Tag Archives: Canada

Social Impact Bonds wrong direction for Manitoba’s social services

Source: CUPE, July 6, 2017

Today the Manitoba government announced the opening of a request for proposals for Social Impact Bonds, a scheme in which private companies profit off social service delivery. “There was a time when the private sector would simply make philanthropic donations as part of their corporate responsibility to the community” says Terry Egan, President of CUPE Manitoba. “Social Impact Bonds take that corporate philanthropy and turn it into a private money‑making scheme.” While Pallister claims that Social Impact Bonds would foster “private-sector innovation,” these companies will seek to invest in only the non‑government agencies that would see profitable outcomes, rather than programs that seek to address long‑term root causes of many of societies deep and complex issues, including poverty. …

Canadian town picks Uber for public transit

Source: Stephen Shankland, CNET, April 4, 2017

… Innisfil, population 32,727 as of 2014, concluded in a March council meeting that subsidizing the car-hailing service was a better deal than paying for a bus line. The city plans to pay 100,000 Canadian dollars (about $75,000) for a first stage of the program and CA$125,000 for a second round about 6 to 9 months in. That compares to CA$270,000 annually for one bus and CA$610,000 for two, the town said. The town evaluated on-demand transit proposals as an alternative to buses. … Innisfil will subsidize Uber trips so citizens pay between CA$3 and CA$5 themselves, depending on the destination, the town said. …

Private financing wrong direction for Canadian infrastructure bank

Source: CUPE, March 20, 2017

A new report written by CUPE economist Toby Sanger warns that private financing of the proposed Canada Infrastructure Bank could double the cost of infrastructure projects, and shows how the bank can instead provide low-cost, public financing for much-needed projects. The study was published by the Canadian Centre for Policy Alternatives in advance of the federal budget, where more details of the proposed bank are expected to be unveiled. Sanger outlines the dramatic shift from Liberal election promises of a bank with low-cost financing to the current plan, which focuses on higher-priced private borrowing. The shift will increase pressure to privatize key infrastructure, and will mean less public funding is available to deliver public services and infrastructure. … The study outlines how the federal government could establish a Canadian infrastructure bank that works in the public interest by providing low-cost financing for public infrastructure.

Read full report.

Public works committee debating plan to privatize garbage collection in Scarborough

Source: Chris Fox, CP24.com, January 18, 2017

A proposal to privatize garbage collection in Scarborough is on the agenda today as the public works and infrastructure committee meets at city hall. Staff are recommending that the city hold a managed competition procurement process for District 4, which includes all of Scarborough, while leaving garbage collection in District 3 to unionized city workers for now. The managed competition procurement process would allow both private companies and the city’s unionized workers to submit bids. … While staff are only recommending privatizing garbage collection in Scarborough right now, the report states that the results of the change will be used as a “guide for future service delivery recommendations” in District 3, which includes the downtown neighbourhoods east of Yonge Street. Officials with CUPE Local 416 have estimated that the privatization of garbage collection in District 4 could mean the loss of 200 to 250 unionized jobs. Those job losses would come after the elimination of 150 positions when garbage collection was first privatized in the west end in 2012.

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City officials to report on privatizing trash collection east of Yonge
Source: Shawn Jeffords, Toronto Sun, November 21, 2016

The city is on track to contract out garbage collection east of Yonge St. Councillors on the public works committee voted 3-1 in favour of having city officials report early next year on a path to privatization. The committee made the move a day after Mayor John Tory told the Toronto Sun he will push to contract out garbage in the east end, arguing that it’ll save money. City council will have final say on the controversial issue at a later date. The mayor’s proposal was met with anger from the union that represents the city’s garbage collectors, insisting contracting out their work will not save taxpayers cash. Matt Figliano, of CUPE Local 416, said Tory doesn’t “have the facts.” He referred to a 2015 consultant’s report that said there was no cost savings to be had by contracting out. … The union accused Tory of attempting to fire 500 workers. If the city wants to find savings, it should eliminate managers, Figliano said. “For every four members that we have, we have one manager or supervisor that makes six figures. You’re attacking the hard-working men and women that make an average $50,000 a year. It’s a bloated bureaucracy, that’s what this is,” he said. Councillor Joe Mihevc said the city already has the right balance on trash collection that allows it to get the best cost, a mix of private and public collection. … Deputy Mayor Denzil Minnan-Wong said he doubts the Ernst and Young report is correct given past experience with contracting out garbage collection in the west end. That saves the city $11.7 million a year. …

Garbage Privatization: Inside Toronto’s Two-Tier System
Source: Stefan Novakovic, Urban Toronto, November 18, 2016

