One thing about the times we live in is that pretty much all political debate sounds like a broken record. No matter how bad the outcomes or how much evidence is against them, people simply refuse to let go of their cherished ideological sacred cows. Case in point: privatizing government services. From assorted National Post drones to innumerable conservative politicians, the same tune has been spun for decades, which is that the public would get better service and costs would be lower if government services were privatized. It almost never works out that way, for a simple, obvious reason: Governments. Don't. Exist. To. Make. Profits.
In 2008, the city of Chicago privatized parking meters. The rates immediately went up; by 2013, they had already more than doubled, and by 2019 the private company was collecting 583 percent more revenue than the city did in 2008. In little more than 10 years, the investors in the private company had already made back $500 million more than the entirety of their initial investment, and the deal still had 54 more years to go. Chicagoans were so incensed by the price increases that many machines were vandalized and rendered inoperable. Eventually, a boycott was organized, but that just ended up hurting downtown businesses.
In 1999, the Mike Harris government in Ontario sold the 407 Highway to a private consortium. Harris promised that tolls would only rise with inflation, which was estimated to be about two percent a year, so about 30 percent over 15 years. Care to guess what actually happened? After 15 years, tolls on the 407 had risen by 300 percent, or ten times what the government promised, pushing the rush hour driving cost from Burlington to Pickering to more than $40. The consortium is an all-around slimy operator, 'suppressing' unpaid bills by not sending out reminders but continuing to tack on penalties and interest until the amounts owed become astronomical. In one case a man who moved away for six years received a bill for $43,000 when he moved back to Ontario. But don't worry, the contract the Harris government signed only has 77 years left on it. I'm sure Ontarians will get a much better deal in 2098...
There are literally dozens of failures here in Canada that I could cite. There's the Health Resource Center in Calgary, which is a private clinic that performs orthopedic surgeries. It somehow went bankrupt in 2010 and had to be bailed out to the tune of $4 million. Halifax privatized snow removal and saw complaints of property damage rise by 75 percent. The city had to terminate two contractors and fine several others for failing to meet minimum service standards. Alberta's privatized registries have been repeatedly caught accepting bribes in exchange for fake licenses and false certifications and the province has had to notify other provinces that more than 600 drivers, many with fraudulent semi-truck licenses, haven't been trained or even tested. A series of both Liberal and Conservative Ontario governments have made blunder after blunder with privatization. In 2015, the province's Auditor General revealed that the use of public-private partnerships (P3s) for public infrastructure had cost the citizens of Ontario nearly $8 billion more over the previous nine years than if the government had built the projects itself. Further, these P3 projects have left the province with $28.5 billion in future liabilities to private entities.
Like so many things these days, it's hard to tell whether the people clinging to this idea are stupid, corrupt or some combination of the two. Ideological rigidity is a disease that infects all sides in politics, but especially on the Right, where they recycle the same old policies over and over even in the face of clear evidence that they don't work. The logic behind privatization - that government is inept and too bureaucratic and that only the private sector's profit motive can save us from waste and inefficiency - is a child-like oversimplification that doesn't stand up to even the mildest scrutiny.
Firstly, if you've ever dealt with a huge company, you know that they are just as inflexible and administratively bloated as any government entity. If you don't believe me, try calling your bank or cell phone provider for help with a problem. Secondly, an even cursory reading of the history of capitalism will clearly show that the profit motive guarantees neither good service nor efficiency, especially when there is little or no competition, which is almost always the case when government services are privatized. I guess if you don't like the tolls on the 407, you can take a helicopter to work, right? Without competition, "the customer is the enemy", to paraphrase a famous quote from an Archer Daniels Midland executive in 1994.
Admittedly, corruption is a pretty strong word. But many of the privatization deals made by governments are outrageous bargains. Why did another Ontario Conservative government sell the province's 50 percent stake in Teranet, the electronic land registry, for a valuation of $740 million when even the most conservative (pun intended) estimates put its value at around $2 billion? A portion of the profits from these sorts of sweetheart deals often gets funnelled back to a government in some form, and even when they don't, being pro-privatization colors people as 'business friendly' and that definitely keeps the big donations rolling in. The Fraser Institute, the main intellectual water carrier for privatization here in Canada, has tried to keep its financial information hidden, but various reports have shown donations from the Koch brothers, ExxonMobil, billionaire businessman Peter Munk and the pharma company Eli Lilly. So yeah, definitely not the ordinary Canadian taxpayers who actually use the government services in question.
Of course there are a few successful privatization examples, such as Alberta's liquor stores. But these are usually things the government probably shouldn't have been doing anyway; it's fairly silly to think selling beer is a necessary government service. But where the purpose is actually serving the public at large with common goods - things like prisons, parks, health care, highways, etc. - the record of privatization is simply abysmal. But you can bet that won't stop them from doing it again and again...and again.
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