Public Values

Harper forcing privatization on municipalities through PPP Canada

The only option until 2014 is riskier and pricier.

Decades of municipal underfunding have made cities and towns vulnerable to the PPP Canada pitch.June 7, 2012: The Harper government's privatization agency is forcing municipalities into risky and pricy privatization schemes, a move that wastes tax dollars and hurts communities.

Crown Corporation PPP Canada held its annual public meeting in Ottawa. Opponents were at the meeting to highlight the problems with public-private partnerships (P3s).

Working through PPP Canada, the federal government is using Canada's multi-billion dollar infrastructure deficit to force privatization on municipalities.

  "Long-term costs and consequences of P3s outweigh any perceived short-term savings."

The federal P3 Canada Fund requires cities and towns to enter into long-term contracts with for-profit corporations to finance, operate or maintain infrastructure or public services.

All other federal infrastructure program funding has expired or run out. New federal long-term infrastructure funding is coming in 2014, but there's no plan to bridge the gap.

At the recent Federation of Canadian Municipalities conference, delegates expressed growing frustration that the only source of funding forces local governments into P3s.

The Canadian Union of Public Employees (CUPE) organized a well-attended forum during the conference that tapped into municipal frustration with federal pressure tactics.

Decades of municipal underfunding have made cities and towns vulnerable to PPP Canada's pitch.

PPP Canada is actively lobbying municipalities to apply for P3 funding — including a one-time 25 percent "grant" that may seem irresistible to cash-strapped cities and towns.

But the long-term costs and consequences of P3s outweigh any perceived short-term savings.

•P3s aren't transparent or accountable. PPP Canada's response to a CUPE access to information request for a list of municipalities applying for funding was to black out much of the information.

•P3s bring lengthy delays and additional transaction costs for lawyers and consultants.

•P3s lock in for-profit delivery for decades, tying the hands of future councillors and diverting public funds into corporate profits.

•P3s cost more — the private sector simply can't borrow as cheaply as the public sector, which adds to long-term contract costs. Public financing is the most cost-effective use of tax dollars.

•Privatized operation and delivery threatens service quality and accessibility.

•P3s do not transfer risk away from municipalities.

PPP Canada has launched its fourth call for applications, but municipal governments are beginning to push back. Several BC municipalities have passed resolutions calling for federal infrastructure funding that isn't linked to privatization. CUPE has developed a resolution that locals can bring to their municipal council.

It's time to turn off the taps on this privatization subsidy and invest directly in the public services and infrastructure that are the bedrock of our country.

Related individuals, organizations and significant events
What are the ten essential questions municipal officials must ask when a P3 is on the table? Click here to find out.

Links and sources
  Federal privatization agency pushes risky, expensive deals

Posted: June 14, 2012

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