Promises of efficiency through privatization are illusory
- Thread starter tay
- Start date
Heather Whiteside discusses how the privatization schemes being toyed with at all levels of government represent nothing more than reckless gambling with public money and goods:
When a federal, provincial, or municipal government builds a bridge, a highway, a school, or a hospital, we know who owns it: we, the people. But when equity changes hands, which happens frequently with these kinds of deals, the companies originally hired by the government to partner in a P3 are no longer the owners. So the private equity partners that any given government thinks it’s bringing to the poker game might not stay until the last hand is dealt.
Equity holders are the private partner of a P3 project. Their role is consequential: they run the operations and maintenance of whatever got built — a hospital, school, highway, or bridge. They set highway tolls, they collect user fees, they hire and fire staff, they set targets and standards. And they earn the revenue. Private profit, not necessarily high quality, affordable, accessible public services, would be their main priority.
When private partners sell their equity stake to new project companies after the P3 contract is struck, community projects are turned into mere budget line items in a global asset portfolio. Transactions favour the top bidder, not necessarily the best quality partner. Public assets become equity trading cards, changing ownership hands multiple times.
Whether highways or hospitals, the bottom-line determines the rules of the game and private partners are [hoarding] the gains. For instance, private equity in Vancouver’s Diamond Centre P3 hospital has already changed hands twice since 2007; but the hands of the hospital’s public partner are tied — the new equity holders hire and fire the cleaning and maintenance contractors.
...
Instead of opening the flood gates, the public must have a say: Canada should be taking steps to control or bar equity sales, to avoid a future where public infrastructure is exposed to remote investor decision-making, profit leeching through user fees, offshore revenue loss for communities, distorted value for money, and a lack of accountability.
Equity holders are the private partner of a P3 project. Their role is consequential: they run the operations and maintenance of whatever got built — a hospital, school, highway, or bridge. They set highway tolls, they collect user fees, they hire and fire staff, they set targets and standards. And they earn the revenue. Private profit, not necessarily high quality, affordable, accessible public services, would be their main priority.
When private partners sell their equity stake to new project companies after the P3 contract is struck, community projects are turned into mere budget line items in a global asset portfolio. Transactions favour the top bidder, not necessarily the best quality partner. Public assets become equity trading cards, changing ownership hands multiple times.
Whether highways or hospitals, the bottom-line determines the rules of the game and private partners are [hoarding] the gains. For instance, private equity in Vancouver’s Diamond Centre P3 hospital has already changed hands twice since 2007; but the hands of the hospital’s public partner are tied — the new equity holders hire and fire the cleaning and maintenance contractors.
...
Instead of opening the flood gates, the public must have a say: Canada should be taking steps to control or bar equity sales, to avoid a future where public infrastructure is exposed to remote investor decision-making, profit leeching through user fees, offshore revenue loss for communities, distorted value for money, and a lack of accountability.
P3s or private ownership of utilities is the only way to keep costs under control and keep politicians from manipulating fees for political gain.
In the 1980s when the NDP was busy destroying BC's economy electrical rates and ferry fares were kept artificially low to buy votes.To do this infrastructure mainainence and replacements were ignored with the exception of the spectacular disaster of the fast ferrys. Which were not. So here we are 16 years later still playing catchup on our most expensive infrastructure.
Ain't socialism grand?
In the 1980s when the NDP was busy destroying BC's economy electrical rates and ferry fares were kept artificially low to buy votes.To do this infrastructure mainainence and replacements were ignored with the exception of the spectacular disaster of the fast ferrys. Which were not. So here we are 16 years later still playing catchup on our most expensive infrastructure.
Ain't socialism grand?
Nonsense. There are publicly owned and operated utilities that do well compared to private corporations. Some municipalities that privatized utilities are having second thoughts. The world is not as black and white as you seem to think it is.
You're so clueless.
If the Harper Cons were doing this the howling would be deafening..........And no, I'm not endorsing the Cons, just saying......
Trudeau is fleecing Canadians with the new creation of his Infrastructure Bank
Buried deep within a 300 page omnibus bill affecting 30 different statutes lies the new monstrosity known as the Canada Infrastructure Bank.
For those unaware, the CIB, is a new privatized bank, being injected with $35 billion dollars of capital – on behalf of the taxpayer – in order to attract private investors who might be looking to invest in new infrastructure within Canada.
Of course, infrastructure is extremely necessary in Canada. The country has stagnated on development and new infrastructure is desperately needed to supplant our growing economy and population.
