Let’s stop the quiet sell-off of Saskatchewan
There are some things the Saskatchewan government is trying to keep from you and me. Only a select few ever hear about it.
Very quietly, the government is trying to sell off our public services… from post-secondary facilities to for-profit surgeries to highway maintenance.
Take a closer look at some examples…
Chipping away at Crown CorpsBit by bit, some of our most valuable services – from power generation to made-in-Saskatchewan broadcasting – are being turned into sources of profit for private companies.
The Saskatchewan government is slowly weakening one of our most valued Crown corporations: SaskPower. Instead of keeping power generation under public ownership, the government is buying more and more electricity from private businesses – and in at least one case, is guaranteeing their profits at public expense.
Since taking office in 2007, the Saskatchewan Party government has signed contracts with four new private generating stations. Two of those projects came online in 2011: the Red Lily Wind Farm, owned by a BC-based real estate firm; and the gas-powered Spy Hill Generating Station, owned by Ontario-based Northland Power. In 2012, a deal was signed with Ontario’s Algonquin Power and Utilities Corp. to build the largest wind farm in Saskatchewan.
In 2013, Saskatchewan’s largest private power plant, the North Battleford Generating Station – also owned by Northland Power – came online. It now supplies SaskPower with 260 megawatts of power, under a purchasing agreement that “is designed to ensure predictable, stable and sustainable cash flows over the entire 20-year term,” according to a Northland press release.
While the rates that SaskPower pays Northland remain secret, the contract does ensure that increases in fuel costs are passed along to SaskPower – making Saskatchewan people pay to guarantee Northland’s profits.
About 20% of Saskatchewan’s electricity now comes from private suppliers like Northland. There’s no reason to keep handing lucrative contracts like these to profit-driven corporations. SaskPower is more than capable of building and running its own generating stations – while making sure Saskatchewan people benefit from the revenues.
INFORMATION SERVICES CORPORATION
Information Services Corporation – which handles Saskatchewan’s land, property, and corporate registries – was a reliable source of income for the province. In the five years leading up to 2013, ISC earned the public purse $83 million.
But in 2013, the government sold off 60% of ISC’s shares, turning the profitable Crown into a private business. While the sale was a win for the new shareholders, the public lost out on millions in annual revenue.
Between corporate taxes and the earnings on government-owned shares, Saskatchewan’s public purse netted just over $10 million from ISC in 2014. Compare that to 2012 – ISC’s last year of operation as a Crown, with similar profits to 2014 – when it paid a dividend of $19.1 million to the province.
SASKATCHEWAN COMMUNICATIONS NETWORK (SCN)
In 2010, the province’s public broadcaster, the Saskatchewan Communication Network, was abruptly sold off for a fraction of its value.
Since 1990, SCN had produced and delivered educational and locally-focused content to Saskatchewan viewers. It also supported the provincial film and television industry, by investing heavily in local productions and encouraging viewers to create content for broadcasting.
That was lost in June 2010, when Bluepoint Media bought SCN for just $350,000. Bluepoint waited only two years before re-selling SCN to Rogers Communications for $3 million – almost nine times what the province had earned from the sale.
In the process, the rules that had required SCN’s owner to focus on local content were weakened. This allowed Rogers to turn the channel into the American content-dominated CityTV, erasing a unique source of Saskatchewan-specific programming.
Whether it’s stripping away our provincial identity by selling off SCN, or letting out-of-province corporations pocket the revenues from power generation and registry services, privatizing Crowns never works out in favour of Saskatchewan people.
Privatizing highways a dangerous businessIf we go down the road of highway privatization, we could end up jeopardizing the safety of the travelling public and paying more to private for-profit companies.
Work that has for years been performed by Ministry of Highways staff is increasingly being handed over to private contractors – from equipment repair and road maintenance to engineering services.
PROMISED SAVINGS NEVER APPEAR
Other provinces have fully privatized their road maintenance work, promising lower costs and greater efficiency. But in Alberta, B.C., and Ontario, the story was always the same: years after privatization, auditors and researchers still couldn’t find evidence that any money had been saved. In fact, auditors in BC and Ontario found costs increased immediately after privatization.
ENGINEERING COSTS SKYROCKET
Roadbuilding projects in Saskatchewan used to be designed and overseen by engineering staff from the Ministry of Highways. Now, the work is being given to private consulting firms – and the costs are piling up. Payments to consultants rose over 400% between 2009 and 2014, and engineering costs have nearly tripled at the project level.
WORK IS LATE — WITH NO PENALTIES
A CBC investigation found that between 2005 and 2013, an average 30% of Saskatchewan highways contracts were late. In 2012-13, the share of late contracts hit a high of 46%. But penalties for contractors who finished behind schedule were almost nonexistent, amounting to just 0.3% of the value of contracts awarded from 2005-2013.
