The Liberal Government Says It is Looking to Privatize Municipal Water Systems Across Canada

Canada’s biggest public sector union calls the public-private scheme risky and expensive

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The Canada Infrastructure Bank (CIB) is looking to pressure cash-strapped municipalities into using Public-Private Partnerships to refurbish or replace water and sewage facilities, says a new report by CUPE.

The CIB recently pledged a $20 million investment as seed money to “attract private capital expertise” to the restoration of water and waste water service in Mapleton.

The Liberal government’s press release claims the partnership “demonstrates how the CIB can enable the public and private sectors to improve infrastructure delivery in Canada and help the Township of Mapleton continue to provide households and businesses access to clean drinking water using modern infrastructure.”

François-Philippe Champagne, federal minister for Infrastructure and Communities, is quoted calling the public-private plan a “new model” for cash-strapped cities.

But in a critical report, Canada’s biggest public sector union warns deals like the one in Mapleton actually “lock municipalities into inflexible and expensive contracts.”

“We’re very concerned this could be the start of a bigger push to privatize Canadian water and wastewater services,” CUPE president Mark Hancock told PressProgress.

“The risks include poor performance, which we’ve seen internationally and right here at home,” Hancock said, adding “cash-strapped local governments might feel like they have no other option.”

Hancock noted the City of Hamilton, Ontario took back control over its water and wastewater system in 2004 after private providers oversaw drastic job cuts and massive raw sewage leaks for more than a decade.

In one case, in January 1996, a record 182 million liters of untreated human waste, heavy metals and various chemicals poured into Hamilton Harbour and then into Lake Ontario. The International Consortium of Investigative Journalists notes the city put the blame on negligent private operators. McMaster University professors Frank Ohemeng and John K. Grant called it an example of the market’s “failure” to deliver essential services.

CUPE further noted, while P3s may ensure investors’ returns, that money doesn’t fall from the sky. “The local government has to pay those profits, which can get passed on to residents through higher taxes or user fees,” Hancock explained.

Finance Minister Bill Morneau previously refused to rule out using such fees to pay back investors.

Although the Federal Infrastructure Minister claims P3s transfers risk from the public, Hancock says that’s not true: “If a private operator fails, or backs out of a project, the municipality must pick up the pieces and keep delivering the service.”

Toby Sanger, executive director of Canadians for Tax Fairness, says private interests have tended to put only 15% equity at risk, with the rest being bonds that remain with the project. SOURCE

 

How Doug Ford’s Tories set the table for costly failure in teachers’ talks

Teachers, parents and students gather outside of Tory MPP Sam Oosterhoff's Niagara office on Nov. 14, 2019 to protest the Ontario government’s cuts to education. The cuts could come back to bite the government, Martin Regg Cohn writes.

The table is set for teachers’ bargaining. But it is set to blow up, booby-trapped by government blunderbuss.

Doug Ford won’t be the first premier to be entangled by teachers’ unions. But he will prove to be the most myopic, oblivious to the lessons of recent history and the author of his own misfortune — despite enjoying the good fortune of good economic times.

This month, as negotiations reached their culminations with the major teachers’ unions, the Progressive Conservative government conveniently passed into law a 1 per cent ceiling on the outcome. Put another way, it wants the talks over before they truly begin.

It is not just a formula for unfairness, but a recipe for failure. To understand why Ford’s bullying will boomerang, let us go back in time.

Remember Bob Rae’s NDP government? New Democrats thought they could coax teachers into sharing the pain of tough economic times with a “social contract” — which union leaders burned at the stake (big mistake).

From its ashes arose the “common sense revolution” of Mike Harris that didn’t quite decapitate its victims, as Robespierre’s revolutionaries once did, merely cut teachers off at the knees. It was the undoing of the Harris PCs.

After that scorched earth policy, Dalton McGuinty’s Liberals tried giving teachers what they wanted, including a handsome 12 per cent from 2008 to 2012. But when he asked for a freeze amid an economic crisis, he got the same cold shoulder that Rae received two decades earlier.

