Furey’s three Ps… perplexing, postponing, possibly pricier
By Ivan Morgan
Boys oh boys, there’s going to be a racket!
Or is there?
Government has announced the new portions of divided highway planned for the Trans Canada will be built by a public private partnership (P3). This has got the public service unions very upset.
What’s a P3? Its an agreement where government contracts a private company to do work government has traditionally done. In the past, government hired a contractor to build a stretch of highway. Once it’s done, government (that’s you and me) owns and maintains that highway.
This new P3 agreement calls for a private company to bid on designing, building, and operating 40 kilometers of divided highway over a 30-year period. It will be theirs (for us to use) for 30 years.
There is a very sharp division between those who think P3s are a good idea, and those who don’t. (Full disclosure, I was once employed by the don’t crowd). I wonder if anyone is going to care. When in power the current Opposition was face and eyes into P3 agreements, so they aren’t likely to object too loudly. So, on the face of it, it’s a done deal.
NAPE is going off their head, as you can bet the contractor who gets the job isn’t going to pay NAPE wages or benefits for snow clearing and such. Will anyone care? Do you?
Both sides claim they are acting in your best interests.
Pro P3 businesses claim they will find efficiencies, build, and maintain things better than government. In this case it’s highways, but we are building P3 hospitals and long-term care facilities in this province too.
Anti P3 groups, mostly public service unions, claim P3s don’t save money, services are inevitably sacrificed to increase profits, and workers will make smaller wages and have fewer, if any, benefits. No doubt.
Government likes the arrangement because it moves stuff off the books, making themselves look like they are good managers of your money – for now.
Another plus for government is secrecy. As many P3s are considered commercial contracts, the details are often private and thus protect government from criticism (and from letting you know how your money is spent.)
But how does a P3 highway work over 30 years? You can bet government doesn’t care. They’re focused on the four-year election cycle. They can claim they have a handle on expenses just like they promised. They care about this year’s budget, not the one in 30 years. A P3 agreement lets them kick the financial can way down the road. Critics call it a “buy now, pay later” plan. If a 30-year P3 contract goes south, it will be my grandchildren’s problem.
It’s a contentious, and extremely complicated issue.
To be fair to the critics, there are no end of auditors general across Canada who warn that P3’s aren’t such a good idea, and often turn out to be far more expensive than traditional government contracting.
An Ontario auditor general’s report from 10 years ago stated infrastructure projects funded through P3s had cost Ontario taxpayers at least $8 billion more in borrowing and other expenses than if they had been done the traditional way through public funds.
Also to be fair, salaries are a huge and ever-growing part of government’s budget. Farming out work to the private sector can lower the financial pressure on government (elected, in case you forgot, to do the best they can with your tax dollars.)
I wonder where it all ends. If government contracts out services this easily, then what’s next? As more services become for-profit enterprises, what becomes the purpose of government? Are we electing people who sell the services government provides to the highest bidder to avoid the responsibilities we voted them in for? Or are we electing people to grapple with ballooning budgets you and I can increasingly no longer afford?
I have no idea what the answer is. You think government can run a project? Two words: Muskrat Falls. You think privatization is the best solution? Have you been to a supermarket lately?
Ivan Morgan can be reached at ivan.morgan@gmail.com