Categorized | Canadian Politics

Public money ‘shouldn’t pad profits’: Ontario NDP signals shift away from private-sector delivery of services

Posted on 06 June 2018 by admin

The NDP has drawn attention for its pledge to buy back the privatized half of Hydro One, but that’s just one way the party aims to diminish private business in the public sector

TORONTO — The word profit appears often in the Ontario NDP’s election platform, and not in a nice way.

From daycare to home care, nursing homes to winter road maintenance, the party promises to devote government funding solely to not-for-profit providers of public services, signalling a sweeping shift in how government programs are delivered.

The NDP has drawn much attention for its pledge to buy back the privatized half of Hydro One, but that’s just one way the party aims to diminish the role of private business in the public sector.

With less than a week until the June 7 election, polls indicate it is in a tight race for government with the Progressive Conservatives.

As well as largely barring profit-making companies from offering taxpayer-funded services, the NDP is vowing to end the private-public P3 projects often used to build hospitals and other infrastructure, and launch the biggest expansion “ever seen” of non-profit community health centres, an alternative to private doctor’s offices.

Public child care dollars should go to not-for-profit and public providers,” says a typical statement, explaining how New Democrats would spend billions in new daycare funding. “Funds shouldn’t pad the profits of private companies.” The party and its union allies say the shift is justified by research suggesting non-profit organizations usually offer better-quality services than firms driven by the bottom line.

But business groups and at least one academic expert said Thursday that’s not always the case, and that governments should be open to all possibilities.

“What is currently in the platform appears to be very ideological,” said Steve Hobbs of the Canadian Council on Public-Private Partnerships. “What would be worrisome … is to rule out an option that has a proven record of success without even looking at the evidence.”

One of the NDP’s most generous pledges is to add 220,000 new daycare spots, at an estimated $3.8-billion cost by 2022. All would be not-for-profit and public, the platform says, though private centres now run about a quarter of government-licensed day-care spaces in Ontario.

A major expansion in long-term-care beds would similarly be focused on non-profit and municipal homes, “where funding goes to patient care instead of profit,” the platform says. And a promised $300-million boost to home care would flow “directly to better care instead of higher profits.”

There is some evidence to support such a thrust.

A 2009 University of British Columbia review concluded non-profit nursing homes deliver better care, while a 2015 University of Ottawa study found residents of for-profit homes were more likely to end up in hospital or die within a year than those in non-profit ones.

But it’s not always so clear-cut.

The NDP platform says it would end P3s, where governments pay contractors to finance and build a project. It claims the auditor general found P3s had cost taxpayers billions more than if the government had borrowed the money and overseen the building itself. But the watchdog actually concluded those higher construction price tags can be more than offset by the lower long-term financial risk that P3s offer taxpayers.

The New Democrats also say they would bring winter road maintenance “back to the public sector,” again citing an auditor’s report. But that 2015 report said reduced maintenance quality was the result of a change that had lessened oversight of contractors and mandated accepting the lowest bid. In fact, outsourcing roadwork started in the 1980s and had worked well before the new system, the auditor suggested.

Dionne Pohler, a professor with the University of Toronto Centre for Industrial Relations and Human Resources, said It’s wrong and unproductive for parties to insist one type of organization has a monopoly on efficiency or quality.

 “Any kind of statement like that is just not backed up by the evidence in all cases,” she said. “Profit can sometimes get in the way of achieving the public or social good, but it doesn’t necessarily have to.”

Fred Hahn, Ontario president of the Canadian Union of Public Employees, argued the academic data does unequivocally show social and health services are best provided by not-for-profits. There is a principle at stake, too, he added.

“Should we make profit on our grandparents in the final years of their lives, should we make profit on our children, because they’re in child care?” asked Hahn. “Should someone actually be making profit on these kinds of services, (on) something as foundational as our hydro system?”

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