Two people in business attire give each other a high five.
Two people in business attire give each other a high five. Credit: krakenimages / Unsplash Credit: krakenimages / Unsplash

Governments at every level have a big revenue problem. This is largely a problem of their own creation. For decades Conservative and Liberal governments, under the cover of tax cuts for the general population, made massive tax cuts to the wealthy and their corporations. Now to solve their revenue problem to build critically needed infrastructure, they are turning to this very same corporate class selling the myth that somehow free money is to be had from Public-Private partnerships known as P3s

Trudeau introduced his P3 infrastructure bank in 2017 and is now going full steam ahead with a P3 High Frequency Rail (HFR) project between Quebec City and Toronto. Trying to solve revenue problems in Ontario, On November 2 last year Premier Ford announced the creation of an infrastructure P3 bank here in Ontario. 

In whose interests are the Proponents of public Private Partnerships operating? Claims of “increased efficiencies” “innovation” and now “Dynamism” are completely false. In the past proponents have claimed that they were off loading risk onto the private partners. All completely bogus.

P3s are nothing more than public relations and publicity ploys to pretty up profit

Make no mistake P3s are privatization. There are three kinds of privatization. First is the outright sale of a public asset or service. The second is leasing public assets to the private sector. The third and most insidious form of privatization are Public Private Partnerships P3s. 

The record of P3 privatizations around the world is dismal. Before the P3 High Frequency Rail project gets under way, we should look at what happened when rail was privatized in the UK. It is a national joke. In fact, the privatization of electricity, water, rail and hospital construction has been a complete failure there. New Zealand and Australia also had expensive experiences with P3 privatizations in school and hospital construction 

The most famous privatization gone bad was Cochabamba, Bolivia when water was privatized and martial law was declared there after two popular uprisings, then water was put back under public control. In Europe the deprivatization trend in 2010 saw most water and electricity facilities that were leased or sold to the private sector were brought back under public control. 

READ MORE: P3 banks a bad idea

One doesn’t have to look far for failed examples of privatization. The privatization of long-term care homes where more than 4,000 people died during the COVID-19 pandemic, many from neglect. The privatization of Highway 407 and Ontario Hydro has left the people of Ontario with no appetite for any more privatization of public assets. The privatization of Connaught lLabs a legacy left by Prime Minister Brian Mulroney, hurt us badly during the pandemic. The privatization of the Bruce nuclear plant in a long -term lease was one of the worst. The profits were privatized but the debt risks and pollution remained public.

Governments did not privatize public assets during the First or Second World Wars nor did they during the Great Depression. They wisely kept those public assets for the future. We worked our way out of those terrible times by cooperating in a robust public sector and non-profit public enterprise and that is what we must do now.

We have a very good example of how to do that. In 1905, forward looking Conservatives brought in Public Power in the province of Ontario with the motto “power at cost for the people”.  Rates dropped by half. The rest of the country quickly copied that model, making Canada’s economy very successful. 

In the end, there is no free money. P3s are a very expensive and inefficient way of financing infrastructure and services. They hide public borrowing while at the same time provide long term government guarantees of profits to private companies.It is a big mistake to bring in P3’s. Close P3 infrastructure banks or we will pay and pay.   Reversing tax cuts on the wealthy and their corporations is not raising taxes, it is restoring revenue to build a civil society.