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There’s proof P3s can cost taxpayers more

Recently, when I read the unbelievable statements of Richard Alexander, executive director of the Newfoundland and Labrador Employers’ Council (NLEC), about the benefits of public-private partnerships — and his suggestion that the private sector can “help” save jobs for Newfoundlanders and Labradorians — I was reminded of a video that was making the rounds on Facebook showing some wolves attacking a weakened moose (“Government-private partnerships can save jobs: NLEC,” Jan. 21).

Like all newly elected governments, Dwight Ball’s Liberals have discovered (surprise, surprise) that the government coffers are almost empty. Some irresponsible media outlets have even given proclamations of bankruptcy airtime. Yup, the N.L. moose is just about dead.

Everyone agrees it wasn’t the public sector and the general public that made it sick, but it looks like they’ll be made to pay the price, especially if the NLEC convinces government that private-public partnerships are the non-innovative answer to our public debt.

Quoting from a newly minted study written by two Memorial University professors, Alexander claims that public-private partnerships result in a lower cost to the taxpayer, better service, and the “freeing of government resources” (whatever that means). The study’s authors obviously didn’t do much of a survey of information available about public-private partnerships (P3s) in other provinces in Canada.

In an annual report by Ontario auditor general Bonnie Lysyk in February 2015, it is estimated that rather than saving Ontario taxpayer’s money, the P3 projects cost $8 billion more than if they had been publicly tendered. Indeed, that report claims that had those P3 projects been done publicly, Ontario wouldn’t have the deficit it had then — worth approximately $1,600 per Ontario household.

Another province that has used P3s in the past is British Columbia. There is plenty of evidence that those projects cost more and delivered less than had they been done publicly.

According to Lynne Fernandez, writing for the Canadian Centre for Policy Alternatives (“Fast Facts: Outsourcing Under Scrutiny,” June 6, 2014) forensic accounting on four public-private partnerships (Abbotsford Regional Hospital, Sea-to-Sky Highway Improvement, the Academy Ambulatory Care Centre, and the Canada Line) discovered that all of them were more costly than if they had been done publicly.

Toby Sanger, an economist with the Canadian Union of Public Employees, also claims that audits in Nova Scotia, New Brunswick, Quebec, British Columbia and at the federal level have likewise uncovered examples of P3s being more expensive than the public alternative (“Ontario audit throws cold water on federal-provincial love affair with P3s,” The Monitor, Feb. 2, 2015).

An economist with the University of Manitoba, John Loxley, also studied several examples of P3s in Manitoba and concluded that they cost more and delivered less, leaving taxpayers paying the price decades into the future.

Loxley came up with 10 useful questions that public administrators and legislators could ask proponents of any public-private partnership proposal. I urge our new government to familiarize themselves with these questions.

The previously quoted Lynne Fernandez claimed that American municipalities are starting to insource rather than outsource to save money.

“A survey of data from the International City/County Management Association found that the most common reason for bringing outsourced services back under public control was to re-establish adequate levels of service and better control of escalating costs.”

The point that we all need to remember is that the private companies are not going to do anything which does not return them a profit. The private sector can only deliver cost-savings by cutting corners and cutting costs, chief of which are salaries and wages. The provincial public service, on the other hand, is a not-for-profit method of providing services to the people of this province.

If, in our weakened state, taxpayers foot the bill for bad government decisions, I’d rather we paid to have unionized government jobs rather than part-time, non-unionized McJobs. And don’t ever doubt, we will be paying for it one way or another.

I’m not saying the moose is not ill, but if the government gives any credence to this P3 nonsense, and there is every suggestion that they will, since Ball mentioned the idea himself time and time again on the campaign trail a few months ago, then we can definitely predict the early death of the moose from a pack of predatory private interests waiting to feed at the debt-ridden carcass of the public purse.


Kathleen Burt, taxpayer


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