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Privatization of public services will hurt N.L.: town hall

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The provincial government’s move to privatize public services is a dangerous course of action for Newfoundlanders and Labradoreans, a crowd of about 75 heard at a town hall in St. John’s Wednesday evening.

At the “People Before Profit” event, organized by the Newfoundland and Labrador Federation of Labour, members of a three-person panel outlined how the private sector, with profit as its bottom line, cannot adequately or consistently provide the same quality of services in the areas of education and healthcare.

Canadian Centre for Policy Alternatives economist Diana Gibson said while the evidence against privatizing public services abounds here and in other provinces, Newfoundlanders and Labradoreans are particularly vulnerable to the consequences of losing publicly funded services since the province is a “high-cost jurisdiction”.

In response to the Davis Government’s announcement in its 2015 budget last April that it would bring in an outside consultant to scrutinize the government’s spending, Gibson said there’s no need to pay a consultant to identify the already-known fact that Newfoundland and Labrador has “the most rural population in Canada, you’ve got the highest aging demographic in Canada, you’ve got one of the highest increases in cost of living year over year, you’ve got the highest unemployment rate, and you’ve got the highest number of people on social services.

“These populations are in isolated places, there’s lack of access to transit, delivering services is [difficult],” she continued. “So, simply, it costs more in Newfoundland and Labrador because it costs more in Newfoundland and Labrador. There isn’t a magic silver bullet that some consultant from outside can give the government to make it cheaper in a high-cost jurisdiction. And so if they cut costs, that means they’re cutting services straight up. If you guys don’t pay more per unit of service in Newfoundland and Labrador than other jurisdictions, then you’re getting less services straight up because it costs more here.”

Public-private partnerships and healthcare

Gibson said that in light of available research and statistics, if the provincial government follows through on its recent announcement it will introduce public-private partnerships (P3s) to develop long-term health care facilities and services here, it will be putting lives at risk.

Citing a study of U.S. for-profit healthcare facilities that revealed patients have a two per cent higher chance of dying under private care, Gibson translated the stats into Canadian terms, saying that could mean 2,200 more deaths per year. The rate is 10 per cent for children living in private care, she said.

“So the reality is it’s not just the quality of services that suffer, but it’s actually higher risk to bring investors into healthcare.”

Even though for-profit enterprises that deliver healthcare services might be able to alleviate governments’ financial burden of building and maintaining infrastructure in the short-term, they still have a primary mandate of profiting from the care they offer, she said, and that frequently means cutting staff and reducing patient services.

“The biggest determinant of quality of care in a long-term care facility is how many staff you’ve got. And so it’s pretty clear that if you’re cutting those staff ratios to cut corners you’re going to see quality go down,” she explained.

Gibson also said it’s difficult to compare mortality rates in private care facilities versus publicly funded ones since private long-term care providers “dump their patients when their acuity goes up, because as the acuity goes up, the intensity of need and service level goes up. So they ship those people back into the public system to an acute care hospital.”

Long-term care facility residents are even more vulnerable in private care facilities, she said, because “many of them have dementia, the majority are women, the population has relatively little voice — in general [they’re] at high risk for abuse and neglect.”

Lessons from privatizing colleges

Meanwhile, panelist Travis Perry, President of the Canadian Federation of Students for Newfoundland and Labrador, called the government’s decision to further privatize public services “reckless” since it has already seen the consequences of privatizing post-secondary education here.

“We need only look to our own college system to see the consequences of both privatization and a tax on accessible education,” he said.

“The experience of the 1990s demonstrates the many pitfalls we encounter when our governments prioritize privatization of public services over proper investments. Shifts in delivery for education and training from the public college system to the private college system had a negative impact not only on the quality of students’ education and their career prospects following education, but on the broader regional community and economy as well.

“Faculty who had worked in the united public colleges were forced into low-wage, insecure, non-union jobs with private colleges,” he continued. “When local businesses and industry struggled to maintain a competitive foothold in this province, the combination of negative effects flowing from a shift to private delivery of public services further drives down consumer spending and economic growth, impacting the community and province in a broad and systematic way. By the end of the decade…the reckless privatization of our college system [became clear] when the Career Academy closed its doors abruptly, leaving students out in the cold. All the time they had spent in the classroom, the tuition fees they had paid all had gone to waste. These students were left with mountains of debt and no certification to show for it.”

