Disclosure of court documents relating to Ontario’s first privatized hospital show that the McGuinty Liberals knew that the deal with a private consortium could cost as much as $300 million more than under public financing and administration.
The revelations came after a group of health care unions and the Ontario Health Coalition (OHC) won a court order forcing the disclosure of the financial arrangements between a private hospital consortium and the provincial government pertaining to Brampton’s William Osler Health Centre deal.
The Royal Ottawa Hospital and the Osler were first negotiated by the Eves government, and later finalized by the McGuinty government, despite opposition to the deals during the 2003 election.
Lewis Auerbach, a former director with the Office of the Auditor General of Canada, said the P3 arrangement for Brampton’s hospital may be “much poorer value for money than a comparable project done in the traditional public non-profit. Auerbach estimates that the comparable cost of a public hospital was overestimated by at least $300 million, and perhaps $400 million, to make the P3 project look viable.
“So far, the Brampton P3 has had cost increases, space decreases, flexibility decreases—and all of this with little transparency in the various early stages of the project. Indeed, the Brampton P3 hospital may not only cost more, it may also end up providing a lower level of service. A risk that will increase in the latter stages of this 25 year project,” said Auerbach.
Steven Shrybman, who represented the unions and the Ontario Health Coalition (OHC) in court said, “the structure of the scheme compromises the ability of the hospital board to meet the needs of patients where these conflict with the interests of private investors. This, in turn, is likely to compromise the board’s ability to ensure that hospital services are allocated in a manner that is consistent with the requirements of the Canada Health Act.”
Ontario Public Service Employees Union (OPSEU) president Warren (Smokey) Thomas said that, “P3 projects are thoroughly discredited and in decline in almost every jurisdiction, so we wonder why the Ontario government is continuing with these risky and expensive hospital projects. Hospitals built in Ontario should be fully owned, financed and operated by the public sector.”
Michael Hurley, the president of the Ontario Council of Hospital Unions (OCHU/CUPE), called on the McGuinty government to impose an immediate moratorium on all further long-term P3 hospital projects until the provincial auditor has a chance to review this and other relevant documentation.
“The government must explain why they signed the Brampton P3 hospital deal when they had, for 13 months prior to financial close, an independent consultant’s report that implied that its cost could be up to $300 million more expensive than a public sector comparator.”
The group is asking the McGuinty government to disclose the remaining secret portions of all the P3 hospital deals it has signed, including the details of assessments of the successful bids with public sector comparators and value for money benchmarks.
The court challenge was initiated by the Ontario Council of Hospital Unions (OCHU/CUPE), the Ontario Public Service Employees Union (OPSEU), Service Employees’ International Union local 1.on (SEIU), and the Ontario Health Coalition (OHC), as part of their four-year fight to gain access to information about the private hospital deal.
For more information, please contact:
Lewis Auerbach and Steven Shrybman 613-858-6842
Natalie Mehra, OHC 416-230-6402
Stella Yeadon, CUPE Communications 416-578-8774
David Cox, OPSEU (français) 416-788-9197
Barry Smith, SEIU 416-528-9116