That’s when history was made. Joining hands with the opposition Tories, McGuinty’s minority government pre-emptively legislated restrictions on their collective bargaining rights. The Liberals won the day only to lose years later when the courts reinforced Charter rights for free collective bargaining unimpeded by political meddling.

His successor as premier, Kathleen Wynne, tried to make amends by giving teachers what they wanted ahead of the 2018 election. The elementary teachers’ union repaid that political debt by promptly endorsing the NDP (which didn’t stop Ford’s Tories from triumphing).

Which takes us to today, and back to the future. Like Harris before him — and without learning the lessons of McGuinty after that — our current premier has set the stage for confrontation.

With a difference. In their defence, the Liberals in 2012, like the PCs and NDP in the 1990s, were facing undeniable constraints — a recession, a runaway budget, and an economic crisis.

Today’s Tories, not so much. To be sure, there is a debt overhang, but the deficit figures are dramatically overstated — literally and figuratively speaking:

A $15 billion deficit trumpeted by Ford proved to be a fiction of his fertile imagination — disputed even by the auditor general, and disproven by his finance minister (who restated the deficit at $7.4 billion for the last fiscal year). A scary deficit helps set the context for cuts, but an overstated deficit only undercuts the case.

An inflated deficit devalues the currency of public finances and undermines the government’s public credibility. Not merely with teachers, but parents and voters (not to mention students).

Pretending that we face an economic emergency — as the premier did earlier this year with dark talk of a “carbon tax recession” — is not only irresponsible but unsupportable. The government’s own spring budget and fall update show steady economic growth today continuing through the next two years, with unemployment at the lowest level in decades.

So by what possible metric — deficit, economic or employment — do the Tories justify a harsh crackdown against teachers and other public servants, who faced wage austerity in 2012 amid the last (genuine) economic downturn? The only metric that matters is self-interest

During the recent federal election campaign, Ford fell on his sword to avoid school closures by CUPE support staff — ostensibly to spare students any hardship, but more obviously to shield his fellow Tories on the campaign trail from any fallout. Having conjured up a midcampaign truce with CUPE, the Tories are now gunning for a post-election confrontation with the remaining teachers’ unions.

It is not just unfair and unjust, it is politically injudicious. And almost certainly unlawful.

How does this government explain its phoney war to teachers and students, parents and voters, all of whom will pay the price for its miscalculations? Tell it to a judge. SOURCE

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Teachers tell Ford to stop hurting the children

Privatizing Canada’s Water Infrastructure Should be an Election Issue

With the Canadian federal election just days away, it’s amazing that there’s been no media focus on the Liberals’ plan to privatize our municipal water and wastewater systems. As far as I can determine, only one alternative media site, Press Progress, has mentioned this worrisome plan, which was announced by the Canada Infrastructure Bank (CIB) on July 15, 2019 when it agreed to provide $20 million in “innovative financing” for a public-private partnership (P3) in Mapleton, Ontario.

The Township of Mapleton is seeking a private consortium to design, build, finance, operate and maintain the municipality’s new and existing water and wastewater infrastructure for twenty years. By committing $20 million to the project, the CIB claims it “will improve the cost of project financing and attract private capital expertise while ensuring appropriate risk transfer to the private sector.” The CIB considers this a “pilot project to demonstrate new models for structuring and financing smaller municipal water and wastewater infrastructure projects.” [1]

Confusing Spin

There’s a lot of confusing jargon and spin in those statements, but the Canadian Union of Public Employees (CUPE) has cut through it with this observation: “There’s nothing new about federal programs and institutions that try to make P3s more palatable, especially to smaller municipalities. In this case, the CIB will subsidize the borrowing costs for corporations bidding on the 20-year deal … The bank is offering to lend the private sector money at a lower rate than corporations could get on their own. Details about the loan terms are blacked-out in public documents about the deal.” [2]

While the Township of Mapleton will still retain ownership of the core assets, the consortium that wins the contract will obtain a secure stream of profits from operating and maintaining the system for the next twenty years. No doubt, rates to homeowners will have to rise, as the consortium will want a solid return on its investment.

