Tag Archives: Canada

Lessons from laundry privatization: Why freedom of information matters in the era of privatization

Source: Tria Donaldson and Cheryl Stadnichuk, rabble.ca, July 27, 2015

Everywhere privatization has occurred, public access to the facts and figures around privatization has been a challenge. Here in Saskatchewan, that challenge can been illustrated by the difficulty of getting information about the privatization of hospital laundry. The cloak of secrecy was delt a major blow last week when the Saskatchewan Information and Privacy Commissioner recommended the disclosure of a 10-year contract for laundry services between K-Bro Linen Systems and 3sHealth. The Commissioner also recommended that the publicly-funded 3sHealth be brought under legislation as a health care organization and subsequently freedom of information laws….The decision to privatize hospital laundry services is a major restructuring of our health-care system. It means the loss of about 350 jobs in six communities and the loss of publicly-provided and local laundry services. University of Winnipeg economist, Hugh Grant, estimated a net loss in provincial income between $14 and $42 million over the next 10 years from laundry privatization….Public access to documents through freedom of information legislation is critical to accountability and transparency.

But privatization presents hurdles to public knowledge. In this case, 3sHealth and K-Bro Linen refused to publicly disclose the 10-year contract claiming the information was a “trade secret” and that its disclosure would cause economic harm…..The Ministry responded that “[t]he Ministry has performed a search for this record and has determined that this record does not exist within the Ministry of Health.” Four of the health regions responded that “no record exists.”

It is shocking that health regions who will have to monitor K-Bro’s laundry services and pay the bills did not have a copy of the contract.


New Privacy Commissioner report a victory for transparency; CUPE calls for changes in FOI legislation in response
Source: Canadian Union of Public Employees, July 24, 2015

Attempts by 3sHealth to prevent public disclosure and transparency on the privatization of hospital laundry services have been dealt with a major blow by the Saskatchewan Information and Privacy Commissioner in a new report that calls for public disclosure of a fully unredacted contract with K-Bro Linen. “CUPE has been trying to get a public copy of the contract with K-Bro Linen since it was signed in December 2013,” said Cheryl Stadnichuk, CUPE Researcher. “Both 3sHealth and K-Bro went to great lengths to prevent disclosure of this contract.” After unsuccessful attempts to get a copy of the 10-year K-Bro contract from the Ministry of Health, who claimed it did not have a copy, CUPE filed access to information requests to five health regions. All health regions, except for Sunrise Health Region, replied that they did not have the record. Sunrise offered a costing model template and requested a copy of the contract from 3sHealth, who denied the request. A heavily censored copy of the contract was provided to CUPE by 3sHealth only after a formal review had commenced. The review culminated in today’s report, which recommends full disclosure of both documents. “When dealing with our government, or one of its agencies, an unfortunate pattern seems to have developed,” said Tom Graham, President of CUPE Saskatchewan. “Requests for information are simply denied or the information that is released is heavily censored. It is time for us to seriously consider making changes to freedom of information legislation to ensure openness and transparency in government.” CUPE is calling for 3sHealth to be included under freedom of information legislation – a move in line with the report’s recommendation that 3sHealth be made a “health care organization” under the Regional Health Services Act. “3sHealth plays a major role in the provision and restructuring of health care services,” added Graham. “3sHealth is funded by public dollars but is not covered by LAFOIP and is not subject to the same public scrutiny as other publicly-funded health organizations. This must change.” “This report is a victory for democratic accountability and transparency,” said Stadnichuk. “Saskatchewan people deserve the opportunity to view all contracts for privatizing services to monitor the full costs.” “Disclosure is especially important in this case, since we’re dealing with a ten-year contract in an industry notorious for cost overruns,” added Stadnichuk. Public statements in B.C. show that payments to two laundry corporations that hold the monopoly on service to health authorities in the Lower Mainland increased by a staggering 170 per cent over a seven-year period. Critics of the agreement with K-Bro in Saskatchewan have raised concerns about possible cost overruns because of unrealistic cost valuations.

Read the full report (082-2015) here.

