Paul Kahnert Photo credit: Paul Kahnert
Welcome to another episode of Small Change where we deconstruct soundbites to expose the real meaning behind things like public-private partnerships.
Today, I’m so happy to have Paul Kahnert back on Small Change.
Paul worked for Toronto Hydro for 33 years and what he learned about politics and working-class rights led him to become a steward for grievances and arbitration.
Paul was also involved in negotiating committees and helped lead four successful strikes as well as the Ontario-wide campaign known as the Ontario Electricity Coalition whose court case successfully stopped Mike Harris’ Conservative government from selling Hydro One.
Paul is currently a freelance writer regularly appearing on rabble.ca, Socialist Project, The Hamilton Spectator, Toronto Star and many, many local papers like the Waterloo Record and Peterborough Examiner.
Find his extensive writings here including Kahnert’s op-ed, Who really benefits from public-private partnerships published in the Hamilton Spectator (May 30, 2024).
Paul and I will be discussing an often-misunderstood means of privatizing public services known as public-private partnerships or P3s.
Instead of investing in public services and utilities like water and waste water, nuclear energy, hospitals and roads like the 407, governments enter into partnerships with private investors to the detriment of the public commons and public purse.
Currently, governments at every level are experiencing revenue issues. Many of these revenue shortfalls can be traced back to tax cuts for billionaires and corporations ubiquitously known as ‘cutting red tape.’
Unfortunately, instead of making the tax system more equitable, the federal and provincial governments, like Ontario’s Ford government, are making the political choice to enter into P3s even going so far as creating infrastructure banks to fund these privatization projects.
In 2017, Trudeau established the Canada Infrastructure Bank which is currently funding a high frequency rail (HFR) project between Quebec City and Toronto.
In November 2023, Doug Ford announced that he had created a P3 infrastructure bank in Ontario to build among other things privatized long-term care homes and privatized student housing — neither of which is in the best interest of Ontarians or the public commons.
In fact, Andrea Muehlebach, an associate professor in University of Toronto’s department of anthropology, has researched movements struggling against the privatization of water and found that P3s routinely lead to jobs losses, specifically for workers with years of experience, expertise and knowledge; uneven access to water; higher utility prices; and increased shut offs due to an inability to pay.
P3 contracts lack transparency, inherently relying on non-disclosure agreements to keep the public in the dark.
Muehlebach also found that P3s are generally no more efficient than publicly owned and operated utilities.
Muehlebach determined there was less investment in infrastructure because the primary motive to service debts to investors superseded maintenance and service.
Germans, Italians and the French fought to ensure their water and waste water was not privatized but remained in the public commons.
The Transnational Institute (TI) has documented 320 cases worldwide in its international data base of deprivatized public services. Of the Canadian cities that have deprivatized their water and waste water systems, eight are featured in the TI report: White Rock (BC), Hamilton (ON), Port Hardy (BC), Taber (AB), Okotoks (AB), Banff (AB), Sooke (BC), and Owen Sound (ON).
In every single case, the municipality had to buy its way out of the P3 contract which proved very expensive and often spanned years.
The 2014 annual report of the office of the auditor general of Ontario was very critical of P3 projects undertaken in the province. In fact, the Ontario Auditor General found that the province spent $8 billion more on P3s than it would have had it used public procurement. $6.5 billion of that was directly from the higher cost of private financing.
The Ontario, Canadian and international record of P3s proves that privatizing water, electricity, rail, pharmaceuticals, nuclear power and hospital construction off-loads the risk and costs associated with these undertakings from the private sector onto the public purse.
Kahnert and I also discuss how P3s hide public borrowing while at the same time providing long-term government guaranteed profits to private corporations.
Everywhere you look these days there’s a crisis. Whether it’s an affordable housing or unhoused crisis; increased reliance on food banks; lack of access to universal healthcare; elementary, secondary and post-secondary education funding and staffing crises; or the climate crisis, P3s exacerbate the problem by skimping on infrastructure maintenance, staffing and by cutting services while driving up costs for tax payers in order to pay guaranteed dividends to investors.
Tax cuts for the wealthy and corporations are generally hidden behind minimal personal tax cuts like foregoing car licencing fees or privatizing liquor and alcohol sales.
These token tax cuts have made it easy to hide the privatization of provincial services while redirecting billions of dollars into private pockets instead of robustly funding public programs including universal healthcare; primary, secondary and post-secondary education; autism therapy; meeting the 2025 deadline for making Ontario accessible as per the Accessibility for Ontarians with Disabilities Act (AODA); as well as $10-a-day childcare.
Meanwhile, the Thatcher, Reagan and Mulroney era trickle down theory that exerts once the pockets of the one per cent are full, some of the money that falls out of their pockets with make its way down to the working class has been thoroughly debunked and should finally be put to rest.
Now is the time for the public commons to claim what is rightfully ours in the form of public electricity; wind power; water and waste water; housing; universal healthcare that includes glasses, prescriptions, dental, disability and elder care; food production and distribution; and containment of growth within urban boundaries while saying no to P3s that privatize roads and highways; hospitals and clinics; residential long-term care; nuclear power; and mining infrastructure which ultimately puts the burden of cost, maintenance and inherent failures onto the public purse while the private sector is guaranteed quarterly dividends at all costs.
Just think about that, if there are quarterly dividends to be had, why would the public sector not make use of that money to improve public services and maintain infrastructure rather than handing billions over to private, for-profit corporations? Those funds should be used to provide reasonable utility rates for working class folks and to robustly fund public services instead of lining the pockets of corporate fascists.
This podcast is well worth your time!
Thanks to everyone who read today’s article and listened to my podcast. With your continued support, a little Nicoll can make a lot of change.
Music: Real Estate by UNIVERSFIELD is licensed under a Attribution 4.0 International License. freemusicarchive.org.
*Be sure to download the Substack app to get the most from your podcast experience.
Public-Private Partnership. What's the financial truth behind the name?