Winnipeg’s private garbage contractor is facing $400,000 in fines for not meeting service targets in the month of November alone. While some will point to this as a failure of contracting out, it actually demonstrates the fact that contracting out hedges against poor performance. Not only do the fines give the company the incentive to get its act together, but it also ends up creating further savings vis a vis publicly provided collection services. As I argued in the National Post when Toronto’s newly privatized garbage collection service had some initial problems (which were quickly resolved), this little hiccup illustrates precisely why contracting out services can be a good idea. If a publicly provided collection service provided poor service, no one would face any repercussions. If a privately contracted company provides poor service, it faces fines. The contractor will sort things out, and taxpayers will save more money. While it is good to see that the media is holding the company to account, this certainly doesn’t undermine the case for contracting out garbage collection.