A trial in a lawsuit between the City of Winnipeg and its former waste collection contractor, involving allegations of breaches of contract and unfair penalties amounting to tens of millions of dollars, drew to a close on Friday.
Emterra Environmental, which provided garbage, recycling and yard waste pickup services from 2012 to 2017, argues the city failed to provide complete data about households needing recycling collection, provided inferior carts, unilaterally changed the scope of its contract and imposed unfair penalties.
It filed a lawsuit in what was then called Court of Queen’s Bench in 2018, initially seeking $67 million in damages.
Lawyers for the city said in court Friday the total damages Emterra is seeking add up to approximately $57 million, which they nonetheless argue the company is not entitled to.
The city filed its own counterclaim against Emterra, denying the company is entitled to any compensation and accusing it of failing to fulfil its obligations under the contract. That countersuit is seeking $9.8 million.
The first part of the trial began in January and ran for eight weeks, with numerous officials and experts testifying for both the city and the company. Closing arguments in the case began on Thursday and concluded Friday.
Thor Hansell, representing the city, told Justice Candace Grammond that Emterra was responsible for setting up its own data collection system but was unprepared to take on the work, with insufficient vehicles and drivers.
“Emterra is fully responsible to comply with its bid,” Hansell said.
“The fact that it underestimated, misjudged or did not investigate, or felt it had insufficient time to determine what might affect the scope of work, does not entitle it to any relief.”
Problems with Emterra’s service, including missing pickups for entire lanes, streets and areas of the city, began immediately after the start of the contract, Hansell said.
During the trial, the court reviewed video evidence taken by residents and local media, showing Emterra workers improperly handling and damaging carts.
Hansell says city staff devoted considerable time and resources to addressing complaints from residents, which he argued justified the penalties it imposed on the company, as it agreed to in its contract.
Contract obligations
While Emterra’s bid on the contract was millions of dollars lower than all others, Hansell said the company did not account for penalties due to damaged bins or missed pickups, despite the fact it was using new trucks it had never used before.
Hansell said the city cannot be blamed for not providing data on every household requiring pickup, because that was not part of the contract, and it was Emterra’s responsibility to set up its own data collection system.
Emterra’s lawyers argued in response that many of the issues cited by the city were the result of its failure to meet its obligations under the contract.
For instance, the two parties argued over whether it was appropriate for the city to penalize Emterra for workers tipping recycling carts into the trucks manually, rather than using the automatic grabbers attached to the vehicles.
Emterra claims it had received verbal instructions from the city to do the work manually in order to speed up collections, which had fallen behind. The company blamed the delayed pickups on problems with the data format of files provided by the city.
“Manual collection was a necessary evil to get the work done, thanks to that dirty data,” lawyer Amanda Verhaeghe said.
Justice Grammond did not know when she would reach a decision in this case.
This is not the only lawsuit Emterra has filed against the city.
A separate suit filed in 2022 is seeking up to $6 million for deducted payments and unpaid bonuses. No date has been set for that trial to begin.
Miller Waste Systems and GFL Environmental currently hold the city’s garbage and recycling contracts.
Those contracts are coming to an end in 2027.