost differential between in-house and contract servicing, the competitiveness of private sector bidding, and the preferred service delivery model for EPR programs.
The Ontario Waste Management Association technically includes all garbage collectors in the province — it has, for instance, a long list of member municipalities. Nevertheless, its website makes clear that it is “the voice of the private sector waste industry in Ontario,” and that it is dedicated to “enhancing business opportunities for members.” The Board of Directors consists almost entirely of executives from private waste companies, like Chairman Jim Graham, CEO of TRY Recycling; Secretary Cal Bricker, Vice-President of Waste Management of Canada Corporation; and Director Sean McCutcheon, assistant general manager at Wasteco. Two of the 17 board members do come from cities (Peel and Barrie), but this is still an industry trade association.
In this case, it would seem that the Ontario Waste Management Association got what it paid for from the C.D. Howe Institute: a study arguing that private-sector competition for city garbage contracts is a good idea. It was even released “on time,” prior to the November elections. Oddly enough, the OWMA doesn’t seem happy about that, because I can only find the one reference to this commissioning of the study on its website. It’s almost as if they don’t want people to know they paid for the study, in case it casts doubt on the “independence” of the C.D. Howe Institute.
Now, what you want to make of the Howe study is up to you. The fact that it just happens to say what its backers will profit from could be a coincidence. The fact that it needs to resort to a strange and arcane regression analysis instead of just correlating private-sector garbage collection with lower costs per tonne could also be a coincidence (Relentlessly Progressive Economics doesn’t think so, since he doesn’t think there is a correlation). But personally, I think the most relevant fact missed by the media is that it was bought and paid for by a waste industry trade association.Tweet