Following the Ford administration’s privatization of residential garbage pick-up east of Yonge in 2011, the City of Toronto’s waste management has remained in a somewhat awkward state of semi-privatization. While residential trash west of Yonge is handled by private companies, the east end remains the purview of City service. However, with Mayor Tory now moving forward with a 2014 campaign pledge to outsource the City’s remaining garbage collection, the whole of Toronto could be moving towards private collection. But how does privatization work? And what are its impacts? In Toronto, the answers to these questions are at once relatively simple and profoundly complex. That’s because there are actually two types of privatization. While the City’s controversial outsourcing of pick-up and disposal follows a relatively straightforward process, a parallel form of privatized service follows different rules. … The privatization of service proposed by Mayor Tory follows a pair of earlier initiatives. A 1995 agreement saw pre-amalgamation Etobicoke privatize collection over two decades ago, while Rob Ford’s 2011 privatization of garbage service west of Yonge effectively bifurcated the city between public and private collection. In both instances—as in Tory’s current pitch—the outsourcing came about as a cost-saving measure. Following privatization, Etobicoke reported average annual savings of $1.8 million, while Ford’s initiative initially saw yearly costs reduced by $11.9 million. With support for Municipal service also hampered by two long and memorable garbage strikes in 2003 and 2009, the push for privatization was relatively well received in subsequent years. In particular, widespread displeasure with the 39-day garbage strike of 2009 eroded public backing for Toronto’s Civic Employees Union (CUPE). Nonetheless, some critics perceived privatized service as an inherent reduction in accountability in transparency, and as a symptom of unwillingness to adequately engage with the rights of unionized labour. …

Statement from CUPE 416 regarding city, Ernst and Young Reports regarding further contracting out of solid waste management
Source: Canadian Union of Public Employees, September 16, 2015

Earlier today, City of Toronto staff released their report on the benefits and drawbacks of contracting out solid waste management east of Yonge Street. This report was further supported by an independent analysis from accounting firm Ernst and Young. … While we strongly believe that public services like solid waste collection are best delivered directly by municipalities, the mixed model currently in effect in Toronto is an effective one which makes sense for residents.

City staff advise against contracting out east-end garbage
Source: Jennifer Pagliaro, Toronto Star, September 15, 2015

Mayor John Tory’s council allies are questioning the numbers used by city staff to recommend against contracting out garbage collection east of Yonge St. A report released Tuesday found it may actually cost more to privatize pickup in at least one east-end district despite what the city says was $11 million in annual savings from contracting out the same services in the west end. That creates a challenge for Tory, who during the mayoral election promised to privatize the remaining garbage pickup, citing cost savings — a long-held position by rivals Rob and Doug Ford. … taff tried to estimate what it might cost to contract out collection versus public service pickup over seven years, from 2017 to 2023. They compared the cost of contracted-out service in Etobicoke’s District 1 to in-house service in Scarborough’s District 4. They based the contract cost on the most recent garbage contract secured in 2014 for District 1. According to the city, those two suburban districts have comparable geography and building characteristics. Staff found the future cost reflected in present dollars of in-house service in District 4 — $96.8 million — is cheaper than assumed District 1 contracting-out costs at $116.8 million. …

Curbside Waste Collection Services Review: Comparison of Curbside Waste Collection Services East and West of Yonge Street
Source: General Manager, Solid Waste Management Services, City of Toronto, Canada, September 9, 2015

The purpose of this report is to present the findings on the comparison of curbside collection districts in terms of costs, diversion rates, service levels and performance. It also provides an analysis of the financial and collection implications associated with the scenarios for contracting out collection services east of Yonge Street (Districts 3 and 4). A review of waste collection service delivery approaches in similar jurisdictions has also been undertaken. An independent financial analysis verification of the analysis was conducted by Ernst & Young LLP and is provided in Appendix C.

Defeating P3s at the ballot box in Comox Valley

Source: Canadian Union of Public Employees, November 21, 2016

Residents of Union Bay, Royston and Kilmarnock also said no to privatized wastewater treatment in a referendum held this past June. An overwhelming majority of voters (75 per cent) turned down a proposed P3 that would have seen the Comox Valley Regional District sign a 30-year contract with an unknown private for-profit corporation. After learning that a referendum would be taking place, CUPE 556 members quickly mounted a campaign asking residents to support “affordable, accountable, public sewage”. The local worked with CUPE National staff in developing a campaign that focused on educating voters about the risks of P3s. … Smaller communities have also been successful in contracting in work. During the fall of 2015, Revelstoke was able to keep garbage collection services in house by proposing several alternate options to the status quo.  And in April CUPE 608, representing employees of the Town of Osoyoos, was able to successfully contract in work providing janitorial services for summer washrooms and other civic facilities. The Town decided to explore other options than the contractor they were using at the time after an incident in which the contractor left the washrooms unlocked overnight, resulting in damage to City property. …

