Justin Trudeau's embrace of privatization could cost taxpayers billions and lead to further cuts to services like health care, education and Canada Post, among others.
Back in 2014, Justin Trudeau announced that he is a major supporter of Public-Private Partnerships (P3s), a method of using private financing for public projects like highways, hospitals and schools.
In case after case, we've seen P3 projects generate massive cost overruns and fail completely. Billions of taxpayer dollars have lined the pockets of private financiers.
In Public-Private Partnerships, taxpayers take on the risk while the private sector partners reap the rewards. If something goes wrong, taxpayers pick up the tab. If things go right, the public still pays hundreds of millions more.
• Ontario’s Auditor-General reported that a P3 hospital in Brampton cost $200 million more than it would have if it was publicly financed and built
• A P3 project at a Quebec University doubled in cost from $200 million to $400 million
The Liberal government has committed to spending over $120 billion on major new infrastructure projects like highways, public transit, water systems, and housing. Provinces will spend hundreds of billions in the coming years as well. But how will the money be spent?
While P3 groups anticipate a "windfall", Liberals are indicating that a lot of that will go to P3s. Because privatization isn't popular, they're using different words.
Asset recycling, for example, is a new word for the same old privatization. Assets that could be recycled -- which is to say, privatized -- include ports, roads, utilities, office buildings and even defence infrastructure. Liberals have already floated trial balloons about selling off airports.
More recently, Finance Minister Bill Morneau's Advisory Council on Economic Growth, recommended "attach[ing] revenue streams to new and in some cases existing infrastructure" as a way to encourage private investment. These "revenue streams" would include "user fees". That means P3s, even if they don't use that terminology.
On November 14th, Ministers Trudeau and Morneau met with investment firms to pitch their P3 plans. In the background, the same firm that convinced Saudi Arabia to privatize its oil company is helping out for free. Both New Democrats and Conservatives have criticized the use of P3s for infrastructure, the latter somewhat hypocritically. A poll found that only 25% of Canadians support P3s.
As one observer recently put it: "The problem with privatization is that it usually ends up costing consumers more. Various auditors general around the world, including Ontario’s, have made that point when examining public-private partnerships."
The Liberal Party has enjoyed appearing to oppose cuts to Canada Post’s door to door delivery, which many saw as a prelude to privatization. However, they appointed corporate insiders to their Canada Post Task Force, who ended up adopting precisely that Conservative agenda.
Though Public Services Minister Judy Foote has said privatization is "off the table", the Task Force has recommended selling off Canada Post piece by piece, and has rejected proposals like postal banking.
When Chretien's Liberals defeated Mulroney's Progressive Conservatives in 1993, they campaigned on the "red book", a series of promises for modest social spending, environmental reform and economic growth. Once in power, the party took a 180-degree turn.
They went on to eliminate 40% of federal program funding and cut $4 billion from transfers to provinces in the name of "slaying the deficit".
The cuts slowed economic growth by a whopping 3.5 per cent and threw Canada’s health care system into crisis. Hospital beds were reduced, and many doctors went south. The result is creeping privatization and a two-tier system: better care for the rich, longer wait times and fewer beds for everyone else.
Paul Martin’s austerity cuts benefited corporate investors at public expense, and were unnecessary. A CIBC Wood Gundy report found that without the cuts, stronger economic growth fuelled by well-paying jobs would have cut the deficit by just as much. (Find out more at www.uniteagainstausterity.ca.)
The group that has had the most success pushing the austerity agenda is the Business Council of Canada (formerly the Canadian Council of Chief Executives). Today, their President and CEO is former Liberal Cabinet Minister and 2003 candidate for the party's leadership, John Manley.
Sign today to send Ministers Trudeau, Morneau and Foote a clear message.
To Justin Trudeau and senior Liberal advisors:
Public Private Partnerships and other forms of privatization mean that we pay more and get less; they are corporate cash grabs at our expense. We demand that you renounce privatization and support efficient, quality public services that work in the public interest.