Saying all this however, with Trudeau looking to privatize infrastructure; we would be essentially selling off the sovereignty of our country to private billionaire investors – some of whom have been colluding with the government behind closed doors.
Indeed, deep within Bill C-44, lies this new development, which, at behind closed-door meetings, the Infrastructure Minister, and other members of the Cabinet, met with BlackRock faculty, who worked together to create the structure of this bank. Internal government documents reveal the extent of this collusion, and it was found that BlackRock, the largest asset managers in the world, were given unprecedented control over the intricacies of development regarding this new bank. The problem with this arrangement is that BlackRock themselves, are looking to invest into this newly created bank, spurring a serious conflict-of-interest.
Matthew Dube, NDP Critic for Infrastructure and Communities argued that,”It is a conflict-of-interest to allow private corporations, who will be the largest beneficiaries of the CIB, to participate in the planning and development of this bank.” There has been no direct response from the Liberal government concerning this insinuation.
Moreover, the bureaucracy goes even deeper as it appears that appointees from the private sector will be allowed to sit on the Board of Directors – no federal, provincial or municipal representatives will be allowed to sit on the Board, who would ensure that the public’s interest is held above all else. Indeed, it is important to get public representation, considering $35 billion dollars of taxpayer money is put into this bank’s development.
At least this Bill will be held under close scrutiny in the House of Commons to ensure we receive proper analysis and any recommendations for amendments, right?
Wrong. Trudeau is only allotting two hours of time to the Committee in the House of Commons, and is trying to ram this Bill as quickly as possible through Parliament. Our government is only allowing two hours of review on the bank and the giant omnibus bill; while BlackRock officials were given three months of time to work on the design of the CIB.
If this wasn’t enough to rouse a little apprehension; here are some more unsettling points, which are very much important to mention.
Firstly, let’s not forget that the Liberals campaigned on the promise of eliminating omnibus bills and ensuring transparency in government. With the advent of this new development, it seems Trudeau is doing the exact opposite he promised.
Secondly, the Government of Canada has the ability to borrow money necessary for funding infrastructure projects at 1-2%. At such low rates, we would be able to own our own infrastructure and put the money earned through various tolls and fees back into the public purse. Instead, the tolls and fees will be going into the pockets of wealthy financiers.
To add this to this point, Randall Bartlett, head of the Institute of Fiscal Studies and Democracy wrote a scathing review of the bank, mentioning that ‘private investors looking to invest will not be funding ‘greenfield’ investments, like roads or bridges, as these are unprofitable ventures, but rather in ‘brownfield’ investments, which are more profitable endeavours.’ Pension fund owners and private investors have also stated they wanted a return of 7-9% on investments over $500 million dollars. The only way to do this would be through projects that incorporate fees and tolls – meaning that taxpayers will be paying twice, once through their tax dollars and twice through potentially expensive fees.
Bartlett also goes on to say that Canada has failed to do sufficient analysis or review regarding our infrastructure needs, essentially saying that because we don’t have the necessary information instructing us on which infrastructure would be most beneficial, where we need it, and/or how we can get the highest returns, we would be taking a huge risk investing money into this bank, as it leaves the door open for inefficient infrastructure investments and misallocation of public funds, which would defeat the purpose of making these investments in the first place. Furthermore, projects built by private investors will be built with the intent of generating the highest returns for them, rather than generating the most efficient and effective system for Canadians.
Furthermore, should repairs be necessary, it will of course be taxpayers footing the bill, once investors realize that the crumbling infrastructure has lost its value.
Already Ontario has had a horrible experience with PPP’s (Private-Public Partnerships) like these. In her Annual Report, the Auditor General of Ontario found that PPP’s have costed taxpayers an extra $8 billion dollars.
more
Trudeau is fleecing Canadians with the new creation of his Infrastructure Bank - The Palladium
Trudeau is fleecing Canadians with the new creation of his Infrastructure Bank
Buried deep within a 300 page omnibus bill affecting 30 different statutes lies the new monstrosity known as the Canada Infrastructure Bank.
For those unaware, the CIB, is a new privatized bank, being injected with $35 billion dollars of capital – on behalf of the taxpayer – in order to attract private investors who might be looking to invest in new infrastructure within Canada.
Of course, infrastructure is extremely necessary in Canada. The country has stagnated on development and new infrastructure is desperately needed to supplant our growing economy and population.
Saying all this however, with Trudeau looking to privatize infrastructure; we would be essentially selling off the sovereignty of our country to private billionaire investors – some of whom have been colluding with the government behind closed doors.
