Governments could run things more efficiently, perhaps, if they only had the service in mind, but you have to figure in union effects. That means no easy allocation of resources, pensions, oversight, need to accommodate many different interests within government, etc. So in the end, it can be cheaper for a for-profit or a non-profit to run rather than a gov itself.
I don't see why that's a problem. Your comment basically reads: "Governments could run things more efficiently, perhaps, but you have to figure in that they'll treat employees with a minimum level of respect and dignity".
Unions and pensions and oversight are good things that help ensure people are treated fairly (or at least, better than they otherwise would be). I want my tax dollars spent giving locals a decent retirement, and not going into some California VC's portfolio.
And "no easy allocation of resources" strikes me as a good thing as well. This is public infrastructure. People depend on this for their daily lives. The last thing we want is for it to be easily unallocated.
The US versions of unions (not speaking to Canadian unions) are very antagonistic and not so much cooperative that means they will drive the department into the ground before they acquiesce to anything.
So for example, if the demographics of the community change such that transportation needs change, or technology changes (automation of many kinds) meaning fewer employees needed or different kinds of employees are needed, it becomes hard to reflect those needs in the workforce because of the union agreements.
