Why are we revisiting P3s in Nova Scotia?

February 27, 2008

Perhaps the only thing that is clear from the newest attempt to enter into more P3 partnerships in this province is that public policy decisions are made despite the lack of evidence to support them. The evidence against this kind of privatization is overwhelmingly negative - the Canadian Centre for Policy Alternatives has published numerous reports examining experiences in British Columbia, Nova Scotia and Britain.

For communities, these projects have resulted in less access to spaces that can be used for recreational activities, for example. This seems to go against the government's own health promotion message.

For health care, they have meant higher user fees and longer waiting lists in the public system.

This seems to go against the government's attempts to address access issues.

These P3 projects raise concerns about public accountability. In the last round of "partnership building," the schools' lease details were not disclosed for reasons of "proprietary corporate information (Shaker, 2003)." Past experience tells us that the "devil was in the details." In the meantime, the government is locked into a contract for 25 to 30 years that allows for no flexibility to respond to community needs.

The government's motivations for spending the money to look into P3 projects have not been made clear. We are continually being told that the government has to pay down the debt and continue to balance the budget. However, in his examination of P3s, economics professor John Loxley (2003) has concluded that "governments end up actually paying more for these leases than if they borrowed the money directly themselves." This was confirmed by our own provincial auditor.

The only motivation seems to be the money being offered by the Harper government for such P3 projects. Is this federal bribe sufficient reason for this kind of public policy decision?

We should also be asking why the government has waited this long to deal with our aging infrastructure and is now faced with an overwhelming number of projects that need to be addressed all at once. The age of our infrastructure should not be a surprise, but here we are at nothing less than a crisis point. Statistics Canada recently released a report showing that Nova Scotia has the oldest infrastructure in the country. Renovations are sometimes more cost-effective than new construction, and spreading out the costs over many years also would have made more sense.

It is hard not to be cynical and suggest that waiting for a crisis is the best way to convince Nova Scotians that the government has no choice and there is only one way to solve the problem.

As the government embarks on the road to investigating the costs and benefits of these partnerships, it must ensure that its decision is based on all the information, which is then provided to the electorate. The citizens of this province deserve all the complicated details, including evidence of the higher costs and lower benefits if the public sector was to build and operate the infrastructure instead. Previously, these costs were exaggerated by the private companies that were asked to submit this information.

P3 "partnerships" are presented as if the private sector is acting altruistically to help our government improve its infrastructure. The only way that the private sector can be involved is if there is profit to be made. P3s have not been proven to be in the public interest. They have, however, been rather profitable for private companies choosing to hire cheaper labour and cut costs and corners without being held publicly accountable.

Christine Saulnier , PhD, is director, Canadian Centre for Policy Alternatives-Nova Scotia. A slightly edited version of this editorial originally appeared in The Chronicle-Herald - Halifax.

Shaker, E. (2003, Spring). The devil in the details: The P3 experience in Nova Scotia. Our Schools Our Selves, Canadian Centre for Policy Alternatives.

Shaffer, M. (2006, Sept, 12). The Real Cost of the Sea-to-Sky P3-A Critical Review of Partnerships BC’s Value for Money Assessment. Vancouver: CCPA-BC.

Loxley, J. (2003, April). The Economics of P3s and Public Services: The Big Picture. In Assessing the record of public private partnerships: Proceedings of CCPA-BC Forum. Ed. Sylvia Fuller. Vancouver: CCPA-BC: pp.5-7.