In a separate study of 271 highways contracts, 98% didn’t specify a per-day penalty for late work – and 16% didn’t even specify a completion date for the work assigned.
WINTER DRIVING GETS MORE DANGEROUS
After public outcry over the dangerously poor performance of contractors responsible for plowing and sanding Ontario highways, that province’s auditor general investigated. Her 2015 report found that private contractors responded slower and used less equipment than needed, putting the safety of drivers and emergency services personnel at risk.
UNSAFE VEHICLES AND EQUIPMENT ARE USED
A freedom of information request by a Kamloops journalist revealed that many of the vehicles and equipment that private contractors had on the road in BC presented a danger to the public.
Some of the private equipment had faulty brakes, tires ready to blow out, and unsafe loads, which put families at risk on the province’s highways. A total of 427 safety violations were recorded by inspectors between 2007 and 2008. Many of the safety infractions were so serious that the trucks and trailers were immediately ordered off the road.
ACCOUNTABILITY IS LOST
When public services are handed over to private companies, the public loses its right to know how money is being spent. Highways contractors and consultants have no responsibility to make the financial details of their contracts public – in fact, that information is often protected under privacy laws.
JOBS ARE LOST
Privatization means job losses for public service workers. In B.C., the number of highways workers dropped from 2,600 to 1,580 following privatization.
Let’s keep highways where they belong – in public hands.
Public information in private handsPrivatizing the provincial government’s information technology (IT) services benefits private business, but it’s a losing proposition for Saskatchewan.
The government has already contracted out more than 60 per cent of its IT services to more than 90 different private, for-profit companies.
The money flowing to private IT consultants just keeps increasing. Between 2009 and 2014, the Ministry of Central Services – which runs the province’s Information Technology Office – increased its spending on consultants by 168%, reaching $22 million in 2013-14. That spending is concentrated on IT consultants. But at the same time, Central Services is cutting its own IT staff – the Information Technology Office’s payroll fell by almost a third from 2009-2014.
PRIVATIZING COSTS MORE
Private IT consultants don’t work cheap: in one contract obtained by SGEU, they billed between $100 and $175 per hour. When the government uses in-house IT staff, its only cost is employee wages and benefits – but consulting firms expect to turn a significant profit on top of their employees’ compensation, and they charge accordingly. The result is that the public pays more for the same work.
ACCOUNTABILITY IS LOST
When consultants replace public employees, the public loses its right to know who’s doing the work and what it’s costing. Private IT consultants work according to contracts whose details aren’t publicly available.
And while the government should be carefully monitoring and evaluating its own consultants, when the Provincial Auditor investigated Central Services, she found just the opposite. Her report found that the ministry almost never did a final evaluation of a consultant’s work, and couldn’t show that consultants were more cost-effective than internal staff. In fact, in 70% of contracts, it couldn’t explain why a consultant was needed at all.
GOVERNMENT BECOMES DEPENDENT ON CONSULTANTS
When a government IT worker completes a project or learns a skill, their abilities and expertise stay in the public service. When a consultant finishes an assignment, they leave, taking important skills and knowledge with them. As the public IT workforce shrinks, the government has no choice but to re-hire the same consultants again and again – at whatever price they ask. As the Public Accounts of Saskatchewan show, this is already happening to the Information Technology Office.
And contrary to what the government likes to say, IT consultants are not being used only for highly specialized, short-term projects. As of December 2014, Central Services had 249 active IT contracts. Almost half covered terms of approximately three years or more. Some were much longer – such as two seven-year contracts with ISM.
No modern organization can function without skilled and dependable IT support, and the Saskatchewan government is no exception. But that doesn’t mean we have to be dependent on expensive, unaccountable private consulting firms. It’s in our best interests as a province to keep IT capacity within the public sector.
Big Corrections contract!On August 5, 2015, government privatized food services in Saskatchewan correctional facilities — kitchens were turned over to U.K.-owned multinational Compass Group, whose record, in Canada and around the world, is full of corruption and incompetence.
Promised savings are questionable
More than 60 experienced workers were thrown out of their jobs. And in the months following the privatization, the quality of the food served up by Compass was so poor it lead to inmate hunger strikes.
A dismal track record
B.C. and Alberta., which contracted their correctional kitchens out to Compass years ago, paid a lot more to feed each inmate than Saskatchewan’s public system did. Their costs were 41 per cent and 59 per cent higher, respectively, in 2012-13.
Compass moves in
Compass is the world’s biggest food services company. It provides food services, and support services like cleaning, around the world. Its performance is often dangerously poor. Compass had revenues of about $35 billion in 2014.