Bring it on home: How CUPE campaigns are keeping services public

Source: Canadian Union of Public Employees, November 21, 2016

Throughout BC, CUPE members have been key players in the effort to keep services public or bring them back in-house. Our members have led effective campaigns to ensure that residents are getting cost-effective, transparent and reliable services. This compilation of stories, first published in CUPE BC’s Public Employee magazine, highlights some recent contracting-in success stories.

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What Happens When Privatization Doesn’t Work Out
Source: Katherine Barrett and Richard Greene, October 2016

Privatization is one of the hottest topics in state and local government. Google the word and you come up with around 12 million entries. But for all the articles and academic reports on the best approaches to outsourcing government services, there’s also a surprising amount of activity around insourcing. These days, roughly the same percentage of services that are newly being contracted out are being brought back into the government fold, according to Mildred Warner, a professor of city and regional planning at Cornell University. Her examination of data accumulated by the International City/County Management Association (ICMA) for the period from 2007 to 2012 showed that new outsourcing accounted for 11.1 percent of all services and new insourcing accounted for 10.4 percent of all services. … According to Warner’s analysis of ICMA data, the two main reasons governments reverse their privatized services are inferior service quality and a lack of anticipated cost savings. Additionally, improvements in the capacity of local governments to work with greater efficiency can make them the more appealing alternative. …

Back in House: Why Local Governments are bringing services home
Source: Keith Reynolds, Gaëtan Royer and Charley Beresford, Centre for Civic Governance, 2016

Summary:

Back In House: Why Local Governments Are Bringing Services Home, a new report from the Columbia Institute, is about the emerging trend of remunicipalization. Services that were once outsourced are finding their way back home. Most often, they are coming home because in-house services cost less. The bottom-line premise of cost savings through outsourcing is not proving to be as advertised. Other reasons for insourcing include better quality control, flexibility, efficiency in operations, problems with contractors, increased staff capacity, better staff morale, and better support for vulnerable citizens. When services are brought back in house, local governments re-establish community control of public service delivery. The report examines the Canadian environment for local governments, shares 15 Canadian case studies about returning services, follows-up and reports back on two earlier studies promoting contracted out services, provides a scan of international findings, and shares some best practices and governance checkpoints for bringing services back in house. Many of the local governments examined employ CUPE members. As part of our ongoing work to promote the value of publicly-delivered services, CUPE helped fund the production of the Columbia Institute report Back in House

Read full report.

Sask. government introduces law to define ‘privatize’

Source: Stefani Langenegger, CBC News, October 26, 2016

The government of Saskatchewan has introduced a new law to define the word “privatize”. It says the changes will clarify the meaning of the term when it comes to the province’s Crown corporations. The government has agreed not to sell a Crown — such as SaskTel — without a vote of support from the people of the province. It says the new law would clarify that it could sell up to 49 per cent of a company without “privatizing” it. … The Opposition says it sounds as though the government is looking for ways to sell off crown businesses without holding a public vote. … The government says it is clarifying the definition of “privatize” in light of talks about the future of the government-owned phone company, SaskTel. However it stresses that no offers for that company have been made or are being considered. …

Letter: The other cost of privatizing liquor outlets

Source: Joyce Neufeld, Estavan Mercury, August 17, 2016

The Sask. Party government privatization plans for 40 liquor stores include 36 in rural communities. They generated $32.63M in revenue in 2014. This is a profit that will now go to the private sector and which we, the taxpayers, will have to make up.  What the Wall government does not want made clear are the financial and human costs to our rural communities.  We are told that about 150 employees earning about $6M in total wages, are losing their government jobs. How many will be exercising their seniority and move away from small towns already reeling from the loss of grain elevators, banks, post offices, school and hospital closures? … While most of these communities will, no doubt, lose at least some families, the smaller ones will also end up with abandoned store buildings. There are no guarantees the privateers will use the existing government buildings. Abandoned buildings mean lost property taxes for communities already facing shrinking tax bases. …

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Government booze stores cheaper, safer
Source: Michelle Gawronsky, Winnipeg Free Press, August 10, 2015