Short-Term Gain, Long-Term Pain: The Privatization of Hospital Laundry Services in Saskatchewan
Source: Hugh Grant, Manish Pandey, James Townsend, Canadian Centre for Policy Alternatives, December 2014

From the abstract:
The government’s plan to privatize hospital laundry services will have a negative impact on Saskatchewan’s local economies. The decision to close five regional laundries and centralize laundry services through Alberta-based K-Bro Linen will decrease the income of the residents of Saskatchewan between $14 and $42 million over the next 10 years in comparison to public options. The laundry plant closure in Prince Albert alone will result in 74 jobs lost, cause a decline in labour income of $2.5 million in the region, and a decline in regional GDP of $3.7 million. Privatization will also redistribute income away from workers and other residents of the province in favour of a private corporation whose major shareholders reside outside of the province. That is the conclusion of a new report by University of Winnipeg economists Hugh Grant, Manish Pandey and James Townsend. “Short-Term Gain, Long-Term Pain: The Privatization of Hospital Laundry Services in Saskatchewan” concludes that while privatization may garner limited, short-term savings, the long-term costs borne by Saskatchewan residents will be significantly higher.

More Headaches than it’s Worth: Assessing Privatized and Semi-Privatized Waste Collection

Source: David Campanella, Canadian Centre for Policy Alternatives, June 2015

A review of international econometrics studies on the pros and cons of privatization and semi-privatization waste collection suggests full privatization can cause more headaches than it’s worth. The review of decades’ worth of studies concludes there is no empirical evidence to support the claim that privatizing waste collection services is more cost efficient. The academic literature points to two key factors that end up being costly for governments who fully privatize waste collection: lack of competition in the waste collection sector and large, often unaccounted for administrative costs required to deal with private firms.

This study reviews econometrics studies of privatization and semi-privatization of solid waste collection in the U.S., the UK, the Netherlands, Spain, Sweden, Ireland, and in Canada. The conclusion of decades of empirical research is that there is no clear connection between private waste collection and cost reduction. When all the relevant factors are included, it appears that privatization is often more of a headache than it’s worth. What’s the number one reason U.S. city managers cite for reversing a decision to privatize services? Insufficient cost savings. In solid waste collection, studies reveal that any initial cost savings tend to diminish over time, and that cost savings have become increasingly less likely.

There are two main reasons why private waste collection fails to reduce municipal costs:
1. A widespread lack of competition; and
2. Large and often unaccounted for administrative costs from dealing with private firms.


Following Failure: Saskatchewan government seems doomed to repeat the P3 mistakes of other provinces

Source: Simon Enoch, Cheryl Stadnichuk, Canadian Centre for Policy Alternatives, Saskatchewan Notes, June 2015

From the abstract:
As the Saskatchewan government embarks on a major public-private-partnership (P3) school build, it regularly assures the public that it has learned from the P3 mistakes of other jurisdictions. Despite these assurances, the recent Saskatchewan Auditor-General report and the hiring of Partnerships BC as a P3 advisor to the government demonstrates that rather than learning from the P3 mistakes of the past, the government seems poised to repeat them. Simon Enoch and Cheryl Stadnichuk identify the various ways the government’s P3 process continues to harbour the same biases and faulty assumptions of other failed P3 projects across the country.

Vote for the Privatization Scam of the Year award

Source: National Union of Public and General Employees Ottawa, June 15, 2015

Almost all privatization deals are bad news for the public. The profit motive leads to higher costs, reduced services, and a whole lot of sleaze. Privatization Scam of the Year Awards shows link between privatization and sleaze The Privatization Scam of the Year Awards draw attention to the profiteering, lower standards and outright corruption that come with privatization. …

…The nominees for the 2014 “Scammie” are:
• Ontario’s P3 privatizations schemes that added $8 billion to the cost of public infrastructure
• British Columbia’s replacement of home care professionals with unpaid volunteers
• New Brunswick’s secret negotiations to privatize food and cleaning services in hospitals
• Replacing public employees with consultants in Saskatchewan — at double the cost
• Interpol called in to help with investigation of Montreal hospital P3 privatization scheme corruption

Union barbecues warn residents of health care privatization

Source: Matt Gardner, Daily Herald, August 20, 2014

On Wednesday, members of CUPE Local 4777 — which represents area health-care workers — held their final barbecue in front of City Hall, serving up burgers while educating residents on the spectre of looming privatization. Over the course of a dozen area barbecues so far this summer, public interest in the issue has steadily grown, according to CUPE Local 4777 president Helen Sawatsky. …. CUPE has identified numerous threats from privatization. Aside from the threat to members’ livelihoods, union officials argue that contracting out health care services to private firms would cost taxpayers more money while lowering the quality of health care.