On top of job losses and lower wages for workers, privatization has meant costs that weren’t present under the public model. Taxpayers are on the hook for the expense of hiring consultants to review the food services model; the costs of conducting the request for proposals and negotiating the contract with Compass; and the ongoing costs of monitoring Compass to ensure compliance. It’s doubtful these expenses are accounted for in the numbers provided to the public.
And, despite the promise of guaranteed pricing, there are several built-in ways for Compass to increase what it charges for its services. If inmate populations fall by 15 per cent or more, the province is required to negotiate a price increase to ensure Compass doesn’t lose revenue. Similarly, if Compass finds itself out of pocket because food costs rise, or it experiences “product inefficiencies” or “labour inefficiencies,” or enough inmate labour isn’t made available, it’s entitled to change its costs accordingly. The reality of privatization is clear: the company’s profits come first.
A way out
The one bit of good news to be found in the contract with Compass is this: there’s a quick way out. At any time, government can give one year’s notice that it’s cancelling the contract and taking back correctional food services.
SGEU has called on government to publicly release a detailed breakdown of the full costs of privatization – and if it can’t justify privatization once the real numbers are known, to immediately give notice that it’s cancelling the contract. We know that a profit-driven, private model can’t compete with an in-house food services system that was cost-effective, supported good jobs, and prioritized the safety of staff and inmates.
Opening door to for-profit careSafeguarding and expanding our public health care system should be one of our province’s top priorities. Yet the government is eroding that system by opening the door to privatization.
PUBLIC MONEY SIPHONED OFF TO PRIVATE CLINICS
Surgeries that should be provided within the public health care system are now being performed in private, for-profit clinics.
In 2011, the contract for providing private surgeries in Regina and Saskatoon was handed to a Calgary-based company, Surgical Centres Inc., which runs private clinics in Alberta and B.C. More health care services were privatized in 2014, when the Regina Qu’Appelle Health Region began contracting out 5500 MRI scans per year to Alberta-based Mayfair Diagnostics.
The government is re-directing funds that should be used to build capacity in our province’s hospitals, letting that money instead go to the investors of profit-seeking, out-of-province corporations.
LESS MONEY FOR PUBLIC HEALTH SERVICES
Diverting government funds to private clinics means less for publicly-delivered services. A new health centre in Regina, the Plains Surgery and Outpatient Care Centre, was announced in June 2012. But after years of delay, the health minister said in May 2015 that the project will only go ahead if the private sector decides to take it on.
QUICK TREATMENT BECOMES A PRIVILEGE FOR THE WEALTHY
In November 2015, the government passed legislation to allow those who can afford it to skip the public waiting list by paying for private MRI scans – meaning they get fast-tracked for diagnosis and treatment. This privatization is supposed to reduce wait times. But in heavily-privatized Alberta, wait times for an MRI are nearly three times longer than in Saskatchewan, according to the Canadian Institute for Health Information.
STAFF SHORTAGES WORSEN
Spreading Saskatchewan’s limited human resources across two systems – public and private – does not solve staffing problems. In fact, it will make staff shortages in the public health system worse. We need to maximize recruitment and retention in our public hospitals and health care facilities.
PRIVATE CLINICS COST MORE
When our tax dollars are used to pay for medical procedures in private clinics, we’re picking up the additional costs of running a parallel, private system. We are paying for privately-owned facilities, equipment, supplies, and, of course, a profit for investors. Without a significant profit margin, private investors would not be interested in operating these clinics.
CRUCIAL SUPPORT SERVICES ARE WEAKENED
Safe and effective health care depends on effective, reliable support services – but those services are facing privatization as well. In May 2013, it was announced that Saskatchewan’s five publicly-run hospital laundries will be closed. A 10-year contract to replace them was given to a Calgary-based company, K-Bro Linens.
To maximize profits, K-Bro plans to pay poverty-level wages and keep staffing levels to a minimum — not a recipe for high-quality work. K-Bro’s Calgary plant already processes hospital linens for the Saskatoon Health Region, and workers there have reported far too much “clean” laundry coming back damp, soiled, and stained.
To make matters worse, any savings that the K-bro contract provides aren’t likely to last. In B.C.’s Lower Mainland, where K-bro and another company provide laundry services, the costs of hospital laundry contracts have risen 170% since 2007. Once the public laundry system is dismantled, Saskatchewan will have little choice but to pay what K-Bro asks.
The health care system is there to make sure we’re all taken care of, not to generate corporate profits. Instead of weakening it through privatization, Saskatchewan should be investing in a stronger public health system.