Studies of privatization in Alberta have shown privatization has led to higher prices as small businesses are being bought out by large corporations that charge more. Further, there has been a decrease in consumer choice (specialty products that don’t sell in high volumes don’t get shelf space), and an increase in social and policing costs — sales first, safety later. David Campanella and Greg Flanagan’s 2012 study: The economic and social consequences of liquor privatization in Western Canada, takes a closer look at these comparators for British Columbia, Alberta and Saskatchewan. In a price survey of common types and brands of liquor in these jurisdictions, they found B.C.’s private stores consistently averaged the highest price out of all, with private stores in Alberta “close behind.” Publicly owned stores in B.C. had the lowest prices for the items measured, followed by the Saskatchewan Liquor and Gaming Authority. A 2014 Global News study found beer in Alberta’s private stores was significantly more expensive than it was in Manitoba. And a 2014 Beer Store report, Convenience Store Alcohol Would Drive Prices Up, Government Revenue Down, found deregulated alcohol sales in Ontario “would drive up prices, harm communities and lead to hundreds of millions of dollars in lost tax revenue.” What did it say about selection? “There would be no benefit to offset the risks of deregulation. Not on price, or selection.” Ontario’s Beer Stores stock up to 330 brands, while the selection in Alberta is less than half that number.

Alcohol Retailing Deregulation: Implications for Ontario
Source: The Beer Store, February 10, 2014

The issue of alcohol sales in corner stores and gas stations is once again in the news in Ontario. Proponents of deregulated alcohol sales claim that deregulation will lower consumer prices, increase product choice, generate higher government revenues while at the same time improving responsible sales practices. While such claims may sound enticing, a review of the deregulation experiences of other North American jurisdictions shows that this combination of outcomes has never been realized anywhere in practice. In fact, increased availability of alcohol in jurisdictions that have deregulated liquor retailing has been accompanied by significant increases in consumer prices, a general reduction in product selection and lower government alcohol tax revenues. The following paper compares the performance of Ontario’s existing beverage alcohol retail system across a variety of factors to liquor retailing systems that have undergone varying degrees of retail deregulation with a particular focus on Alberta and British Columbia given the robustness of available data on those markets. Factors examined include expected impacts on consumer prices, government revenues, product selection, availability of liquor and responsible sales practices.

Read Full Report Here

Impaired Judgement: The Economic and Social Consequences of Liquor Privatization in Western Canada
Source: David Campanella and David Flanagan, Canadian Centre for Policy Alternatives, 2012

In Alberta and British Columbia, liquor retail privatization has meant higher liquor prices but lower government revenue. Moreover, the increased availability of alcohol brought on by privatization and its lax regulation contravene recognized methods for protecting public health. In light of Premier Brad Wall’s recent decision to move Saskatchewan towards a hybrid private/public model along the lines of British Columbia, these social and economic consequences of liquor privatization must be front and centre in any debate over the future of public liquor delivery in Saskatchewan.

View the Full Report Here.

The Long-Run Effects of Privatization on Productivity: Evidence from Canada

Source: Anthony E. Boardmana, Aidan R. Viningb, David L. Weimerc, Journal of Policy Modeling, May 10, 2016

Abstract:

From a public policy perspective, the social value of privatization depends on the aggregate efficiency benefits over the long term. However, most privatization studies that examine the efficiency impacts of privatization employ relatively short time frames: usually 3-years before and 3-years after the privatization. In contrast, this study examines the long run effects (up to 24 years) of privatization on productivity based on an examination of major, mostly federal, share-issue privatizations in Canada. We control for factors that might affect productivity apart from privatization by including panels of Always-SOE firms and Always-Private firms, and estimating difference-in-difference models. The major finding is that the productivity of privatized SOEs increases relative to SOEs at a decreasing rate, peaking at 14-16 years. Despite this improvement, the productivity of privatized firms continues to lag that of Always-Private firms. We consider some of the policy implications of these findings.

Township of Langley Arenas brought back in-house

Source: Canadian Union of Public Employees, April 13, 2016

UPE 403 is proud to announce that after nearly 20 years two arenas in the Township of Langley will once again be operated in-house. The George Preston Recreation Centre and the Aldergrove Community Arena will both be staffed by CUPE 403 members starting July 1, 2016. … Whyte says that community members with a ‘Go Active’ will now be able to use the pass at both the George Preston Recreation Centre and the Aldergrove Community Arena and that the Township is planning to increase programming at the facilities. Residents will now also be able to pay for municipal services such as taxes, dog licenses, and burning permits at George Preston Recreation Centre. Currently the two arenas are operated by private for profit contractor Canadian Recreation Excellence (Rec Ex). Their contract with the Township expires on June 30 and will not be renewed.