Public Private Partnerships Innovation or Profiteering?

Public Private Partnerships

Innovation or Profiteering?

History of Infrastructure Development

1800-mid 1900s religious, philanthropic, charitable institutions

1948 – National Health Grants Program 1971 – Wind up of National Funding,

Provinces and Municipalities take responsibility

1990s – Tax Cuts Agenda, Delayed Infrastructure Programs, Growth of P3s

Fiscal Imbalance

Decline in federal transfers Downloading of responsibility

for infrastructure

P3s – What Are They?

Public Private Partnerships, also called PFI – Private Finance Initiative, AFMs – Alternative Finance Mechanisms, AFPs – Alternative Finance and Procurement

While generically described as “partnerships” the legal relationship embodied in PPP may be a partnership, joint venture, corporation, lease, management arrangement, trust or other structure

All definitions include judgements on the benefits or damage caused by these schemes

Proponents – P3s harness innovation and transfer risk Ontario Health Coalition – P3s are simply another term for privatization British Medical Association – PFI is “Perfidious Financial Idiocy”

Models of PPP

Privatization BOO – Build Own

Operate (Ontario Long Term Care facilities since 1997)

BOT – Build Operate Transfer

DBFO – Design Build Finance Operate (Brampton & Ottawa P3 hospitals and new P3 hospitals)

Concession Lease Corporatization BTO – Build Transfer

Operate Lease

Ontario Health P3s/Privatization

P3 Hospitals – DBFO P3s, DBF P3s Long Term Care Facilities built under Conservative

Government 1998-2003 – BOO Private Homecare Contracts brought in under

Conservative Government 1997 MRI/CT clinics IT contracts, leasing and concession arrangements, etc.

The Claims

Harness new investment

Not privatization Transfer risk Come in under

budget and within timelines

Innovate Find efficiencies Public control

maintained Separation of

strategic control from operation

The Problems

Higher cost Cuts to services –

shrinking scope of public medicare

Inflexible contracts Loss of democratic

control Legal

wrangling/management breakdown

Commercialization of public service

Shoddy construction/maintenance and safety problems

Inequality Creation of new risks Deepening privatization

P3s in Operation

P3s in Operation

P3s in Operation

P3s in Operation

Public Alternatives to P3s

Can We Jump Into P3s and Get Back Out Again?

NAFTA Cost Duration

Resources

www.policyalternatives.ca “Funding Hospital Infrastructure: Why P3s Don’t

Work, and What Will” by Lewis Auerbach, Arthur Donner, Douglas D. Peters, Monica Townson, and Armine Yalnizyan

www.ontariohealthcoalition.ca Click on Public Private Partnerships

www.P3watch.ca