Government giving up guaranteed profitsPublic liquor stores generate hundreds of millions of dollars in public profits each year… now at risk — forever — because of government privatization.
KEEPING OUR PUBLIC SERVICES STRONG
Revenue generated by public liquor sales goes back to the government to help fund valuable services like schools, hospitals and roads. Liquor sales contributed over $1.3 billion to the public purse from 2010 to 2015.
If liquor sales are privatized, a huge portion of that revenue will be lost. Saskatchewan stands to lose $115 million in revenue, over just the next five years, if government’s privatization plan is implemented.
That’s not counting the 2013 decision to let four private stores open in Regina and Saskatoon, instead of building public ones – which will cost the province up to $7.5 million in lost revenue each year.
PROTECTING SMALL-TOWN ECONOMIES
Public liquor stores provide stable, well-paying jobs in 60 communities throughout Saskatchewan – often in places where good jobs are hard to come by. If they’re shut down, small-town economies and small-town people across the province will lose out.
KEEPING OUR KIDS AND COMMUNITIES SAFE
Organizations committed to public health and safety agree: publicly-run liquor sales are the best way to reduce the social harms that come from excessive and irresponsible alcohol consumption. This is the position taken by the World Health Organization, the U.S. Centers for Disease Control, Mothers Against Drunk Driving Canada, and the Centre for Addiction and Mental Health, among others.
Help us fight back against the privatization of liquor sales. Find out what you can do by visiting our public liquor action page.
Public parks used for private profitsProvincial parks are part of our natural heritage, and should be affordable for all. But government is putting parts of our parks up for sale.
More and more, new developments and parks services are being turned into money-makers for private business.
- In 2008, a private developer was given a 25-year lease on land in Cypress Hills Interprovincial Park, to open a new 75-site RV park.
- In 2010, 23 cabins at Greenwater Lake Provincial Park – the last publicly-run cabins in the parks system – were sold off to a Regina-based property management company.
- In 2012, a private company was contracted to provide an online booking system for campers. The new system has been plagued by serious failings, including frequent crashes, hours-long delays, and overcharged users.
- In 2013, a B.C.-based company was hired to build and operate a new marina in Blackstrap Provincial Park.
- Also in 2013, a private security company was hired to provide law enforcement services in Saskatchewan Landing Provincial Park.
EXPERIENCE PARK EMPLOYEES LOSE OUT
Services like cutting firewood, maintaining hiking trails and cleaning visitors’ centres were once provided by parks staff. Now public parks employees are working shorter terms each season, and many of those services are being turned over to private contractors.
THE PUBLIC PAYS
Through slow but steady privatization, our parks are being treated as business opportunities rather than public assets. Revenues from services, which should go back into keeping our parks affordable and well-maintained, are instead pocketed by private businesses. That leaves the public to make up the difference through increased fees. A seasonal campsite with electricity, for instance, has more than doubled in cost since 2008, from $830 to $1,975.
Saskatchewan’s provincial park system shouldn’t be handed over to private businesses. Our parks belong to us all, for all of us to enjoy, and they should be kept in public hands.
Private inspections pose risk to familiesLicensing and inspections belong in public, not private, hands. But the government has increasingly turned the job over to private, industry-influenced groups.
Inspecting and licencing mechanical equipment and livestock dealers, and testing milk for safety, are all now the responsibility of private organizations.
In 2010, Saskatchewan’s Provincial Milk Laboratory was shut down. Following its closure, the industry-run marketing board SaskMilk was given responsibility for safety testing of milk.
Also in 2010, safety inspections for boilers, elevators, and amusement park rides were transferred from the Ministry of Corrections, Public Safety and Policing to the new Technical Safety Authority of Saskatchewan (TSASK). TSASK is governed by a board of directors with a strong industry presence. And since it took over, the number of companies licenced to inspect their own boilers and pressurized storage tanks have more than doubled, to 21%.
Most recently, in 2014, responsibility for livestock brand inspection and the licencing of dealers was moved from the Ministry of Agriculture to a newly-created private group, Livestock Services of Saskatchewan Corp (LSS). LSS describes itself as being “owned and operated by the five main livestock producer groups requiring inspection services.”
LOWER STANDARDS AND LESS ACCOUNTABILITY
The government has a responsibility to ensure public safety and proper industry oversight, and is accountable to the public for its actions. Industry groups exist to champion their industries, and are responsible to their members, not to the people of Saskatchewan.
Especially when public safety is the issue, citizens have a right to expect high standards of accountability. Industry self-regulation too often means lower standards, inadequate reporting, limited monitoring and reduced compliance.
It’s not the job of industries to inspect and licence themselves. That’s a job that the Saskatchewan government should perform – instead of turning authority over to private groups.