Corporate pushers

The Canadian Council for Public-Private Partnerships (CCPPP) is the umbrella group for the privatization pushers, with its membership list a who’s who of private interests eager to cash in on public services. Couching privatization plans in the language of ‘partnerships,’ the council advocates for legislative and regulatory changes that ease the way for public private partnerships and provides advice and support for those interested in privatization schemes.

The CCPPP’s latest salvo, a series of proposed changes to Ontario laws governing labour relations and municipalities, is an all out assault on public services and public sector workers. The CCPPP’s shopping list would change the Municipal Act to allow municipalities to:

• give or lend corporations property and money;
• guarantee private sector loans;
• extend tax exemptions to privatized services;
• allow municipalities to be more flexible in accumulating or showing debt; and
• allow municipalities to exempt corporations from fees and levies applied to businesses.

The CCPPP also wants to eliminate successor rights currently provided under the Ontario Labour Relations Act, leaving private firms with no obligation to honour workers’ collective agreements. The CCPPP also wants municipalities to remove all contracting out protections from collective agreements. They want to eliminate fair wage provisions by introducing performance pay and profit sharing, and allow successor employers to ignore an employee’s seniority.

This privatization wish list is remarkable not only for its audacity (no doubt anticipating a receptive audience in the Harris government), but also for its seeming admission that the private sector can’t deliver on its promises. P3s were conceived as a way to sugar coat the privatization pill: corporate financing in exchange for control of public services. But now, their proponents want to access public financing and the tax-exempt status of public agencies, while they generate profits without incurring risk. Indeed the CCPPP’s proposed Municipal Act changes would entrench municipal governments as subsidizers and supporters of private sector ventures.

The privateers

There are countless corporations — both home grown and multinational — waiting to take over public services.

Throughout this report they are profiled. MDS and Dynacare are both doing booming business in laboratory testing. MDS stands to reap even greater rewards by underwriting a Calgary private hospital owned and operated by the Health Resources Group. In home care, Olsten, Comcare and WeCare are among the for-profit agencies squeezing out not-for-profit caregivers. In water, Vivendi is positioning itself to dominate the North American water market, with Suez Lyonnaise des Eaux competing with newcomer Azurix for the same market. In social services, Andersen Consulting is making millions ‘reforming’ social assistance programs, all the while missing deadlines and raising its rates.

Consulting and investment firms play a key role in privatization initiatives — sometimes crossing the line when it comes to conflict of interest. In the case of the Edmonton power utility EPCOR, RBC Dominion Securities advised the city that it would earn more by selling the utility and investing the proceeds than it could earn from owning the profitable company. Yet RBC-DS would have been well placed to profit from EPCOR’s sale. An independent study showed it was in fact more profitable to keep the utility public, and EPCOR was not sold. Other global consultants such as PricewaterhouseCoopers and KPMG have also played key roles in advancing privatization.

Playing a supporting role in the ranks of the privateers are pension funds. Privateers are looking to this enormous pool of capital as a means to bankroll privatization initiatives with increasing frequency. Pension fund investment subsidiaries, such as the Ontario municipal employees pension plan subsidiary Borealis, have tax-exempt status that makes them ideal ‘rent-a-pension’ funds for privateers, as shown by Borealis’ involvement in Nova Scotia lease-back schools. New Brunswick public sector pension funds have also been used to help fund the privatized toll highway in the province.

Government pushers

None of these privateers would be in business if it weren’t for governments all too willing to shed their responsibilities to provide public services. Responding to the right-wing clamour to avoid debt, pay down deficits and cut taxes, governments are retreating from public services and handing ownership and operation of these vital supports to for-profit enterprises.

Finance Minister Paul Martin has said he’s willing to look at privatizing everything except health care. Ralph Klein and Mike Harris appear ready to cross even that line. And many municipal officials struggling to provide newly-downloaded services are tempted to sell off valuable public assets for ready cash.

Governments at all levels are contemplating privatization as a way of shedding financial obligations while fulfilling ideological visions about the role of the private sector. And they’re being aggressively lobbied by the CCPPP as well as individual corporations.

Working hand in glove with the CCPPP is Industry Canada. The federal department has established a committee to promote public private partnerships in infrastructure. The committee draws on firms and organizations that are also members of the CCPPP and the Business Council on National Issues, a long-time advocate of privatization, liberalization and deregulation.

Industry Canada has formed this cozy circle of corporate interests with the goal of helping Canadian firms "hone their PPI [public private infrastructure] skills at home to develop a track record that will allow them to compete in global markets."

Surveying Canada’s track record to date, Industry Canada laments that "Canadian governments have lagged behind their counterparts in many other countries in applying the public-private partnership approach to developing, financing and managing infrastructure."

Examples of projects the department lists as ripe for ‘partnership’ are: water and wastewater facilities, waste disposal, education and health facilities, transportation, communications, power generation and energy delivery systems.

Industry Canada’s recommendations to governments at all levels include working with the CCPPP to develop ways to speed up privatization. Not surprisingly, this initiative is not one Industry Canada is heavily publicizing, preferring to operate behind the scenes.

Working with a similar agenda is the Department of Foreign Affairs and International Trade, which is actively promoting the export of Canadian services — with the unspoken proviso that the trade-off will be opening up Canada’s services to foreign corporations. Trade Minister Pierre Pettigrew’s refusal to specifically exempt health care and education from any new trade deals is a clear sign that Canada’s public services are in danger of being traded away.

Federal and provincial funding cuts are another way of pushing privatization, by creating the conditions in which privatization flourishes. As one cut leads to another, the buck stops at the local government level.

Some municipalities push privatization as the way to deal with newly-downloaded service responsibilities in everything from social services to water. Complicit in that push is the Federation of Canadian Municipalities. Once a forum for public sector solutions and ideas, the FCM’s annual conference has become a bazaar for the privateers to pitch their wares to financially-strapped local governments. This trade-show promotion of privatization and P3s spills over into the FCM’s political interventions on infrastructure renewal, which do not rule out P3s for new public infrastructure.

Pushing back

Whether it’s big business doing the pushing, or governments allowing themselves to be pushed, the drive to privatize is far from a universal trend. Instead, it represents the narrow interests of an elite group interested in private gain, not public good. With no united front favouring privatization among politicians and government, the pushers must exploit opportunities in provinces like Ontario, Alberta and New Brunswick, all the while lobbying other governments to hop on the bandwagon and forget their debt woes.

This year’s Annual Report on Privatization is an urgent call to push the pushers off the public services agenda once and for all. With the privateers making incursions into our hospitals, our schools, our water and our social services, the time to act is now. We must match the privateers’ aggressive lobbying with equally vigorous promotion of public sector alternatives. We must continue to scrutinize existing and proposed privatization and P3 schemes. This will amass further evidence that private sector involvement in public services carries too high a cost for our families and our com-munities. That evidence comes not just from Canada, but also from privatization experiments around the globe.

The call goes out most urgently to elected officials from the Canadians they are elected to represent. Those Canadians overwhelmingly favour continued public funding, ownership and delivery of public services. It is from these people that governments and policy makers should begin to feel the push, and its weight in numbers. The agenda of Canadians — and the public services they support — should replace the greedy and short-sighted agenda of businesses intent on privatizing to make a quick buck. It’s time Canadians and the officials they elect started to push back.