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Why are the Liberals pushing something that will make our fiscal crisis worse?

By: | March 30, 2016

There is more proof than ever about the failure of privatization. So why is government still talking about it?

Hans Rollmann
To Each Their Own examines political issues impacting Newfoundland and Labrador.

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In 2013 students in Corner Brook and communities province-wide held protests, arguing the Dunderdale-led PC government's cuts to College of the North Atlantic and its decision to privatize Adult Basic Education was a bad idea. It turns out they were right. On March 16 it was revealed ABE costs have since jumped, while enrolment and graduation rates are down significantly. Photo: The 4 O'Clock Whistle.

“This is unprecedented,” Premier Dwight Ball said in January of the province’s fiscal situation. “Unprecedented” has been the watchword of the Liberal government since getting elected on Nov. 30.

On March 16, figures were finally released that demonstrate once and for all government’s privatization of Adult Basic Education was a complete failure. Since being privatized in 2013, the cost of operating the program rose by 31 percent, while enrolment dropped by 30 percent and graduate rates dropped by more than half, according to the Canadian Federation of Students, which obtained the data through an access to information request.

What did privatization accomplish? Higher costs, and worse outcomes. Most damningly, we aren’t talking about energy or liquor sales or even snow-clearing: we’re talking about basic literacy. The failure of privatization is costing Newfoundlanders and Labradorians the basic ability to read and write.

Privatization fails in health care, too

Meanwhile, for the past month the public has watched a costly drama unfold at Eastern Health: improperly sterilized equipment leading to postponed surgeries and costing the public an estimated $3.7 million, at least. We’re still waiting to find out the cause of this massive debacle, but it doesn’t take a genius to suspect that the persistent underfunding of our health care system has played some role in the drama.

Regardless, if government moves forward with plans to privatize or pursue public-private partnerships (P3s), we can expect more costly debacles of this nature, and we can look to Ontario for a sneak preview. Last week, Trillium Health Partners, a three-hospital group in Ontario, cancelled its contract to outsource sterilization of hospital equipment to the private sector, due to repeated quality management problems with the company it contracted to, SteriPro. Trillium had signed a 10-year contract with SteriPro and cancelled it four years in, opting instead to bring sterilization back under in-house, accountable public operation.

According to the Canadian Union of Public Employees (CUPE), which has been fighting privatization of health care services across the country, “blood and bone matter returning on instruments was a problem” after the service was privatized. Moreover, according to CUPE, privatization also led to the private contractors transporting “very delicate surgical instruments over rural highways in all weather conditions, which is not recommended by the instrument manufacturers,” which exacerbated the quality control problems.

It’s all proof positive of what anti-privatization activists have been saying for years — that private sector skimps on quality, sacrificing safety for profits. Underfunding of public services leads to problems which we are already experiencing. But privatizing them makes things even worse.

Ignoring the evidence

These are just the latest examples of what has become indisputable fact: privatization and public-private partnerships fail miserably when it comes to quality, cost, efficiency, and accountability.
There is no justification for privatization or P3s. They are wasteful, cost the taxpayer more, and result in reduced quality. These are facts. For a brief overview of some of the most recent examples of the billions of dollars governments have wasted on privatization and public-private partnership schemes in Canada, check out this recent report from the Canadian Centre for Policy Alternatives.

 If there is a silver lining to the disappointing record of privatization, it is the growing number of successes in returning formerly privatized services and assets to public control. — CCPA

Fortunately, some governments are starting to learn. As the report notes: “If there is a silver lining to the disappointing record of privatization, it is the growing number of successes in returning formerly privatized services and assets to public control.”

What is also a known fact is who benefits from privatization — and it’s not the general public and not the average taxpayer. The ones who benefit are the private CEOs, who get to line their pockets and boost their private profits through the deals, all the while underfunding and overworking their own private sector employees.

When Dwight Ball was sworn in (and on numerous occasions before and after), he repeated a commitment to “evidence-based decision-making”.

“We will make decisions based on evidence, best practices and we will only take action after due diligence,” he stated when he became premier. “We will manage our resources wisely and we will always put the people of our province first.”

The evidence is clear: privatization of government services and the use of public-private partnerships fails. Repeatedly, disastrously, and expensively. If Dwight Ball and the Liberal government make any move in the upcoming budget toward public-private partnerships, or even outright privatization and contracting out of government services, they will have revealed that they are not interested in facts, data, or what is best for the province’s finances and its people.

They will have revealed that they are at best ignorant, and at worst continuing to do what successive governments have done for decades: take from the public purse to line the pockets of the rich.

And there is nothing whatsoever unprecedented about that.

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