New report advises looking at alternatives to costly
The BC Liberal government insists Public-Private Partnerships in
operating public services save taxpayers money in borrowing costs, but
a new report suggest this is not the case, as the cost of for-profit
operations may be taking its toll.
A new report released October 21 entitled Financing Canada's Hospitals:
Public Alternatives to P3s argues that P3s are an expensive way to
finance public infrastructure.
The author, economist Hugh Mackenzie, makes several recommendations in
the report, including the creation of a stable capital investment
program funded by all levels of government that would amortize the cost
of public projects over the life of each asset.
"P3 deals are inherently risky," says John Irwin, a researcher at the
Canadian Centre for Policy Alternatives. "Private partners must
pay higher borrowing rates than governments. If and when these
companies run into financial trouble, governments end up bailing out
projects to the tune of millions of dollars because communities cannot
go without hospitals."
"The BC government is steamrolling ahead with P3 contracts for the
Abbotsford Hospital and the VGH Ambulatory Care Facility even though,
countless studies show that P3s lead to added costs, less transparency,
poorer quality of service, and even longer waits for patients," says
Alice Edge, co-chair of the BC Health Coalition. "Not only that,
but this government continues to contract out more and more surgeries
to private clinics instead of using public facilities that are already
built and sitting idle."
BC Health Coalition Coordinator Lesley Moore says senior levels of
government are neglecting their responsibilities, turning to P3
financing to take costs of the books. "One way or another we're
still paying for it, the question is whether we want to pay more and
get less," says Moore.