Indeed, deep within Bill C-44, lies this new development, which, at behind closed-door meetings, the Infrastructure Minister, and other members of the Cabinet, met with BlackRock faculty, who worked together to create the structure of this bank. Internal government documents reveal the extent of this collusion, and it was found that BlackRock, the largest asset managers in the world, were given unprecedented control over the intricacies of development regarding this new bank. The problem with this arrangement is that BlackRock themselves, are looking to invest into this newly created bank, spurring a serious conflict-of-interest.
Matthew Dube, NDP Critic for Infrastructure and Communities argued that,”It is a conflict-of-interest to allow private corporations, who will be the largest beneficiaries of the CIB, to participate in the planning and development of this bank.” There has been no direct response from the Liberal government concerning this insinuation.
Moreover, the bureaucracy goes even deeper as it appears that appointees from the private sector will be allowed to sit on the Board of Directors – no federal, provincial or municipal representatives will be allowed to sit on the Board, who would ensure that the public’s interest is held above all else. Indeed, it is important to get public representation, considering $35 billion dollars of taxpayer money is put into this bank’s development.
At least this Bill will be held under close scrutiny in the House of Commons to ensure we receive proper analysis and any recommendations for amendments, right?
Wrong. Trudeau is only allotting two hours of time to the Committee in the House of Commons, and is trying to ram this Bill as quickly as possible through Parliament. Our government is only allowing two hours of review on the bank and the giant omnibus bill; while BlackRock officials were given three months of time to work on the design of the CIB.
If this wasn’t enough to rouse a little apprehension; here are some more unsettling points, which are very much important to mention.
Firstly, let’s not forget that the Liberals campaigned on the promise of eliminating omnibus bills and ensuring transparency in government. With the advent of this new development, it seems Trudeau is doing the exact opposite he promised.
Secondly, the Government of Canada has the ability to borrow money necessary for funding infrastructure projects at 1-2%. At such low rates, we would be able to own our own infrastructure and put the money earned through various tolls and fees back into the public purse. Instead, the tolls and fees will be going into the pockets of wealthy financiers.
To add this to this point, Randall Bartlett, head of the Institute of Fiscal Studies and Democracy wrote a scathing review of the bank, mentioning that ‘private investors looking to invest will not be funding ‘greenfield’ investments, like roads or bridges, as these are unprofitable ventures, but rather in ‘brownfield’ investments, which are more profitable endeavours.’ Pension fund owners and private investors have also stated they wanted a return of 7-9% on investments over $500 million dollars. The only way to do this would be through projects that incorporate fees and tolls – meaning that taxpayers will be paying twice, once through their tax dollars and twice through potentially expensive fees.
Bartlett also goes on to say that Canada has failed to do sufficient analysis or review regarding our infrastructure needs, essentially saying that because we don’t have the necessary information instructing us on which infrastructure would be most beneficial, where we need it, and/or how we can get the highest returns, we would be taking a huge risk investing money into this bank, as it leaves the door open for inefficient infrastructure investments and misallocation of public funds, which would defeat the purpose of making these investments in the first place. Furthermore, projects built by private investors will be built with the intent of generating the highest returns for them, rather than generating the most efficient and effective system for Canadians.
Furthermore, should repairs be necessary, it will of course be taxpayers footing the bill, once investors realize that the crumbling infrastructure has lost its value.
Already Ontario has had a horrible experience with PPP’s (Private-Public Partnerships) like these. In her Annual Report, the Auditor General of Ontario found that PPP’s have costed taxpayers an extra $8 billion dollars.
more
Trudeau is fleecing Canadians with the new creation of his Infrastructure Bank - The Palladium
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For once a clear, concise, straightforward, ambitious vision for the country
For once a clear, concise, straightforward, ambitious vision for the country
Even the hostess is giving him the stink eye as he rambles on about nothing.
If you think that Neo-liberalism is on life support in Canada, take a look at the Trudeau government's proposed infrastructure bank. Linda McQuaig writes:
The bank is being presented to the public as a way to attract billions of private sector dollars to help pay for our public infrastructure.
But the bank’s unusual design will also, for the first time, give powerful private institutional investors — even foreign-owned entities — the opportunity to actually own important pieces of Canadian infrastructure, with the ability to charge us fees for using them.
Ontarians got a taste of that when the Tory government of Mike Harris was outsmarted by private investors into handing over the lucrative Highway 407 toll road in a 99-year lease, for just a fraction of its value.
