In the 2015 federal election, author and journalist Linda McQuaig ran for Parliament as an NDP candidate in the riding of Toronto Centre. Her opponent was Liberal candidate Bill Morneau, who won the riding and went on to become minister of finance.
During the campaign, Morneau and Liberal Leader Justin Trudeau championed the idea of creating a Canadian infrastructure bank, which would “provide low-cost financing for new infrastructure projects.” The bank would help finance things like public transit and housing, by borrowing the funds from the public through the sale of bonds to Canadians or their pension funds. People in Canada would finance the construction of infrastructure they benefit from (and own it, collectively).
“I thought it was a good idea,” McQuaig told me in a recent phone interview. “But he was being dishonest.”
After meeting the Wall Street tycoon Larry Fink, who manages BlackRock (one of the world’s largest investment funds) at a Davos meeting in 2016, Trudeau quickly changed his tune. Private capital could have a role in public infrastructure — in fact, he asked BlackRock to help his government design the bank.
In 2017, the prime minister and Morneau introduced the Canada Infrastructure Bank. The Crown corporation gives private capital the opportunity to invest in and own the infrastructure that is built for people in Canada. This “bait-and-switch” is the subject of the first chapter of McQuaig’s latest book, The Sport and Prey of Capitalists: How the Rich are Stealing Canada’s Public Wealth.
“Private finance looks for investments that make profits of seven to nine per cent,” says McQuaig. “Governments can borrow at low costs. You throw out that advantage if you bring in private finance.”
You also hand over any potential future profits, which otherwise could be reinvested in public programs. That’s exactly what happened when, in 1999, Mike Harris sold Ontario’s Highway 407 for $3.1 billion, in what McQuaig calls “the worst deal of the century.”
The toll highway, built in a public-private partnership, had been constructed by the NDP government of Bob Rae, who promised that the tolls would only be used to pay off the building costs, which might take about 30 years. Since its sale to the consortium 407 International, tolls have risen by more than 300 per cent. In 2014, 407’s owners reaped almost $900 million — all of it from Ontarians driving on a publicly financed highway. The highway has been valued at upwards of $27 billion.
As the book’s subtitle makes clear, McQuaig is interested in more than just our disastrous history of privatization. The bulk of The Sport and Prey of Capitalists tells a different, little-known history of public enterprise in Canada.
“When I say public wealth, it is services, benefits, things that we can publicly benefit from. Public wealth to me is a way to capture the notion that something is of value to all of us,” says McQuaig. “One of the things I was trying to do in the book, to get people motivated, was to tell them these stories about public enterprise and the kind of battles we had to go through to achieve them.”
Ontario Hydro is one such example. Adam Beck, a Conservative MPP and mayor of London, Ontario, played a key role in bringing together people from municipalities across the province to campaign for a public power utility in Ontario in the early 1900s. The campaign was successful. After the 1905 provincial election, the Conservative government rejected a corporate syndicate’s application for rights to water power at Niagara Falls. Premier James Whitney declared “that the water power all over the country should not in the future be made the sport and prey of capitalists and shall not be treated as anything else but a valuable asset of the people of Ontario.”
Such examples should inspire us, says McQuaig: “The odds against achieving these things back then were as bad then as today. But they managed to make it a popular enough movement.”
The book includes chapters describing the creation of Connaught Labs, a publicly owned pharmaceutical company that pioneered research into vaccines and new disease treatments; public banks like the Alberta Treasury Branch; and the Canadian National Railway, which helped establish nation-wide radio stations, the foundation for the CBC.
Progressives and radicals won’t necessarily praise all her examples of Canadian public enterprise (the development of the Avro Arrow — an innovative military fighter-jet created in the late 1950s, for example) but one can’t ignore the vital importance of harnessing government investment for the public good.
It remains to be seen if the results of the 2019 election will mean more Trudeau-led privatization, given the balance of power in Ottawa. One hopes the NDP will be able to use their position in Parliament to move forward on issues like public investment in infrastructure and programs, reconciliation with Indigenous nations, and climate change.
McQuaig canvasses one potential way to kickstart a “Green New Deal” in the final pages of the book: the expropriation of the GM auto-manufacturing plant in Oshawa, slated to close at the end of the year.
“Trudeau spent $4.5 billion nationalizing the pipeline. That’s taxpayer money being spent on fossil fuels, instead of a green economy,” said McQuaig. “I’d like to see Jagmeet Singh pick up on the plan put forward by workers at the GM plant to nationalize it and make vehicles for green public transit. It seems perfect. It would combine nationalization, action on climate change, and defending workers.”
Ultimately, this is the idea that lies at the heart of McQuaig’s book, for all the stories of privatization that begin it: the public good that we have achieved in the past through collective action and public investment, and the things we could still. SOURCE