Public risks, private profits

Source: Canadian Union Of Public Employees (CUPE) and the Polaris Institute, 2014

….The Public risks, private profits series shines a spotlight on water and wastewater services corporations who may bid on Canadian P3s. The profiles provide overviews of corporate structures and governance, lobby activity, past and present P3 contracts, and background on legal troubles or controversies.

The companies being profiled are diverse, ranging from international corporations to smaller Canadian-based financers and contractors. All have been identified by federal P3 promotion agency PPP Canada as likely bidders on Canadian water and wastewater P3s.

The Public risks, private profits series is an important tool for communities challenging P3s. Pressure to privatize is mounting, with federal crown corporation PPP Canada targeting municipal water systems, and the Conservative government’s Building Canada Fund forcing all infrastructure projects worth $100 million or more to be screened for P3 suitability.

The first profile exposed the controversial track record of SNC-Lavalin Group Inc. Future profiles will include Bilfinger Berger, Black & Veatch, CH2M Hill, Epcor and Suez. All are corporations identified in a PPP Canada-commissioned study on Canada’s water and wastewater systems…..

Profiles include:
Corporate profile: Black & Veatch eyes Canadian water P3s
Corporate profile: Veolia P3s put public water at risk
Corporate profile: Bilfinger Berger avoids taxes on its P3s
Corporate profile: Public interest at risk for SNC-Lavalin’s profits

OPSEU calls on leaders to debate privatization

Source: Christina Blizzard, Toronto Sun, May 15, 2014

The head of one of the province’s largest public sector unions is calling for an all-party debate so party leaders can set out their plans for privatization of public services. In a letter to Liberal leader Kathleen Wynne, PC leader Tim Hudak, New Democratic leader Andrea Horwath and Green Party leader Mike Schreiner, Warren “Smokey” Thomas, the head of the Ontario Public Service Employees’ Union that represents 130,000 public sector workers, said it’s time for all leaders to come clean on their plans for contracting out public services.

Public Works: Sucking Garbage

Source: Peter Goffin, Torontoist, Public Works, March 25, 2014

A vacuum-powered waste management system would cut costs and be good for the environment. Is it right for Toronto?

The year 2014 is shaping up to be the year Toronto talks garbage. Mayor Rob Ford and Coucillor (and Public Works and Infrastructure Committee Chairman) Denzil Minnan-Wong (Ward 34, Don Valley East) have each called for reports on fully privatizing Toronto waste collection, which Ford has already pegged as an election issue. The City’s waste management budget for this year is nearly $350 million, which is roughly the same as in 2013, and slightly more than in 2012, but carries with it a three-per-cent hike in residential garbage collection fees. Before we get too down on Toronto, though, remember that garbage is a problem for many big cities. In fact, more and more of those cities are looking at new means of collecting and transporting waste. Sanitation experts in New York City, for instance, are taking a good long look at Envac, a Swedish company that installs and operates vacuum-powered waste collection and management systems.

Anything to do with suction tube travel sounds distinctly futuristic, but Envac has been doing its vacuum waste collection thing since the 1960s, when pneumatic tubes were an exciting and beloved means of transporting inanimate objects (or so we’ve been led to understand). Today, Envac has its vacuum systems installed in a residential development on Roosevelt Island, New York; a catering company at Pearson Airport; Montreal’s “Quartier Des Spectacles”; Disney World; and dozens more public, commercial, and residential areas around the world…..

Government reviewing privatization of winter road maintenance

Source: James Armstrong, Global News (Canada), March 25, 2014

The Ontario government is reconsidering the privatization of winter road maintenance in the province after a report from Global News raised questions about road safety. A poll released exclusively to Global News Monday suggested more Ontarians than not feel road quality in the province is getting worse. … Right now the province hires contractors to plow and salt the roads. The province doesn’t tell them how many trucks to use or how many employees they should have but judges their work on whether or not the roads are cleared and the plows are running…. Gélinas suggested fines aren’t enough and some contractors are willing to take the fine rather than do the work….