So what is this “new model” for structuring and financing such projects? We taxpayers will subsidize the borrowing costs of the private sector so they can privatize the revenue stream from our water and wastewater systems. Moreover, according to CUPE, Mapleton Township will have to pay back the $20 million to the CIB. [3]

In other words, the Canada Infrastructure Bank is hoping to prove that not only is there a sucker born every minute, but most of them live right here in Canada.

Breaking New Ground?

As CUPE President Mark Hancock told Press Progress,

“We’re very concerned this could be the start of a bigger push to privatize Canadian water and wastewater services.” [4]

That concern is shared by the Council of Canadians, which recently stated:

“One challenge to the commitment to public water services is governments’ growing reliance on public-private partnerships (P3s). The Canadian government is imposing new and higher standards on municipal wastewater treatment across the country – which is a good thing for water safety. However, it appears the only funding for this is through the Canadian Infrastructure Bank, which is run by corporations and promotes P3s. The changes from the new regulations must be in place by 2020, limiting municipal governments’ options to choose public solutions.” [5]

The Canada Infrastructure Bank (widely known as the “privatization bank”) is apparently keen to open up this sector for corporate profits. As CUPE notes,

“The CIB’s mandate is clear. It’s trying to break new ground in a sector where there are very few P3s. In 2016, Statistics Canada reported that municipal and regional governments owned 3,400 water and wastewater facilities. Fewer than 20 municipalities have privatized their systems through some form of P3. The bank is zeroing in on the smallest communities, and is using Mapleton township as a pilot project.” [6]

The business case for the Mapleton project was presented to the town council by PriceWaterhouseCoopers (PwC), one of the top global consultants that facilitate P3s. Not surprisingly, PwC recommended the CIB’s financing model.

With municipalities struggling financially across the country, and with many water and wastewater systems in need of upgrading, refurbishment, or outright creation, no doubt the private sector is thrilled about the new “innovative financing” from the CIB.

Just weeks after the CIB announcement about Mapleton Township, Google parent company Alphabet Inc. and affiliate Sidewalk Labs announced in August 2019 that they are partnering with the Ontario Teachers’ Pension Plan to launch a new company that invests in North American infrastructure. The new company, Sidewalk Infrastructure Partners, will operate and invest in five areas, including “water and waste”. [7]

MORE

NOTES:

[1] “Canada Infrastructure Bank Announces up to $20 Million Investment Commitment in Mapleton Water and Wastewater Project,” Canada Infrastructure Bank, July 15, 2019.

[2] “Infrastructure bank targets local water systems,” Canadian Union of Public Employees, July 19, 2019.

[3] Ibid.

[4] “The Liberal Government Says It’s Looking to Privatize Municipal Water Systems Across Canada,” Press Progress, August 6, 2019.

[5]”Whose Water is it, Anyway? book tour brings idea of Blue Communities across Canada,” Council of Canadians, September 25, 2019.

[6] “Infrastructure bank targets local water systems,” op cit.

[7] The Canadian Press, “Sidewalk Labs and Ontario Teachers’ Pension Plan to launch infrastructure company,” CBC News, August 29, 2019.

Blaine Higgs’ populism undermined by his hardline stance towards labour


File photo of Sharon Teare, president of the New Brunswick Council of Nursing Home Unions, part of CUPE. Photo by Stephen MacGillivray

Despite his folksy charm, Conservative Premier Blaine Higgs has shown scant sympathy for New Brunswick’s workers in a simmering labour dispute he inherited. Higgs’s hard line stems from a belief that his government is broke — but it also resembles the hardball approach Irving Oil took toward its refinery workers back in 1994-96, when Higgs was an executive at the company.

The current contretemps came to a head this past May, when Sharon Teare, president of the New Brunswick Council of Nursing Home Unions, which represents 4,100 mostly female nursing home workers at 46 provincially financed retirement homes, angrily confronted Higgs, shouting at him during a media scrum in the legislature.

Teare was ticked off because her union, part of the Canadian Union of Public Employees (CUPE), has spent two and a half years attempting to get a new collective agreement from an indifferent government.

She is unrepentant about challenging Higgs. “He wanted me banned from the legislature” after the confrontation, she said, shaking her head.

Her members get paid $18 to $24 an hour and work in often difficult circumstances, including chronic understaffing, added Teare. “Physically, emotionally and mentally, we are depleted,” she said.

