The New Brunswick government is pushing P3s for a hospital as well as schools and courthouses, despite the province’s poor P3 track record.
Earlier this month, the education minister announced two new P3 schools. The government also confirmed it will build new courthouses in Saint John and Moncton, and a psychiatric hospital in Campbellton, as P3s.
The ruling Liberals are going ahead with the privatized schools in spite of evidence in its own backyard about the perils of P3s. In 1998, the provincial auditor found the Evergreen School cost $900,000 more as a P3.
Private financing of the Moncton school cost nearly $400,000 more than a public project. And the province is paying another $421,000 over the 25-year deal to lease back land it sold the Greenarm corporation for $275,000.
The variations between the government estimate of $184,000 in savings using a P3, and the reality of $900,000 in added costs led the auditor to suggest the government had overestimated some costs to make the P3 seem more attractive than it actually was.
In 1999 the auditor criticized another high-profile P3, saying that privatizing the Fredericton-Moncton stretch of the Trans Canada Highway was all about keeping debt off the public books. “That one objective drove the whole project,” said then-auditor Daryl Wilson. New Brunswick taxpayers are still paying the price.
New Brunswick isn’t the only province where there’s a strong case for keeping schools publicly financed, owned and maintained. P3 schools caused big problems – and were ultimately scrapped – in Nova Scotia.
In the late 1990s, the Liberal government of Nova Scotia signed a deal to build 55 privately-owned schools that would be leased back in decades-long deals.
In 2000, the incoming Conservative government ended the P3 experiment, after costs increased by $32 million – enough to build three schools. Not only did the schools cost more, they also left the public carrying the bulk of the risk. Communities suffered, as corporations built schools where it suited their bottom line – not children’s needs.
While no new P3 schools are being built in Nova Scotia, the fallout from the failed deals continues. Several disputes have arisen over the complex deals, and have gone to arbitration, adding more costs to the contract.
There’s also growing evidence about the problems with privatized hospitals. In Ontario, P3 hospitals are approaching $1 billion in cost over-runs, and the deals are shrouded in secrecy. Community opposition to P3 hospitals drove the government to narrow the scope of privatization a year ago, and two new facilities – including a mental health facility - are plagued with problems. Community coalitions continue to fight plans to privately finance new hospitals in the province.
Finally, there’s a water fight brewing in New Brunswick. Saint John city council is also considering privatizing upgrades to its drinking water treatment system through a P3, saying it can’t afford to pay for it publicly. Municipal workers, members of CUPE, have joined forces with community groups to keep the city’s water public.