Public interest vs private profits

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 Who's pushing privatization?...

"The people pushing privatization the hardest are the ones who stand to gain most from it. They make extravagant promises to hide the fact that they are actually promoting their own interests. Promised savings materialize, if at all, only rarely. There are, however, real costs and these are usually borne by workers, in lost jobs or lower wages, and by consumers, in reduced levels of service. Whether it is so-called 'partnerships' or outright privatization, the pattern is the same: the benefits accrue largely to the corporations promoting them."

Prof. John Loxley, Economist, University of Manitoba

"The value of quality home care is that many people prefer to be at home if the proper supports are there. It’s the safest place to be once you’re on the recovery track. But if you don’t put the proper resources into it, home care becomes a nightmare."

Ross Sutherland, Nurse, Victoria Order of Nurses (VON), Kingston ON, CUPE 3932

"Any home care program must cover homemaking as well as nursing. If you’re 90 years old with osteoporosis, you’re going to break ribs when you bend over to vacuum. But I fear the province is moving to just covering nursing in home care. The homemaking is easy to no longer cover and privatize. That means it’s going to fall to families, and especially women, to do these tasks. Or they’ll have to pay for it."

Kim Schneider, Home health aide, Weyburn SK CUPE 4110

"They’re bleeding our schools to death in Truro. When you close an elementary school in an old part of town, what will it do to the sense of community and to the housing stock? Eventually people won’t want to live there anymore. That’ll affect things like property tax and the town’s ability to fund services. It’s a spiral effect."

Bill Mills, Truro Mayor and parent of 7 children

"[Youth] can challenge the privatization trends. They are not beyond our input or control, even though governments might like us to believe that. The recent protests against the WTO in Seattle, and around the world demonstrate that young people are aware of what's going down. We know that tax cuts don't benefit us and that privatization will make it tougher for us to get our feet off the ground. And we're willing to fight these trends."

Kate Laxer, York University graduate student and student activist

Report highlights

Who’s pushing privatization?

It’s a billion-dollar question with a clear answer. Corporate interests are pushing hard to gain control of the public services Canadians rely on. Eager to reap the huge profits from hospitals, schools, roads, water, libraries and other public services, these corporate carpetbaggers are pressuring governments to surrender ownership and control of these vital services.

This small but powerful business lobby stands in stark contrast with what Canadians believe about public services. Poll after poll shows Canadians want well-funded, publicly owned and operated services, and have grave concerns about the fallout from privatization when it comes to quality, access and accountability.

A survey of decision-makers in business, public life and the media confirm the gulf of opinion on privatization is widest between Canadians and corporate leaders. The interviews, commissioned for this report, confirm that business leaders are the least concerned about the consequences of privatization and the most impatient for a further sell-off of public services. Journalists more closely mirrored the attitudes of the public as a whole, displaying the highest level of support for public services and greatest concern about the consequences of privatization.

Sandwiched in the middle are political figures who see the social value of public services but have painted themselves into a financial corner by heeding calls for tax cuts and debt reduction. Governments at all three levels are feeling trapped. The federal government started a chain reaction of funding cuts that is causing serious harm nationally, provincially and municipally. One of the most immediate threats is Alberta Premier Ralph Klein’s private hospital plan — a scheme that will have nation-wide repercussions for Medicare.

The pushers come from across the business spectrum. Under the umbrella of the Canadian Council for Public-Private Partnerships and a host of lobby groups and think tanks, these corporate pushers pressure governments to surrender public services. With profit as their only motive, the pushers are quick to downsize, downgrade and dismantle services once they are in private hands.

Pipe dreams: Water for profit

Huge water multinationals have targeted North America as their next big market and they have already made inroads in Canada. Hiding behind the soft sell of ‘partnerships,’ they hope to tap into huge profits, owning and controlling Canadian water systems.

The water cartel has created havoc in England, France and around the world with an ever smaller number of companies controlling an ever larger share of the world’s water supply. Wherever water services fall into private hands, prices rise, promised improvements in service evaporate, environmental and health problems increase and accountability vanishes — all while corporations pocket hefty profits.

Public treatment and delivery of drinking and waste water is under threat in Canada as municipalities buckle under the weight of funding cuts and downloaded responsibilities. Local officials hoping to upgrade infrastructure — or build where none exists — are being courted by private sector ‘partners’ all too willing to take on lengthy service contracts to gain a foot in the door toward all-out privatization. For cash-strapped municipalities, the promise of ready financing can outweigh the higher costs and increased risks. With billions of dollars needed for infrastructure renewal, the federal government has a key role to play in averting water privatization by initiating a new national infrastructure program that funds publicly owned and operated infrastructure.

