Peter Schiff: There’s no better example of wasteful public spending than the Toronto story

I’m hearing it’s been a good week for public workers everywhere — with Donald Trump’s threat to end all pay raises and municipalities across the country still trying to grapple with the federal government’s decision to freeze transfer payments.

But I’m not so sure about that last one, especially with the question of whether cities should pay for their employees with internal or external money.

Yesterday, the Toronto Star revealed that for a period of four years, political appointees at Toronto City Hall intervened to keep waste haulers from hauling trash out to east-end residential communities.

“Spending on salaries, wages and benefits makes up 72 percent of the Toronto budget,” the Star noted. “Yet since 2014, city officials have used their discretion to give the two private waste haulers awarded contracts with residential contracts three times that rate.”

The result was that the city was spending $2.5 million a year to subsidize hauling costs. That’s a serious amount for any corporation. How much do you think that would cost a city?

Part of the problem appears to be Toronto’s troubling reputation as a city with a better class of workers than the rest of Canada. A City Paper opinion piece reports that Toronto’s unemployment rate is 5.2 percent; the national average is 4.6 percent.

According to the Star, Doug Ford, the new provincial premier of Ontario, was astounded by Toronto’s waste intervention. He questioned “why city officials had to act in a way that is designed to discourage private waste haulers from placing large amounts of refuse on residential property if you want a zero-tolerance approach to illegal dumping.”

Ford, a former Toronto city councillor himself, told the Star that “it’s like a slap in the face to consumers” if city workers interfere with the private sector.

Has he never heard of Wal-Mart?

All told, I believe the actions of council staff in Toronto amount to a subsidy that does more harm than good. Consider that the public-utility costs for doing so account for a mere 10 percent of the spend in Toronto.

It’s hard to see the rationale for forcing a company — a taxpaying, legally constituted, government entity — to compromise its financial independence in order to protect the public interest.

More likely is the failure of elected officials to use their authority to administer city services efficiently. In an article I published this fall, I warned of the lack of planning that occurs at the municipal level, leading to a myriad of problems.

When city officials waste $2.5 million a year to prevent people from throwing their garbage out to private contractors, they show precisely why they don’t know what they’re doing.

Disregarding the voices of private haulers or the concerns of neighboring communities would be bad enough, but it would just be laughable if the waste haulers weren’t the innocent ones that were disadvantaged by that exercise of power.

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