CUPE has intervened in a review of how governments and public sector organizations report P3s on their financial statements. CUPE is calling for rules that put transparency and the public interest first, and don’t tip the scales in favour of privatization.
For nearly three decades, P3 promoters and pro-privatization governments have used accounting tricks to try and hide the costs of privatization. CUPE is fighting this secrecy and calling out accounting rule changes that favour corporate interests. We’re demanding that all details of public-private partnership (P3) deals be made public.
The Public Sector Accounting Board (PSAB) is developing a new P3 accounting standard that will apply to all levels of government. Accounting can be highly political. Numbers can be manipulated, and the rules can be twisted to favour decades-long privatization deals with corporations to finance, operate and maintain public facilities for a hefty profit.
Right now, Canadian public sector accounting guidelines don’t set rules for reporting P3 contracts and future payments. P3s are a black hole for transparency and accountability. Governments can report as little or as much as they want, with no consistency.
A fair set of rules would be a major improvement. But the P3 industry is mobilizing for rules that favour privatization. The Canadian Council for Public-Private Partnerships encouraged P3 promoters to submit a form letter to the PSAB.
Billions being spent on P3s
Governments are spending billions of dollars in public funds to pay for privatized P3 projects like hospitals, schools, water and wastewater plants, and transit systems. Canadians have a right to know how public funds are spent. CUPE is calling for standards that hold governments accountable for the true costs of privatization.
The PSAB’s proposed accounting rules downplay the debt associated with P3 projects, making the public books look better in the short term. This could encourage governments to step up their use of P3s. Canada is already facing a P3 debt bomb, with governments locked into expensive P3 contracts that last for 20 or 30 years.
In 2017, our union took part in the first round of consultations on these accounting rules. Our concerns were not heard. In February 2020, CUPE shared our concerns again with the PSAB, outlining what fair and transparent rules would look like. Our union is not alone. Other experts and organizations made submissions calling for accounting rules that shine a light on the true costs of P3s and provide an accurate picture of the long-term debt that governments take on with P3s.
Closing the book on privatization
Representatives of consulting and law firms that profit from P3s are well represented on the PSAB P3 task force, and the PSAB itself. A KPMG representative chairs the P3 task force. KPMG is a consulting firm deeply involved in the P3 industry, including as a member of the CCPPP. CUPE is calling on the task force and PSAB to ensure those who profit from the P3 industry don’t benefit from the rules at the public’s expense.
Canada has one of the world’s largest P3 markets. Our country also has one of the world’s weakest legislative, accountability and transparency regimes for P3s. CUPE knows P3s are a bad deal for Canadians, and we will keep fighting them. It’s time to close the book on these privatization schemes once and for all.
PSAB is now reviewing submissions on the P3 accounting rules and will issue a final standard in the coming months. The new accounting standard is expected to apply after April 1, 2022.
- Read the full submission (available in English only)