If water services fall into private hands, Canadians may well lose control of this precious resource forever.

Home care: Sold to the lowest bidder

The fast-growing field of home care is in danger of being overrun by private for-profit corporations that are underbidding community caregivers. The Ontario government has turned home care into a commodity to be delivered by the lowest bidder with no consideration for quality, accessibility or continuity of care. Non-profit providers are being driven out of communities they have served for decades.

Those counting on home care are among the most sick and vulnerable. Evidence is mounting that private home care does not meet their needs. High turnover of caregivers working for low wages in extremely poor working conditions threatens the continuity and quality of care. The competitive bidding process is costly, siphoning money that could go to public care. And fraud is prevalent among for-profit providers, including home care giant Olsten, which recently settled a multi-million dollar fraud suit in the United States.

We urgently need a comprehensive national home care system. As Canadians are being released from hospital ‘quicker and sicker,’ the strain on families mounts, in particular on women who typically care for the sick on top of everything else. Canada’s patchwork system of home care leaves many with hefty bills for prescription drugs that would have been provided in hospital, as well as new user fees for other medical supplies. There are no standards across the country. As we grow more reliant on at-home care, the need grows for a publicly delivered, publicly funded home care program.

Corporate schools

A scheme to build new schools through public private partnerships is bad news for Nova Scotians. The former Liberal government’s decision to allow private firms to build and own all the province’s new schools has been an expensive exercise in dodging debt.

The schools, which are leased back by the province over 20-year periods, cost the public more than if the province financed and owned the schools themselves. While avoiding debt, governments are saddled with long-term lease obligations that reduce their options while increasing their risk. Auditors general have criticized the accounting gymnastics that accompany P3 schools, exposing the higher costs.

In addition, corporate interests have contaminated school site selection. While developers have now been eliminated from the site selection process, numerous schools have been built under a cloud of community anger. Local schools in perfectly good condition have closed, leaving children with lengthy bus rides to new mega-schools.

With the new Conservative government accounting for the full cost of some schools up front, P3 schools no longer hide debt. But they remain an expensive and irresponsible way to provide our children with the education facilities they need.

Privatization on a global scale

Despite the failure of the World Trade Organization conference in Seattle, it’s full steam ahead when it comes to free trade in services. The WTO’s pre-programmed agenda, set well before Seattle, includes a new round of talks to expand the General Agreement on Trade in Services.

Those pushing for freer trade — Canada, the US, the European Union and Japan — want to see all services up for negotiation all at once, to allow foreign corporations to set up private hospitals, schools, universities, colleges and other public services.

If the GATS is extended to cover public services — and Canada isn’t doing anything to stop it — corporations will have legally enforceable rights to set up private services and demand public funding for them. Governments will lose their ability to regulate and set standards. For-profit services will abound, and the process will be difficult if not impossible to reverse.

Privatization’s public consequences

Shrinking public funding is creating crises on many fronts. Severely reduced public spending on infrastructure over the last 10 years has left Canadians with decaying services in desperate need of upgrading — and vulnerable to privatization.

Those spending cuts have also meant job loss. While the population continues to grow, public sector employment has fallen, hurting most the economies of smaller and rural communities. Permanent public sector jobs that can support a family are replaced by predominantly non-union, lower wage jobs in the private sector.

Privatization hits young people particularly hard, reducing access to public services and decent, full-time work. The public sector jobs lost to privatization are jobs that young people will never hold, making their economic future increasingly bleak. And as privatization erodes services, young people are left to face a future of social insecurity.

Private services mean rising costs for Canadian families through user fees and out of pocket expenses. Families are paying more for health care and education as services are eroded, funding is cut and programs disappear. This is a dangerous trend that will create greater inequality in Canada. Privatization means Canadians may no longer enjoy public services unless they can afford to pay for them. Access to services is particularly threatened for seniors and low-income families already struggling to meet their needs.

Pushing public services

There is a strong case for public reinvestment in public services. Mounting evidence from Canada and around the world shows private, for-profit services are an expensive and ultimately destructive choice. To let services wither and die is equally destructive for Canada’s economy and quality of life. The need for new public funding to strengthen public services is urgent.

Reinvesting in public services and public infrastructure will create new jobs that will help sustain a generation of young workers. It will also strengthen a network of services straining to serve Canada’s aging population. Renewed investment in public services will help alleviate poverty and build healthier communities. None of these goals are priorities of for-profit services.

There are numerous examples of public sector success stories where innovation and new approaches lead to better quality services, environmentally sustainable ‘green’ jobs and a stronger social safety net. Public works best for Canada’s future.