“More and more of our people are being excluded”

Gibson said while the private sector is suited to serve many industries, its profit-seeking and business practices aren’t congruent with the need to ensure the optimal well-being of the people of the province.

“I totally support using private corporations to build infrastructure. Simply, the question is, how do you structure that?” she said, adding there’s nothing wrong with the traditional tendering model the government has used to commission private enterprises to do work that doesn’t involve the direct care of residents.

“The difference for public-private partnerships mostly is…you’ve got the money for the mortgage, you can borrow it cheaper…and we all know, if you can afford to pay for your own mortgage, why would you pay off someone else’s?

“If it’s a public tender process in a public-paid, private-billed arrangement with a transparent contract, where we know what we’re paying, we know what the agreements are, and there’s no long-term maintenance contract that guarantees a profit, it works. If you have a private contract that has secrecy and guaranteed profits, it costs more — and the auditor generals have seen it, audit after audit, that it costs more.”

Perry said the case for investing in public education and all public services in our province “is clear: increased labour productivity, increased tax revenues, reduced public income support and more.

 When we turn to privatization as a band-aid solution to reduce government costs, it’s the most vulnerable people in our society who bear the brunt of those short-sighted decisions.  — Travis Perry, Canadian Federation of Students

“The social impact is no less significant,” he continued. “A more highly educated population and quality public services mean a higher quality of life, improved mental health, improved opportunities for children and youth, reduction in crime and incarceration rates, and a more engaged and supportive community.

“When profit becomes the bottom line, the result is more and more of our people being excluded. Privatization marginalizes and exploits those very groups in our community who are already precariously positioned. Research overwhelming demonstrates privatization negatively and disproportionately impacts women, Aboriginal and First Nation groups, people with disabilities, trans and queer communities, and many more. Those communities are the most heavily reliant on public services and are the most negatively impacted by the deterioration of quality due to privatization, and those from the lowest-income backgrounds are most impacted by increased user fees. When we turn to privatization as a band-aid solution to reduce government costs, it’s the most vulnerable people in our society who bear the brunt of those short-sighted decisions.

Perry also said the discourse around privatization in this province is being heavily influenced by a political culture that has normalized certain ideologies.

“Even the language we’ve used and the types of conversations we have are being shaped and reshaped in ominous ways by the messaging of privatization, austerity and neoliberalism. Instead of talking about communities, neighbours and people, we talk about clients and users. Instead of talking about values and principles, we talk about economization and capital enhancement,” he said. “Privatization is changing not only the face of our communities but the very fabric of our democratic society.

A “manufactured crisis” and a choice moving foward

Gibson said the current situation wasn’t inevitable, and that Newfoundlanders and Labradoreans should understand the government’s push to privatize traditionally public social services in the context of its decisions in recent years.

“It’s important to realize that when [government] starts crying poor there is a manufactured crisis here that was made by a government that chose not to manage revenues responsibly,” she said. “It chose not to tax foreign corporations that are operating the oil and gas sector adequately, gave away a bonanza, and that money doesn’t even land here — they’re not preparing goods and services here [and] a lot of the workers aren’t even from here.

“They’ve foregone those revenues, they gave away taxes to the wealthy, and they said a rising tide was going to raise all ships, that money was going to somehow magically come back on the ground to services and jobs — and the way to magically land that money back on the ground is to tax it.”

Longtime labour activist Israel Hann also sat on the panel Wednesday evening. He said too many families and individuals in this province already can’t afford long-term care, and under public-private partnerships things will only get worse.

“People in Newfoundland don’t have that kind of money. I’ve worked with them. I know,” he said. “And I’ve been in long-term care homes and have seen them cry. I’ve listened to the horror stories they got. They money is not there. So where is the money going to come from? They have to take their homes, and rates have got to go up, and the level of care is going to go down.”

Gibson said the issue of determining whether or not to privatize public services comes down to one question: “It really boils down to what kind of a society do we want to have? Do we want to have a society where people are working two jobs, barely seeing their kids, cobbling it together, with massive student debt loads, [with] incomes that aren’t keeping up with inflation, and where benefits and costs are being privatized and we’re paying more and more out of pocket? Or do we want a society where there’s quality family jobs, leisure time, family cohesion, and where people are spending money locally on local goods and services? There’s a policy choice to be made.”

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