Largest Union Applauds a Step-Back from a Bad Idea
[Oct 1, 2009 04:53 PM]
For immediate release: October 1, 2009
REGINA—The Canadian Union of Public Employees (CUPE) is applauding today what the organization’s provincial president is calling “a major step towards revealing the truth about P3s.”
The news that the Government of Saskatchewan has officially abandoned its Secretariat for investigating Public-Private Partnerships was well-received by the union, which has been a strong opponent to the ill-conceived finance and delivery model.
“Public-Private Partnerships have proven, world-wide, to be the most expensive and undemocratic form of privatization for taxpayers,” said Tom Graham, president of CUPE Saskatchewan. “Selling off public assets, awarding lucrative delivery contracts to for-profit providers and locking taxpayers into lengthy contracts with exorbitant prices and little control over quality and standards makes absolutely no financial sense.”
Graham added that the union is fully in favour of Saskatchewan’s private firms growing, profiting and contributing to Saskatchewan’s growing economy—but criticized the P3 model as an irresponsible way to spend tax dollars.
“When a service is being paid for by tax dollars, the government has a responsibility to provide the highest quality possible at the lowest price reasonable,” said Graham. “If tax dollars are involved, there also needs to be unfettered accountability and access for the public. When we fork over tax dollars to a private firm in order to commandeer a public service, we’re sacrificing accessibility and accountability, and always paying more to do it.”
A big contributor to the overall higher price tag of P3s is the expensive cost of private sector borrowing. This has become even higher in the context of recession.
Graham points to some of the countless examples of P3 failures and cost overruns. A recent report by B.C. Forensic Accountant Ron Parks concluded that the cost of the Diamond Health Centre as a P3 was $203 million, but would have cost only $89 million as a public project - a difference of $114 million or nearly 130 per cent. In December 2009, the Auditor General of Ontario reviewed the Brampton P3 Hospital and found that $200 million could have been saved if the public had borrowed the money directly to build the hospital. And, an additional $50 million would have been saved on construction cost and "tens of millions" more if they had not privatized laundry, food, cleaning and security services.
The City of Montreal was the most recent to scrap a flawed P3, when the P3 scheme for water meters was abandoned in September after a devastating report issued by the auditor proved that the city’s taxpayers would be on the hook for a sharp increase in costs.
In Hamilton, the private partner in a P3 wastewater deal refused to clean up its mistakes when 180 million litres of sewage flooded 70 homes and businesses—leaving taxpayers to pay for the cleanup after they paid the private firm to cause the mess.
“The endless expense of lawyers, middlemen, contract negotiations and consultants helps drive the costs and timelines to unreasonable levels, as well,” said Graham.
CUPE Saskatchewan noted that Saskatchewan’s residents may not be out of the woods, yet, when it comes to the possibility of higher cost, lower quality services through the P3 model of delivery. The Saskatchewan Party government noted that there may still be some consideration given to P3 projects in the province’s future—a possibility that Graham will be monitoring closely.
“New schools in Saskatoon, a new stadium in Regina or, potentially, future infrastructure for the delivery of nuclear power could all be targeted as P3 projects,” said Graham. “The fact is, P3s are privatization by stealth. It’s always going to be cheaper in the long run to buy than to rent, and we hope that our government continues to make responsible decisions when it comes to our infrastructure.”
CUPE Saskatchewan launched a campaign opposing P3s in March, 2009 called Pay More, Get Less. The union works to protect low-cost, high-quality public services for all its members and protect the jobs and welfare of public service workers.
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CUPE represents 29,000 front-line public sector workers in Saskatchewan who work in health care facilities, municipalities, school boards, universities, libraries, community-based organizations and more. CUPE is the largest union in Canada with more than 590,000 members.
For more information contact:
(306) 757-1009
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