Their backs against the wall, Canada’s towns and cities are facing a decision that will have profound consequences for years to come. They can invest directly in improving and strengthening vital community services and public infrastructure. Or they can hand over control to corporations eager to develop and operate services for profit.
Municipalities are suffering a funding crisis. As responsibilities outstrip revenues, many local decision-makers find themselves being prodded by federal and provincial governments and pushed by circumstances to look to the private sector to finance and deliver public services.
But the cost of private financing is much higher than public financing, and the cost of private delivery can be greater still as fees rise, standards fall, good jobs are lost and equity is abandoned.
Proponents of privatization have been knocked back on their heels as councils, courts and communities have rebuffed their plans. In BC, the Greater Vancouver Regional District abandoned its plan to develop the Seymour water treatment facility as a public private partnership (P3) after heavy public pressure. In Ontario, a Superior Court judge agreed with CUPE and the Communications, Energy and Paperworkers Union that the Ontario government lacked the authority to privatize Hydro One. And in Calgary, the city council resoundingly rejected the idea that Enmax, the city’s electricity utility, should be sold off. As in the other two battles, CUPE played a key role in averting the privatization.
There have been important victories in many other communities, but the news has not all been positive. Halifax has handed control of its harbour cleanup to the private sector, Alberta is on the verge of approving its first private hospital and the governments of BC and Ontario are pushing P3s for all future hospital development.
Experience around the world and across the street shows that these ventures will increase costs, reduce quality, restrict access and confound accountability. The dismal British record of P3 hospitals and the scandals plaguing Ontario cities that turned to the private sector for financing are two compelling examples to counter the privateers’ propaganda.
International trade agreements may render these decisions not only regrettable but reckless. Under the North American Free Trade Agreement and the General Agreement on Trade in Services, once any part of a service has been privatized the ability of government to control that service in the public interest is severely constrained. And the cost to return it at some future date to public delivery may well prove prohibitive.