That's a radical departure from the way we used to think about infrastructure. We used to think that we, the citizens, owned the nation's infrastructure.But the bank’s unusual design will also, for the first time, give powerful private institutional investors — even foreign-owned entities — the opportunity to actually own important pieces of Canadian infrastructure, with the ability to charge us fees for using them.
Ontarians got a taste of that when the Tory government of Mike Harris was outsmarted by private investors into handing over the lucrative Highway 407 toll road in a 99-year lease, for just a fraction of its value.
But big institutional investors — pension funds, mutual funds, investment banks, etc. — are looking for investments that are safe and produce a reliable revenue stream.
Nothing fits that bill better, in these days of volatile markets, than investing in infrastructure, as a 2015 report by Wall Street giant JP Morgan documented. The report noted that, compared to other investment options, infrastructure assets offer very high returns, at very low risk, that they operate in monopoly situations free from competition and provide reliable revenue, even during economic downturns. “Infrastructure assets have produced stable, predictable and growing returns,” concluded JP Morgan.
Trudeau will attract big money to the bank. But, McQuaig writes:Nothing fits that bill better, in these days of volatile markets, than investing in infrastructure, as a 2015 report by Wall Street giant JP Morgan documented. The report noted that, compared to other investment options, infrastructure assets offer very high returns, at very low risk, that they operate in monopoly situations free from competition and provide reliable revenue, even during economic downturns. “Infrastructure assets have produced stable, predictable and growing returns,” concluded JP Morgan.
While the investment community’s enthusiasm for Canada’s new bank is clear, it’s less clear what’s in it for Canadians.
When tolls and user fees are added in, privately owned infrastructure could cost us more — and we’d own nothing.
Whether privately or publicly owned, Canadians will still end up paying for these assets, note analysts Azfar Ali Khan and Randall Bartlett in a report for Ottawa’s Institute for Fiscal Studies and Democracy. “[T]his does beg the question: Why would Canadians want to sell their most valuable assets to the private sector?”
We could own our own infrastructure through our own taxes. And borrowing costs are very low: When tolls and user fees are added in, privately owned infrastructure could cost us more — and we’d own nothing.
Whether privately or publicly owned, Canadians will still end up paying for these assets, note analysts Azfar Ali Khan and Randall Bartlett in a report for Ottawa’s Institute for Fiscal Studies and Democracy. “[T]his does beg the question: Why would Canadians want to sell their most valuable assets to the private sector?”
A new report questions the need for a Canada Infrastructure Bank as debate heats up in the House of Commons over a government bill to launch the $35-billion federal entity.
The University of Ottawa’s Institute of Fiscal Studies and Democracy argues that the Liberal government has yet to make a compelling case for why it would be better to work with private investors seeking higher returns when Ottawa has the ability to finance projects itself at much lower rates.
Authors Azfar Ali Khan and Randall Bartlett argue that with yields on 30-year Government of Canada bonds currently sitting at 2.2 per cent, Ottawa can borrow at much lower rates than what is available in the private sector
Now more than ever, there’s good reason to do so: Ottawa can borrow money at very low rates, much lower than the private sector. “With yields on 30-year Government of Canada bonds currently sitting around 2.2 per cent, the federal government can almost literally get ‘money for nothing,’ ” Khan and Bartlett note.
“The Liberal government is borrowing money it does not have, at reduced rates, so that Canadian taxpayers can finance and subsidize high rates of return for private international investors,”
But "tax" is a dirty word. Neo-liberalism is very much alive and well...........“The Liberal government is borrowing money it does not have, at reduced rates, so that Canadian taxpayers can finance and subsidize high rates of return for private international investors,”
The Trudeau government's efforts to draw in foreign cash to help fund big infrastructure projects in Canada will likely find little interest from China's deep-pocketed investors, the country's envoy to Ottawa says.
Ambassador Lu Shaye told The Canadian Press he doesn't think Chinese investors will want to endure what he described as lengthy regulatory processes required for Canadian infrastructure.
They would probably prefer to continue funnelling their investment dollars into regions with far fewer procedural hurdles, such as East Africa, he said
"I think it is not easy to build large-scale infrastructure in Canada -- I'm afraid that Chinese investors lack patience with this process," Lu said through an interpreter in an interview at the Chinese embassy.
"They're afraid that it would take too long to build large-scale infrastructure in Canada."
To lure more foreign investment into Canada, Prime Minister Justin Trudeau and his Liberal government have pitched the country to international investors as a stable place with a skilled workforce.
