Water towers at sunset. Image: Chris Diroll/Flickr

When asked how he went bankrupt, a character in an Ernest Hemingway novel said that it happened in two ways: “Gradually, then suddenly.”

Privatization works like this. It creeps up slowly, eroding our ability to provide comprehensive essential services, and then suddenly takes over, collapsing our social and economic fabric into a narrow calculus of profit.

Canada has been spared some of the worst excesses of privatization, but our public services are groaning under the pressures of budget cuts and outsourcing. Managers are forced to compete for limited funds (witness the full-page newspaper ads by public hospitals desperately trying to raise money) while a more coherent approach to service planning is compromised by a fragmentation of public and private operators. 

COVID-19 is exposing many of these tensions. Frontline workers are showing the stress of insufficient resources, while coordination across services and regions is weakened by the competing mandates of profit-seeking firms and legal contracts that limit our ability to respond flexibly to a crisis.

Hospitals are an obvious point of concern, but there are other public services that will be tested in the coming weeks. Take water operators for example. Hand washing is critical to combating the virus. Thankfully, the vast majority of water operators in Canada are still public, but their capacity to maintain services has been chipped away over the past 20 years by austerity and increasing private sector participation in everything from water testing to infrastructure financing. 

Solid waste and recycling are also a concern, with tissues, food products, hospital waste and plastics all acting as potential disease vectors. Here we have seen extensive privatization in Canada, with many municipalities serviced by multinational firms with poor track records on health and environmental issues. Are these private firms willing to make major changes to collection protocols that are not part of their original contracts? Can municipalities co-ordinate waste management strategies in a highly disjointed delivery system? Will they keep workers safe?

And what about electricity (without which few of us would be working from home)? Although the majority of electricity providers remain public in this country, mounting privatization in the sector is alarming. Would a privatized system offer price breaks to low income households at a time of need? The record shows that for-profit firms simply do not prioritize the larger public good.

One need only look to the situation in the United States to see how difficult it can be to manage a crisis like COVID-19 in an uneven and unequal public-private system. Flint, Michigan, has cut water supplies to thousands of households for non-payment of bills, thus making hand washing impossible for the most marginalized people in a city now emerging as a COVID-19 hotspot.

Italy’s challenge is also, in part, a product of the erosion of its otherwise remarkable public health system, with privatization and austerity eating away at the government’s ability to coordinate its responses. 

COVID-19 is (yet another) wakeup call for the need to stop privatization in Canada, and an opportunity to rebuild our public services, constructing a more coherent municipal, provincial and national approach to an integrated public services network.

We can also use this occasion to bring outsourced services back in-house. Countries that have experienced the ravages of privatization more fully than Canada are doing just this, with hundreds of municipalities in Norway, France, Austria and elsewhere beginning to make their water, electricity, transport, health and other services public once again.

Even public banks are making a comeback, with countries around the world recognizing the important role they play in financing critical public infrastructure at low cost while providing counter-cyclical funding to help improve equity (not just to bail out large firms). From Germany to Costa Rica, public banks are on the front-line of economic responses to the COVID-19 shock.

It is important that we have this conversation now if we are to build longer term solutions in the future. No public service will ever be perfect, but a properly funded network of public agencies that can coordinate a system of public services without the distraction of contracts and profits is our best security against the next crisis that will inevitably come our way.

David McDonald is professor of global development studies at Queen’s University and director of the Municipal Services Project.

Image: Chris Diroll/Flickr