Is it the City of Toronto's Job to Police Working Conditions of its Contractors?

Yesterday, Toronto’s Council voted overwhelmingly to add new checks and balances on what happens to City work that is contracted out to private businesses.
The move is another in a growing series of losses for Mayor Ford, who seems to have lost the support of Council.  The Mayors’ Ford (Rob and rookie Councillor Doug) campaigned on a promise to contract out everything that wasn’t nailed down.  But the majority of Councillors believe that the City has a responsibility to ensure that the working conditions of employees performing work for the City are decent.  That requires the City to ask some questions about the bidding contractors.  The motion yesterday puts that responsibility ultimately with the elected politicians.  Ford and his dwindling number of allies would prefer the elected Councillors not be involved in vetting contractors for working conditions.
[In the typical fashion of the Ford camp, rather than accepting the vote as a democratic expression of the elected Council, Doug Holyday sulked and fumed yesterday, complaining that the citizens of Toronto shouldn’t vote for people who have concerns for working conditions (Holyday tells voters not to elect activists).  The Ford people seem to believe that because about 24% of Torontonians voted for Mayor Ford, that it is somehow illegitimate for the elected Councillors to make any decision that goes against Ford.]
Here is the background paper to the Motion, prepared by Councillor Ana Bailao.
The issue here is whether the working conditions at a private business should be left to the sole responsibility of the contractor and the legislative enforcement machinery, or whether a government should use its clout in awarding lucrative contracts to oversee and pressure the contractors to treat their employees at a high level.
What do you think?  Should the government use its procurement powers to insist on high labour standards, or should it simply award the contracts to the lowest bidder in order to save tax dollars?