CUPE workers protesting outside the offices of New Brunswick’s minister of social development in May 2019. Photo courtesy CUPE
Nursing home standoff caused by 2009 law

The roots of the labour dispute go back to 2009, when the province passed a law greatly restricting the ability of nursing home workers to strike. In the following years, the government increased wages by just one per cent per annum. With the cost of living rising 15.5 per cent since 2011, the buying power of nursing home workers has fallen 7.5 per cent.

Last year, a provincial labour board said the workers’ charter rights had been violated by the 2009 law. But the Higgs government rushed to court to prevent a walkout, while also refusing to send the matter to binding arbitration.

A week before her confrontation with Higgs at the legislature, Teare met privately with Higgs to see if they could resolve matters. But this meeting only occurred after CUPE occupied the constituency offices of eight cabinet ministers and organized a three-day sit-in outside the offices of the minister of social development.

Teare says Higgs listened to her and was respectful, but also told her “I cannot move off the ones,” meaning he wouldn’t consider a wage increase of more than one per cent per year. CUPE is seeking an increase above the cost of living. “He is not open,” Teare said. “He will talk to you and look at you when he is speaking and acknowledge your words, but he is taking a business approach to health care.”

Higgs’ refusal to budge led all three opposition parties to hold a vote in late May, asking the government to enter binding arbitration. Higgs didn’t blink, baiting the opposition to force an election over the issue, perhaps confident in his standing in the polls. The courts, meanwhile, have ordered the province to rewrite the 2009 law by this winter.

Higgs cut budget to pay down debt

Higgs’ position on wages is part and parcel of his goal of balancing the budget. New Brunswick is paying nearly $700 million in annual interest payments on its $14-billion debt load — one face of a province that lags on almost any socioeconomic indicator you care to name, except for the spectacular wealth of one family: the Irvings.

This year, Higgs cut $265 million from the provincial budget to help pay down debt, which is falling for the first time in more than a decade. However, this accomplishment was assisted by a $185-million increase in federal transfer payments from the Trudeau government — the very government the fossil-fuel-friendly Higgs hopes will lose in this fall’s federal election.

This makes it ironic that Higgs has cozied up to Alberta’s new premier, Jason Kenney, since Kenney has demanded the end of transfer payments from provinces such as Alberta to provinces such as New Brunswick. (Higgs has said in the past that he too would like to see transfer payments cut.)

Overall, Higgs chopped payments to child welfare, disability support services, income security, housing services, wellness programs and training programs for nurses. He postponed a planned museum in Saint John, withdrew support for the 2021 Jeux de la Francophonie (Francophonie Games) and delayed the upgrading of a dangerous highway.

But his most controversial cut was a program offering free university tuition to low-income students. “Wherever I go, especially in poorer places in New Brunswick, people are coming up to me and literally telling me because of that [decision], my son or my daughter is not going to be able to go to school,” Liberal Leader Kevin Vickers said.  MORE

The Canadian Green New Deal and migrant justice

Image: kai kalhh/Pixabay

The Canadian Green New Deal movement is picking up steam, as prominent activists join forces with over 80 organizations to demand radical change.

On June 11, Indigenous lawyer Pam Palmater and journalist Naomi Klein were two of the speakers at a Green New Deal town hall in Toronto. More town halls are planned in the next few weeks, with an open invitation to organize events to anyone committed to building the movement.

Instead of implementing temperate solutions such as the carbon tax, the Canadian Green New Deal calls for an economy that redistributes wealth and resources to benefit the vast majority of the population while drastically reducing emissions.

That translates into transformative action on “systems of transit, energy, housing, agriculture, and public services” as well as addressing migrant justice.

“The migrant labour piece needs to be central in that,” says Karen Cocq, an organizer with the labour-advocacy group Fight for $15 and Fairness.

Alongside multiple unions such as CUPE, the Green New Deal coalition includes labour advocacy groups including Migrant Rights Alliance for Change.

Cocq emphasizes solidarity with Indigenous peoples in Canada and abroad who have been displaced due to corporate extractivism, leading to disruption and forced migration. MORE