Long-term care failures highlight dangers of pro-privatization dogma

Please chip in to support more articles like this. Support rabble.ca for as little as $5 per month!

Image: Myfuture.com/Flickr

Please put me in a long-term care home, said nobody ever.

Still, few probably expected that these homes would become horror houses of death, taking their place at the very epicentre of a raging pandemic and accounting for some 75 per cent of coronavirus deaths in Ontario.

An important aspect of this momentous tragedy is that the coronavirus death rate has been significantly higher in private, profit-making homes than in not-for-profit homes.

This higher death rate in the profit-making homes began in the first wave of the pandemic and it continues now in the second wave, according to a report last week by a team of Star reporters.

If that wasn't alarming enough, then came the news earlier this week that private equity -- known for ruthlessly squeezing every ounce of profit out of its businesses -- is keenly eying the long-term care industry in Ontario.

Indeed, the private equity firm Arch Venture Holdings is lining up investors as it gears up to become a major player in the industry, the Star reported.

All this should heighten concerns about the role of profit-making in long-term care homes (also known as nursing homes).

The situation should alert us more broadly to the foolishness of our rush to privatize services that would be better left to the public sector -- not just nursing homes but health care, education and other areas where the public interest is at stake.

Privatization has become a kind of economic dogma in recent years, with business commentators and politicians routinely asserting that the private sector is more efficient and always does things better -- an assertion that is rarely accompanied by any evidence.

In fact, the crucial difference separating the private and public sectors is that the private sector is focused on profit-making. Indeed, this is the only real purpose of a business enterprise.

So, regardless of what industry spokespeople say, a private company in the nursing home business is focused on maximizing profits, as its board of directors demands.

And it will typically do this by scrimping on staff costs -- hiring fewer workers and paying them rock-bottom wages with no benefits. This generally results in high turnover and worse conditions for the residents, as well as the workers.

Certainly, Ontario's three big private nursing home chains, which receive government funding under the same formula as not-for-profit homes, have been good at maximizing profits.

Over the past decade, the three chains paid out $1.5 billion in dividends to shareholders and $138 million in executive pay, according to the Star investigation.

The chains insist these payouts come out of profits they earn selling private services to residents in these and other retirement homes, which are not funded by government.

In fact, it's hard to know exactly what's going on, since the government is notoriously lax in its regulations and oversight of the industry -- as the pandemic vividly illustrates.

This laxness appears to be traceable back to Mike Harris, the former Conservative premier whose government removed minimum staffing levels for nursing homes in the late 1990s and encouraged the involvement of private businesses.

After retiring from politics in 2002, Harris has profited handsomely from the lucrative private nursing home industry he helped create, serving as chairman of Chartwell Retirement Residences, one of the three big chains. (His annual salary for this part-time position is $229,500, and he has $4.4 million in Chartwell holdings.)

Over the past decade, Chartwell paid its executives $47.3 million and distributed $798 million to shareholders.

Meanwhile, in the 28 nursing homes Chartwell owns or operates in Ontario, the COVID-19 infection rate has been 47 per cent higher and the fatality rate 68 per cent higher than the provincial average, according to the Star investigation.

The nursing home market isn't the only area where Mike Harris' privatization policies still reverberate.

His 1999 privatization of Highway 407 has already cost Ontario drivers billions in higher tolls and will cost them many more billions before the privatization deal expires -- in 78 years.

Contrary to business mythology, the private sector doesn't always do things better. Rather, it always does things to make a profit, and that can leave the rest of us paying a high price -- in dollars and deaths.

Linda McQuaig is a journalist and author. Her book Shooting the Hippo: Death by Deficit and Other Canadian Myths was among the books selected by the Literary Review of Canada as the "25 most influential Canadian books of the past 25 years." This column originally appeared in the Toronto Star.

Image: Myfuture.com/Flickr

Related Items

Thank you for reading this story…

More people are reading rabble.ca than ever and unlike many news organizations, we have never put up a paywall – at rabble we’ve always believed in making our reporting and analysis free to all, while striving to make it sustainable as well. Media isn’t free to produce. rabble’s total budget is likely less than what big corporate media spend on photocopying (we kid you not!) and we do not have any major foundation, sponsor or angel investor. Our main supporters are people and organizations -- like you. This is why we need your help. You are what keep us sustainable.

rabble.ca has staked its existence on you. We live or die on community support -- your support! We get hundreds of thousands of visitors and we believe in them. We believe in you. We believe people will put in what they can for the greater good. We call that sustainable.

So what is the easy answer for us? Depend on a community of visitors who care passionately about media that amplifies the voices of people struggling for change and justice. It really is that simple. When the people who visit rabble care enough to contribute a bit then it works for everyone.

And so we’re asking you if you could make a donation, right now, to help us carry forward on our mission. Make a donation today.


We welcome your comments! rabble.ca embraces a pro-human rights, pro-feminist, anti-racist, queer-positive, anti-imperialist and pro-labour stance, and encourages discussions which develop progressive thought. Our full comment policy can be found here. Learn more about Disqus on rabble.ca and your privacy here. Please keep in mind:


  • Tell the truth and avoid rumours.
  • Add context and background.
  • Report typos and logical fallacies.
  • Be respectful.
  • Respect copyright - link to articles.
  • Stay focused. Bring in-depth commentary to our discussion forum, babble.


  • Use oppressive/offensive language.
  • Libel or defame.
  • Bully or troll.
  • Post spam.
  • Engage trolls. Flag suspect activity instead.