As part of the federal push to boost infrastructure investments, Ottawa is also establishing a $35-billion infrastructure bank to use public funds as a way to leverage billions more from private investors to pay for new, large-scale projects.
In exchange for their financial commitments, private investors would reap steady, predictable monetary benefits such as user fees or tolls.
But as the Liberals continue their quest for foreign infrastructure capital, they're unlikely to get much investment love from China.
"Maybe in Canada you have complete procedures for conducting large-scale infrastructure projects," the Chinese ambassador said. "In China, the procedures are also complete, but those procedures go very fast. So, to complete it, a project takes less time."
Lu brought up an example to make his point: a recent proposal to build high-speed rail corridor between Toronto and Windsor, Ont.
The rail line would stretch nearly 400 kilometres and aims to be fully operational in 2031, a time frame that includes construction and regulatory processes such as environmental assessments. Its estimated cost is $20 billion.
In comparison, Lu said, a recently completed Kenyan railway between Nairobi and Mombasa -- mostly funded by China -- took fewer than three years to build, from the planning stage to finish. He added that the project also included the construction of nine new stations along the 480-kilometre line.
The $4-billion Kenyan rail project, 90 per cent of it financed by China, faced criticism and protest because of its environmental impact. It cuts through Kenya's famed national wildlife parks and has affected the habitat of animals.
Last week, a $12-million, Chinese-funded bridge collapsed in another part of Kenya, creating embarrassment for its builder and for Kenyan President Uhuru Kenyatta, who is running in his country's August elections on a platform of improving its crumbling infrastructure.
Conservative foreign affairs critic Peter Kent said the Kenyan bridge collapse is an example of the failure of China's "infrastructure diplomacy" and something the government should be wary of.
"That's not unusual given some of the Chinese government's behaviours in the past -- building infrastructure, being paid for it, and under delivering," said Kent.
Chinese investors 'lack patience' for Canadian infrastructure rules: envoy | CTV News
Ambassador Lu Shaye told The Canadian Press he doesn't think Chinese investors will want to endure what he described as lengthy regulatory processes required for Canadian infrastructure.
They would probably prefer to continue funnelling their investment dollars into regions with far fewer procedural hurdles, such as East Africa, he said
"I think it is not easy to build large-scale infrastructure in Canada -- I'm afraid that Chinese investors lack patience with this process," Lu said through an interpreter in an interview at the Chinese embassy.
"They're afraid that it would take too long to build large-scale infrastructure in Canada."
To lure more foreign investment into Canada, Prime Minister Justin Trudeau and his Liberal government have pitched the country to international investors as a stable place with a skilled workforce.
As part of the federal push to boost infrastructure investments, Ottawa is also establishing a $35-billion infrastructure bank to use public funds as a way to leverage billions more from private investors to pay for new, large-scale projects.
In exchange for their financial commitments, private investors would reap steady, predictable monetary benefits such as user fees or tolls.
But as the Liberals continue their quest for foreign infrastructure capital, they're unlikely to get much investment love from China.
"Maybe in Canada you have complete procedures for conducting large-scale infrastructure projects," the Chinese ambassador said. "In China, the procedures are also complete, but those procedures go very fast. So, to complete it, a project takes less time."
Lu brought up an example to make his point: a recent proposal to build high-speed rail corridor between Toronto and Windsor, Ont.
The rail line would stretch nearly 400 kilometres and aims to be fully operational in 2031, a time frame that includes construction and regulatory processes such as environmental assessments. Its estimated cost is $20 billion.
In comparison, Lu said, a recently completed Kenyan railway between Nairobi and Mombasa -- mostly funded by China -- took fewer than three years to build, from the planning stage to finish. He added that the project also included the construction of nine new stations along the 480-kilometre line.
The $4-billion Kenyan rail project, 90 per cent of it financed by China, faced criticism and protest because of its environmental impact. It cuts through Kenya's famed national wildlife parks and has affected the habitat of animals.
Last week, a $12-million, Chinese-funded bridge collapsed in another part of Kenya, creating embarrassment for its builder and for Kenyan President Uhuru Kenyatta, who is running in his country's August elections on a platform of improving its crumbling infrastructure.
Conservative foreign affairs critic Peter Kent said the Kenyan bridge collapse is an example of the failure of China's "infrastructure diplomacy" and something the government should be wary of.
"That's not unusual given some of the Chinese government's behaviours in the past -- building infrastructure, being paid for it, and under delivering," said Kent.
Chinese investors 'lack patience' for Canadian infrastructure rules: envoy | CTV News