P3: private pretending to be public

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At stake is the future control and operation of our hospital and healthcare system.

Last Friday, Ontario Premier Dalton McGuinty and HealthMinister George Smitherman announced that the new Royal Ottawa andWilliam Osler hospitals will be built as publicly-owned hospitals, which keepsanother major election commitment.

“We opposed the private deals at the Royal Ottawa Hospital and Brampton'sWilliam Osler Health Centre. We made a commitment to bring them back underpublic control. We've kept that commitment,” said McGuinty.

The Citizens for a Public Hospital in Ottawa beg to disagree.

The government says that under the new agreements:

  • The hospitals will remain in public hands and be owned by their boards
  • The boards will direct all work by the private contractors
  • The agreements will be made public
  • The public will have full access to services at the new hospitals
  • The hospitals are required to report back to the government on the project companies' performance.

McGuinty said the real winners are thecommunities that will benefit from the new hospitals.

“There was an urgent need in Ottawa and Brampton for new hospitals. I'mpleased that these cities will get the facilities they so badly needed, andthat the hospitals reflect our government's commitment to public ownership,control and accountability.”


The announcement by the Ontario Liberals that the hospital will be publicly owned, obscures the reality which is that the worst features of a P3 hospital will still be in place.

The hospital will be privately financed, for which the public will pay many times over and dearly in a variety of ways in the long run. Private contractors will not only be profiting from the provision of support services, but they will also be profiting from the leasing back of the facility over many years.

What is being kept public is the handing over of the asset after the multi-decade lease is up — an asset that will likely, by then, be a decrepit facility, a money pit requiring re-investment in infrastructure after years of private sector neglect in the interest of profit. Even if the board does its job to ensure that the hospital is maintained over time, the private sector will be conveniently relinquishing control just as the need for reinvesting big money becomes imminent.

The sound objectives of having public funds invested in public infrastructure that remain public assets, as well as the goal of achieving some kind of accountability, have both been lost. The agreement remains hidden from public scrutiny and tax dollars will be going to profit-making for investor-owned corporations that by their nature are required to prioritize their share prices over quality.

For the Citizens for a Public Hospital in Ottawa, the campaign is not over. They believe the public needs more detailed information than the government is providing.

What is a P3 hospital?

The hospital is designed, built, owned and operated by private for-profit corporations. A consortium (group) of for-profit corporations including banks or financiers, architects, property management corporations, and private health services corporations forms and makes a bid to build a new hospital.

All of the corporations build their profit margins into the project, including the ongoing privatization of huge parts of the hospital management and services over the life of the deal.

The public leases back the hospital from the consortium over the period of the agreement. The costs are paid out of the operating budget of the hospital. In Brampton's P3, the deal is approximately 30 years long. In Ottawa, it is over 60 years long.

What did the Liberals announce on Friday, November 21?

The Liberals announced that the projects in Brampton and Ottawa will go ahead with one change. Instead of paying a lease-back arrangement, we will pay a mortgage for the hospital. This allows the new government to portray the hospital as public without making significant changes to the deals that are in negotiations. However, the P3 model is still intact, complete with privatization of the finances, privatization of the services, the commercial land deals, the payments out of the operating budgets of the hospitals, the consortium of for-profit corporations and all the levels of profit-taking from the hospital.

How have Conservatives reacted?

“The private sector will build the hospital at its costs and we will finance the hospital with operating grants over an extended period of time not unlike a mortgage,” McGuinty said to reporters on Friday, November 21.

“Dalton's tie might be red, but his whole suit is blue. I'm just happy to see our plan go forward,” said former Conservative Cabinet Minister John Baird. He added, “Despite the Orwellian doublespeakâe¦on first glance it looks pretty identical to the deal that Ernie Eves announced here two months ago, so from that standpoint we're thrilled.”

What is a public hospital?

Until now, our hospitals have been built by capital grants from government with additional fundraising in the community. The hospital is owned publicly; it is paid for publicly through capital grants — not out of the operating budget, and is operated as a public service, not a commercial entity. There is no for-profit consortium in charge of great sections of the hospital; they are clearly financed, owned and operated publicly.

There have been attempts to diminish this by privatizing some services in some hospitals. In some cases they have succeeded. In others, privatization of the services has been stopped. The Ontario Health Coalition and its member groups have actively fought to keep all hospital services non-profit. In no case has the privatization of the hospital services been as deep or as broad as is being proposed now.

So what does this mean?

The government has reneged on its promise to make these public hospitals. The government announcement means that the Brampton and Ottawa deals in negotiation are still P3 hospitals with significant commercialization and privatization built into the deals that are being negotiated.

Why are the Citizens for a Public Hospital in Ottawa fighting this?

The introduction of more and more private for-profit ownership and operation in the health system is a dangerous threat to the future of Medicare. By introducing profit-taking and the higher costs associated with for-profit healthcare, new competing interests pull money out of patient care.

The scope of services offered under the public system is reduced, beds and staff are cut, and healthcare workers face increasing pressure for de-unionization and declines in working conditions. As more for-profit corporations get into the public health system, the risk of a challenge under the free trade agreements increases, threatening to open up the entire system to profit-taking and privatization. The for-profit companies look for new sources of revenue including new out-of-pocket charges, user fees and two-tier services that allow the wealthy to jump the queue.

If the first for-profit hospitals in Ontario are not stopped, there will be a barrage of for-profit hospital redevelopments over the next few years. At stake is the future control and operation of our hospital and healthcare system.

Further Reading

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