Not to add fire to the $17/hr vs. $25/hr debate; but when the City of Etobicoke contracted out the services, they city saved more money beyond just the average salary. The contracted services uses 1/2 the number of workers too !
Here's an article from 2007 about what happened when the City of Toronto decided to bring back garbage collection in-house for York.
http://www.owma.org/db/db2file.asp?fileid=523
edit:
Toronto STar article says contracted workers get about $18/hour and does a comparison of benefits, etc.
http://www.thestar.com/news/gta/article/655607
TURTLE ISLAND WASTE COLLECTORS
Pay: Varies depending on the kind of truck you drive and bonuses, workers say. One worker makes $23 an hour, while another said his base wage was $18 an hour, but that he typically makes around $21 with bi-weekly bonuses. Bonuses are based on how much weight he lugs and whether he gets to work on time.
Hours: Four-day week. One worker says he usually works 12-hour days.
Benefits: Include health care, dental and eye care.
Sick days: Unpaid. There are no bankable sick days.
Overtime: According to one worker, overtime pay does not begin until after 50 hours.
CITY OF TORONTO WASTE COLLECTORS
Pay: $25.11 an hour for drivers or loaders of solid waste, up 2.75 to 3.25 per cent annually since 2005.
Hours: Four 10-hour days a week.
Benefits: Extended health includes dental care, life insurance, eye care and physiotherapy.
Sick days: 18 sick days each year; unused days can be banked and cashed in on retirement, subject to certain limits.
Overtime: Time-and-a-half