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NDP defuses budget privatization bomb, McGuinty threatens ON election

Schedule 28 of bill would create "privatization czar," sell off vital services at loss.

Prue: Conservatives hate McGuinty so much, they are voting with us against their own Ish Theilheimer

TORONTO, ON, Straight Goods News, June 15, 2012: Ontario Premier Dalton McGuinty is threatening an election because opposition New Democrats and Conservatives have forced changes to his government's omnibus bill which block widespread privatization of government services.

The Premier's threats are in response to clause-by-clause committee negotiations over the budget bill (Bill 55). Public service unions, health care advocates and the NDP have been working furiously to amend or reject a little-known section of the bill — Schedule 28 — that could result in the sell-off of any government service. It contains provisions to make one Cabinet minister the "privatization czar" and enable him or her to act, without legislative debate, to sell off anything from health care to roads to the issuance of drivers' licences.

  "This theory of economics is not working. People are slowly realizing it's not in their best interests."

Now, because other schedules in the budget bill preceding and enabling Section 28 have been defeated in committee, the government will not get the power to sell off public services.

NDP MPP Michael Prue (Beaches-East York) has been his party's advocate on the matter. He told Straight Goods News on Friday morning that in Finance Committee, "We have taken out every single provision" that would have enabled Section 28, with five schedules deleted entirely. "Twenty-eight can't work."

All committee votes, Prue said, have been by identical margins of 5-3, with Conservatives and NDPers voting together against the Liberals, who have a minority government, but, because the committee chair is a Liberal, they are deprived of one vote each time. Ironically, the Conservatives are voting with the NDP despite their own support for privatization. "Conservatives hate [McGuinty] so much, they're voting with us against their own principles."

McGuinty told reporters on Thursday that he had been betrayed by Andrea Horwath and the NDP after striking a deal with Horwath for her support of the budget, but Horwath had maintained for some time she would try to amend the bill. McGuinty says the government will fall short of deficit targets without the privatizations the budget would enable. Prue disagrees, saying the committee's amendments do not add expense or revenue and do not affect the government's bottom line. "And if they privatize services, they might lose money," Prue said. "Privatization has never been shown to save money."

He pointed to the scandal over the sell-off of air ambulance services to the company known as ORNGE. "Look at the mess you're in now," said Prue, who feels McGuinty is bluffing about calling an election. "He would have to vote against his own budget bill," which would be unprecedented. And the Lieutenant-Governor might not grant McGuinty a dissolution of the Legislature and could give the Conservatives a chance to govern, with NDP support.

Prue expressed surprise at McGuinty's threatening to go to the wall over privatization, when the Premier has consistently campaigned as a defender of public services. "This is a wild place these days," he said.

CUPE Ontario President Fred Hahn is one of the activists who blew the whistle on Section 28. "We disagree with this austerity budget. It will kill jobs and hurt communities across Ontario," Hahn told Straight Goods News on Wednesday. "But Schedule 28 is a huge problem that hasn't received the public attention it should. It undermines some of our core democratic principles. It moves major decisions about selling off crown corporations and handing over public services to multinational corporations to the back rooms. It means MPPs and the Ontario public might not even know about sell-offs of public services and assets, and that is just wrong."

In May his union released a legal opinion by Steven Shrybman of Sack Goldblatt Mitchell LLP, which raised alarms. According to Shrybman, Schedule 55 "gives Cabinet sweeping powers to authorized contracting out or privatization of any and all Ontario government services to various persons or corporate entities including private, investor-owned companies that may be foreign-controlled."

Earlier this week, Finance Minister Dwight Duncan indicated an amendment to Schedule 28 may be in the works, and senior bureaucrats have suggested the schedule only applies to ServiceOntario, but to date, no amendment has been made public. Critics believe the only solution is to remove Schedule 28 from Bill 55 altogether.

"Dwight is spooked," Prue told Straight Goods News. "They are running a $16 billion deficit and they have no way out. It's worse than Bob Rae's worst nightmare. They're trying to find money where there is no money," which, he believes, explains why they are seeking to sell off even profitable government services.

Fred Hahn said he believes impetus for Schedule 28 came from economic advisors to Ontario's premier, who come from the banking industry, including former TD executive David Livingston as McGuinty's chief of staff and former bank president Gordon Dixon as chair of the Jobs and Prosperity Council. "The whole idea of privatization is part of the austerity agenda that's spreading around the world," Hahn said. "This theory of economics is not working. People are slowly realizing it's not in their best interests."

ServiceOntario, which provides things like drivers' licences and health cards, takes in $2.7 billion annually at a cost of $270 million.

"It is a money maker," Fred Hahn said. "It is responsible for a huge amount of personal information for all of us. You could have multinational companies providing parts of these services." Once US companies are in possession of Ontario citizens' personal information, he said, that information could be available to the US government under terms of that country's Patriot Act.

Furthermore, once a company has taken over a service, it can decide the terms and conditions of that service and the fees it will charge, he said. "So, for example, a company based in Alabama could take over the issuing of our drivers' licences. And they could decide that you have to pay $150 every year, and they could decide that that money is theirs and give nothing back to government... This schedule allows for every piece of this scenario to happen, and it's alarming."

Posted: June 15, 2012

  Public services

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