|Home | About Us | Contact Us | Advertising | www.fsu.ca|
|Tuesday, May 21st, 2013|
> Monday, January 30th, 2012 > Opinion > Buried in the red: And you thought you had bills
Buried in the red: And you thought you had bills
Victor De Jong
Click here to read more Interrobang articles written by Victor De Jong
Published: Monday, January 30th, 2012
The Canadian deficit is something that comes up frequently around budget season in politics. Dalton McGuinty had a press conference last Tuesday, partially to lay out why it's so important to eliminate the deficit by 2017. Throughout the budget cuts there has been a common theme: the privatization of formerly government-run services. After analyzing the results of the Commission on the Reform of Ontario's Public Services lead by Economist Don Drummond, the Ontario government said that other than that the only services that would not be considered for cuts are healthcare and education. The statement also said that no alternative would be considered if it were to result in an increase in taxes. The inherent problem I've seen is that once an industry becomes based on profits and the interests of shareholders, the customers ultimately lose. Take garbage collection for example. If it were to be privatized, the city resources related to garbage collection would be repurposed or sold. In the event that the quality of service offered by the private company began to suffer over time, there would be no alternative as the city would have dismantled their own operation.
If the government is running a deficit by providing a service, it must either be made profitable by hiring people who know how to compete in the market, or the government must accept that the service is provided at a loss and cannot be profitable. Selling off industries that can only be made profitable by lowering the quality of delivery will result in providers who sacrifice service for profit margins.
If the government continues along the path of privatization, a problem will arise in the very near future. There will be a tipping point at which all services capable of making a profit will be privatized and all services which operate at a loss will belong to the taxpayers. Our tax dollars have been invested in public services, like garbage collection, since 1914 in London, and the resources amassed by the city in that time have an enormous value. Speculation on rumours that Ottawa might be planning to put shares of VIA Rail up for sale have run rampant after government officials denied intending to sell, despite documentation indicating otherwise. It's no secret that the rail company runs a deficit every single year, but their inability to become profitable has led to recommendations of privatization and public sector partnerships in the Windsor-Quebec region.
A private company won't take on a business in which there's no opportunity for profit, so these recommendations seem to implicitly state that there is money to be made through VIA Rail. The hiring of consultants such as Drummond, who earns $1,500 per day, raises a question in my mind: Why can't individuals with proven expertise be hired to reorganize government sectors that are failing?
There are undoubtedly scenarios in which privatization has worked and the quality of service has improved at no extra cost, however a mass movement towards privatization will weaken our entire country's profitability and job market.