Thursday, June 29, 2006

P3 or Private, Profiteering, Propaganda

I’ve been studying various documents for quite some time in order to blog about P3’s. I’ve read documents on schools, hospitals, utilities, and roads and in each and every instance there has been more cost to the taxpayer, erosion of service, job loss, wages rolled back, and loss of public control and government accountability.

The statistics and reports are quite astounding. Take this one for instance:

Between October 2003 and July 2004, housekeeping services in all 32 hospitals in the Lower Mainland

and southern Vancouver Island were privatized (see Table 1). Many of the same hospitals and some LTC

facilities also contracted out their dietary, security, and laundry services during this period. (Not all regional

health authorities or health care employers in BC chose the privatization route: the Interior and Northern

health authorities did not privatize support services; the northern end of Vancouver Island was also left

in-house.) By March 2004, approximately 6,500 housekeeping, food, laundry, and security workers affiliated

with the HEU and the BC Government and Service Employees’ Union had lost their jobs; another 2,000

were gone by July 2004.

This wholesale dismantling of in-house health support services has no Canadian parallel. The closest

match is Alberta, where two of Calgary’s four hospitals privatized their housekeeping services; however,

Calgary chose to introduce changes over an extended period. In BC the rate and pace of change were

stunning: 8,500 health care support jobs vanished from the public sector in under a year.


Not surprisingly, these blatantly involuntary partnership agreements between

Local 1-3567 and the companies had a number of negative features. The

agreements run for six years, unlike the typical labour contract of two to

three years’ duration. The 2003 Aramark/IWA Local 1-3567 agreement for

health care started a housekeeping aide at $9.50/hr, rising to $11.21/hr after six years.5 The median wage

for housekeeping aides across the three IWA Local 1-3567 agreements with Aramark, Compass, and Sodexho

was $10.25/hr.6 In comparison, the wage for the same job under the HEU’s Health Support Subsector

collective agreement was $18.32/hr – 79 per cent higher than the privatized rate.

Contracting out effectively wiped out more than 30 years of pay-equity gains for British Columbian

women in health housekeeping jobs.7 Further, the province went from being a national leader in pay

rates for health support services to being the lowest in the country, significantly lower than the Canadian

average. In 2003, a privatized cleaner in a BC hospital was earning 26 per cent less than the national

average union wage for the job.8 This decline in income is especially punishing in light of the high cost

of living in Vancouver, where housing costs are steeper than anywhere else in the country.9


Despite these absences, the majority of our participants said they were reluctant to take time off for health

problems. Just under half of our participants said they would call in sick only if they were incapable of

working. Some reported to work despite poor health. One housekeeper worked with the flu because her

contractor was very short of staff; another ignored an injured knee and, after three months, was in considerable


Their reasons suggest a corporate strategy of discouraging paid sick time by pitting the worker’s physical

well-being against their economic survival. Many workers said their employer had a strict requirement

to provide a physician’s note if they called in sick, even for one day. The deterrent is obvious: getting

an appointment on short notice is not easy, some physicians charge money for notes, and sick people

often don’t feel like getting out of bed to see a doctor. A lead-hand housekeeper spoke proudly about challenging the company’s policy of requiring a note after one day’s illness. As a result, a note is necessary only after an absence of two days or longer.

Workers were aware that repeated absences could be grounds for dismissal.

“Nobody wants to call in sick because they’re afraid,” said a cleaner and

former in-house worker. “Now if you’re sick two times and go home, that’s it. You’re fired.”

From a patient perspective it is just as scary. 10% of patients leaving British PFI hospitals are malnourished, cleaning staff have been cut back to the point that hospital infections are running rampant and leading to preventable deaths.

Schools built in the P3 style are at the mercy of corporations. They want to make money above all else. This has resulted in school activities being cancelled and/or costing significantly more as gym rentals cost so much more. Most parents are concerned about good nutrition for their children and that their kids not be subjected to advertisements while in school. Unfortunately parents have little or no say. The P3 owners make contracts and the schools must accept them. Many schools are finding that construction was badly done and school boards are on the hook for repairs. In at least one instance children were not allowed to hang artwork or play on the grass, as this would depreciate company property.

The 407 Highway in Ontario is a P3. Leased for 99 years to a private consortium the government has little or no say about tolls, safety or any of the other problems associated with the highway.

On June 9th 2006 highway 401 was tied up for four hours:

…..when a private clean-up crew demanded payment up front before it would clean up a diesel spill. "Whenever we are doing anything on the highway, we have to be sure we're going to get paid," Bob Chabot, owner of Centennial Sweepers, told the media. "We can no longer afford to subsidize the province of Ontario."

Because of situations like this the government is reconsidering these contracts right? Wrong! In fact:

Earlier this year, former Transportation Minister Harinder Takhar announced pilot projects for so-called 'Area Term Contracts' (ATCs) for provincial highways. Unlike the current Area Maintenance Contracts, which generally last five years and cover only basic road upkeep, ATCs will last up to 20 years and cover not only maintenance but also all road reconstruction and rehabilitation.

"Under the government’s plan, giant corporate entities will have total control over every aspect of our highways – except paying for them," says O’Brien. "That will be left to taxpayers. We’ll have to pay a pretty penny, because there is no way a company can risk signing a 20-year contract without making sure its expenses and its profits are secured by a fat cushion of our tax dollars."

The appeal of P3 for governments is that it allows them to hide debt and have the public believe they are keeping to budget however, it will end up costing the taxpayer much more over the long run, gives us less control over public areas and in Feb. Standard & Poor's:

lowered the authority's credit rating (down to 'AA+' from 'AAA') because of the Greater Vancouver Regional District (GVRD)'s increasing debt: a projected $5.5 billion by 2009.The downgrading is directly linked to expensive P3s such as the rapid transit line from the airport to downtown Vancouver (RAV) line) and the Golden Ears bridge. P3 projects result in much higher costs and less accountability for taxpayers."Early in the planning process, regional politicians were told P3s would hide debt, but accounting rules don't allow this," CUPE BC president Barry O'Neill said. "Now that debt is on the books for projects that are as much as 25 per cent over budget projections."

P3 stands for Public, Private, Partnership. Private, Profiteering, Propaganda is far more apt a name.

I encourage everyone to read as much about this subject as you can and to write to the appropriate level of government every time you hear of a P3 situation. The money you save may be your own.


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10:45 p.m.  
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2:04 a.m.  

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