Public private partnerships
By now, most Cana-dians are familiar with Paul Martin’s background as a multi-millionaire, tax-avoiding, union-busting, environmental law-breaking steamship line owner who went on to become a social-service cutting, corporate-tax slashing finance minister. Now that he’s realized his dream of becoming Canada’s CEO, Martin’s corporate agenda for the country is being revealed, and it can all be summed up with a little acronym that haunts all public sector workers from coast to coast to coast: P3.
When Martin was sworn in last December, there were many gifts for his corporate backers. One of those gifts came in the form of John McKay, a Member of Parliament from Scarborough. McKay was named parliamentary secretary to the finance minister with special responsibilities for public private partnerships, and he wasted no time in putting federal responsibilities up for sale to the corporate sector. “Affordable housing is one, electric power is another,” McKay said in a press release, “just to give two of several possible examples.”
A few weeks later, McKay elaborated on other P3 possibilities to a Parliament Hill reporter. “The sewer, water, all of that stuff can all be P3ed,” McKay said. “Why does the government have to run a sewage system? Why does a public entity have to own a hospital? Why does a public entity have to finance a hospital?” The new P3 czar, backed by two deputy ministers from the private sector, announced that the federal government’s new $3-billion infrastructure program would be up for bids. To another reporter, he added: “The burden will be on the proponent of a project to demonstrate that a P3 is inappropriate.”
Murray Dobbin, the author of a new book called Paul Martin: CEO for Canada? says the prime minister is anxious to make P3s a big part of his agenda. “There’s no question he’s a proponent of P3s,” says Dobbin. “People are sleep-walking into this, because he’s keeping it under wraps for now. He’s not putting it in his election platform.”
But over the past several years, Martin has been slowly setting the stage for public private partnerships at the federal level. When Martin was finance minister, the Liberal government sponsored a P3 conference and then created a committee to promote P3s. Now, Industry Canada has a Public-Private Partnership Office, complete with its own how-to guide for P3s. “The growth of P3s is being driven by public demand for higher quality services and greater government budget constraints,” the guide says. What the guide doesn’t point out is that Martin was the one who gutted public services in the first place, then used the surplus cash to give corporate tax breaks to his wealthy backers.
Ironically, those wealthy backers are now being hailed as heroes for offering to buy up the services Martin didn’t get around to dismantling as finance minister. But Murray Dobbin says there’s nothing for corporations to lose in these sweetheart deals. “This isn’t free enterprise,” he says. “It’s guaranteed profits with no risk.” He says P3s are a bigger rip-off for taxpayers than pure privatization, because they use taxpayers’ money to generate profits for big business. “It’s the perfect scam,” says Dobbin.
It’s a scam that provincial and municipal governments have been testing out for years, including some of Martin’s most prominent Liberal colleagues. The Liberal premiers of Canada’s three biggest provinces – Dalton McGuinty of Ontario, Jean Charest of Quebec and Gordon Campbell of BC – are all moving ahead on major P3 projects, despite mounting controversy and cost overruns. The budget for BC’s flagship private hospital in Abbotsford has already doubled, and two of the province’s top officials (who moonlight as Martin bagmen) are being investigated by the RCMP for influence-peddling in the $1-billion BC Rail sale. In Ontario, the multinational that owns Highway 407 (a model P3, according to Martin’s government) has been charged with breach of contract for hiking tolls by 200 per cent. And in Quebec, the premier hired Martin’s golf buddy and former neighbour Brian Mulroney to study the implementation of P3 hospitals, despite huge public demonstrations against the Liberal government’s corporate agenda.
In Ottawa, the corporate agenda is evident right in the prime minister’s own office. Eight former corporate lobbyists work in Martin’s office and ten more corporate lobbyists (including the chair of Martin’s transition team) held senior positions in Martin’s leadership campaign. “Canada has a prime minister dedicated to privatization who’s surrounded by people who worked for the privatizers,” says NDP leader Jack Layton. “Under Brian Mulroney, the question was who’s on the take. Under Paul Martin, the question will be who’s on the give – as our public services are given away to Martin’s corporate cronies.”
Martin has even more corporate cronies to please outside the PMO. The new prime minister racked up $12 million worth of favours in his fundraising drive to become leader of the Liberal party. That includes $100,000 donations from some of Canada’s most prominent capitalists – men with names like Irving, McCain, Asper, Schwartz and Pattison. Accounting giant Pricewaterhouse-Coopers, a P3 advisor to Martin’s government, also gave generously to the leadership fund. And last fall, the construction industry that stands to gain millions through P3 infrastructure deals raised $750,000 for Martin in just one night. Most of Martin’s backers say they don’t expect anything in return. But others aren’t afraid to admit they do. Jack Kay, president of Apotex, Canada’s largest pharmaceutical company, told The Hill Times, “You need money to grease the wheels of the political process under our system and this is a way of raising funds and getting an opportunity of pressing flesh.”
Jack Layton says the federal sponsorship scandal – which involved eight ad agencies that donated a total of $650,000 to the Liberal party – should be a warning to all Canadians about what will happen if Martin gets his way with P3s. “If a nod and a wink to Liberal friends blew $100 million on ads, does Paul Martin expect us to believe there are no nods and winks to corporate friends as he pursues privatization? We’ve got Liberals selling to Liberals and Liberals lobbying Liberals and nobody’s looking at the public interest.” And if another sponsorship scandal happens in the form of a P3, we might never know. Auditor-General Sheila Fraser says that private contracts make it impossible for her to ensure accountability in how tax dollars are spent.
Murray Dobbin believes the sponsorship scandal is actually a convenient diversion for Martin from the P3 agenda. “It’s being spun as corrupt crown corporations,” he says, in order to deflect voters’ attention away from the real problem – a corrupt Liberal party with ties to corrupt companies. Dobbin believes the Liberals will eventually point to the scandal as an excuse to privatize publicly-owned services like Via Rail and Canada Post. He also predicts that if Martin wins the upcoming election, the federal government will force municipalities to implement P3s in order to collect transfer payments. “The machine is already set up in that direction, to attach strings to P3s wherever they can,” he says. “It’s one level of government coaching business on how to destroy another level of government.”
According to Jack Layton, a federal P3 program is also the next step towards the destruction of a public health care system. “In British Columbia, private health care is being expanded because, in the words of BC’s Liberal premier, they expect more flexibility from Martin, whose senior BC advisor was a corporate lobbyist for a dozen private BC clinics 14 days before entering the PMO.”
The federal government’s P3 guide says that P3s have to be “bankable”, and for CUPE National President Paul Moist, it’s obvious who’s banking on them – big business. Moist maintains there’s no one better to perform public services than public sector workers, and he says the general public knows it. “No government at any level in Canada has ever won a mandate to privatize public services,” says Moist. “And no poll has ever shown that Canadians favour privatization over public ownership, especially when it comes to vital services like health care.”
National Secretary-Treasurer Claude Généreux agrees. “It’s crucial that we all get involved in the election and raise the troubling issue of P3s with local candidates,” he says.
Paul Martin’s new P3 parliamentary secretary, John McKay, says he’s already selling his privatization plans to large pension funds and merchant banks. “They are ready, willing and able to do business,” he says. That means we need to be ready, willing and able to elect a more progressive government – or, barring that, a more progressive official opposition that is strong enough to take on Martin’s corporate agenda.