OTTAWA – “In the wake of the financial crisis, it’s clear public private partnerships make even less sense than before. They’re riskier and more expensive than ever. And their complex structures can delay the much-needed boost Canada’s economy needs right now,” said CUPE National President Paul Moist, responding to Finance Minister Jim Flaherty’s keynote address at today’s Canadian Council for Public-Private Partnerships conference.
See also CUPE BC, the Council of Canadians and the BC Health Coalition’s joint response to Premier Gordon Campbell being named a “champion” of privatization
Yet the federal government continues to pursue privatization through P3s – both in last week’s throne speech, and at today’s conference. Flaherty confirmed that the government’s secretive and unaccountable privatization agency, known as PPP Canada Inc., will be up and running in 2009.
As the world watches an unprecedented bailout of Wall Street and European banks, opening up Canada’s public services and infrastructure projects to private financing and operation makes less sense than ever.
The growing list of P3 failures in Canada and abroad confirms that Canadians need to take a new approach to funding our growing infrastructure deficit. “There is a way out of this crisis,” said Moist, “but P3s are not the roadmap. The government needs to stimulate the economy with public investment in infrastructure – not lock Canadian taxpayers into overpriced and risky business deals that will only benefit the private sector.”
“While the financial crisis has exposed some of the problems with public private partnerships, dubious accounting and ‘value-for-money’ calculations continue to conceal the real costs and risks of P3 projects,” said CUPE economist Toby Sanger. “The failures, public bailouts and high costs associated with P3s in Canada will only continue to grow.”
“In fact,” added Sanger, the P3 model is based on the same flawed economic principles that caused this financial crisis: privatization, deregulation, insufficient public investment and responsibility, and a cover-up of excessive risk in the financial industry.”
“Despite what certain politicians and private companies will tell you, there is absolutely no foundation in the claim that the private sector is better at managing risk than the public sector. P3s are privatization, pure and simple. Public services are – and have always been – best financed and delivered by the public sector,” said Moist.
- See also CUPE’s backgrounder on P3s and the financial crisis