Less trash means more cash for Calgarians
by Lindsay Tedds, Preston Manning and Jim Dinning
It’s easy to put our garbage at the curb and forget about it. But waste management isn’t free: we always pay for it, one way or another, sooner or later. Maybe it’s through monthly fees. Or maybe it’s higher property taxes down the road, like when Calgary needs to build a new landfill (at a cost of more than $1 billion). Maybe it’s other, less tangible costs, such as the smells and sounds and even environmental risks from new landfills.
There is, however, an alternative. A new report from Canada’s Ecofiscal Commission argues that Calgarians can save money by shifting to a “pay-as-you-throw” approach for residential garbage collection (or PAYT for short). PAYT programs create a direct link between how much we pay and how much garbage we generate.
Calgary’s city council is already on the right track by considering PAYT, yet the proposal they considered earlier this year may not go far enough.
Let’s start with how PAYT works. Rather than paying for garbage collection through flat monthly fees or property taxes, PAYT programs charge households based on how much garbage they generate. Some PAYT programs require households to pre-purchase tags for each garbage bag put at the curb; others charge households more for bigger garbage bins and less for smaller ones. Households don’t necessarily pay more under PAYT: the shift can enable a reduction in property taxes.
Shifting to a PAYT program in Calgary makes sense for two reasons.
First, it can encourage households to divert more waste from landfill, saving money in the process. By giving residents an incentive to make better use of the city’s programs for recycling and organics, PAYT could help extend the life of Calgary’s landfills and defer the need to build an expensive new one.
These savings can be significant. A PAYT program in Beaconsfield, Que., helped reduce landfilled waste by a staggering 50 per cent. And because garbage trucks spend less time on their routes, the city saves about $200,000 each year in operating costs. Closer to home, the City of Saskatoon estimates the combination of PAYT and organics collection could extend the life of its landfill by an additional 23 years, saving taxpayers about $5 million each year.
Second, PAYT is a fairer way to charge for the service. Calgary’s current approach combines monthly fees and property taxes, where households pay the same amount regardless of how much garbage they generate. As a result, households that generate less waste end up subsidizing those that generate a lot. With PAYT, those that generate more waste, pay more.
The benefits of a PAYT program in Calgary, however, ultimately depend on how the policy is designed. Programs that provide more flexibility offer larger benefits. Beaconsfield’s PAYT program has succeeded partly because households pay less when they don’t put out their garbage cart for collection. This gives households more options to avoid paying the waste fee by diverting more.
The PAYT proposal previously considered in Calgary is an improvement but ultimately lacks full flexibility. Under the proposal, households would pay a monthly fee based on the size of their garbage bin, so that generating more waste would require buying a larger bin. But whether households put out their bin once every two weeks or once every two months, the fee would be the same.
A more efficient approach rewards households that put their cart out less often. This would require slightly more expensive bins and scanning technology, but the bigger benefits from saved landfill space make the upfront cost worth it. That approach is also more fair: those that produce less waste, pay less.
Calgary is on the right track in exploring PAYT to make its waste management system more efficient. But let’s ensure we design the system to fully realize these benefits. For Calgarians, that would mean less trash and more cash.
Lindsay Tedds is a member of Canada’s Ecofiscal Commission and associate professor and scientific director, fiscal and economic policy, School of Public Policy, University of Calgary. Preston Manning is the founder of the Manning Centre and the former leader of the Reform Party of Canada. Jim Dinning is a former Alberta treasurer. Manning and Dinning both serve on the Ecofiscal Advisory Board.