Public-Private Partnerships to be imposed on Nova Scotians? Shunpiking Online Vo.6 No.3

HALIFAX (1 February 2009) - THE Government of Nova Scotia is stepping up its anti-social offensive against workers and the general public through its proposal to implement several so-called "public-private partnerships" (P3's) in the province as part of Harper's infrastructure "stimulus" program. By giving private monopolies a role in funding and operating public projects and facilities, the Nova Scotia government plans to oversee a crucial step in a calculated process of handing public assets over to private interests. In the present instance, these public assets include the Victoria General Hospital in Halifax, several government and court buildings, and new residences to be constructed at the Nova Scotia Agricultural College. In the future, they will include roads and public facilities such as rinks and other sports and recreation complexes, the management of sand and gravel pits, and the appropriation of natural resources.

In February 2008, the Nova Scotia Government signed a memorandum of understanding with Partnerships B.C., the crown corporation responsible for spearheading a variety of P3 projects in British Colombia. It was to receive $200,000 of the wealth produced by Nova Scotia workers for the purpose of "reviewing" the feasibility of the proposed P3 initiatives. Predictably, the government conducted no consultation on this issue with the public. In fact, Partnerships B.C. received a list of the proposed P3 initiatives from the MacDonald government well before the list was even released to the public in late March.

Such action clearly illustrates the contempt with which the MacDonald government views the concept of public assets. Moreover, the fact that the ruling Tories once opposed and campaigned against the disastrous P3 scam of their Liberal predecessors (which involved the operation of schools in the Halifax area by the Armoyan real estate monopoly, a Liberal Party contributor, helping it to force up real estate market values) serves to reveal a rank hypocrisy, if not double standards.

Nova Scotia's Minister of Transportation and Industrial Renewal, Murray Scott, has attempted to reassure a sceptical public by claiming that the current "review" of the P3 initiatives does not mean that the initiatives will go forward. "My first priority is to ensure that Nova Scotia taxpayers are protected and that we get good value for the dollar," he said at the time. "We'll decide what's good for Nova Scotia or not."

Indeed they will. But Nova Scotians, unfortunately, will not. No one but the monopolies will have their say. That is the anti-social content that the Harper and MacDoanld governments give to the concept of "partnership." There is no alternative, and the role of government is simply to do everything possible to ensure monopolies in Nova Scotia come out as winners in the global economy and hope that this translates into a favourable outcome for Nova Scotian society and roll with the punches. The concrete reality was shown once again this winter by the disaster on the Cobequid toll highway, a P3 operated by an American financial monopoly, where hundreds upon hundreds of cars were simply left stranded. No one called out the snow plows.

Not only were Nova Scotians not consulted about the P3 scam, or about the drawing up of the list of proposed P3's sent to Partnerships B.C., but the latter agency itself is known in its home province as a zealous mouthpiece for P3 scams, which renders Minister Scott's hollow reassurances very hard to swallow. "[I]n practice", says B.C. investigative journalist Murray Dobbin, "PBC is a promoter."

Meanwhile, Nova Scotia Health Minister Mark d'Entrement was masquerading the province's P3 proposals as matter of frugal economics. Referring to the work set to be done on the Victoria General Hospital, d'Entremont said "I don't have the cash flow to build a $500- million to $750-million building. So if we can find a partner in it and it can alleviate that kind of cash crunch, then it's worth looking at."

But what is the real nature of this "cash crunch"? As Dobbin points out, "there is little difference between taxpayers servicing the interest on a government loan and paying a yearly fee to a P3 contractor-who uses it to pay off its loan. It's all taxpayers' dollars." However, he adds, P3's do constitute a clever accounting trick by allowing governments to count P3-related expenses as operating costs rather than debt. This may attract predatory investors, but does nothing to change the practice of forcibly extracting tribute from the working masses, either to banks (via loans to government) or directly to monopolies (via P3's). The "cash crunch" is, like always, to be "solved" on the backs of workers (and is itself a symptom of the destruction of our industries and productive capacity, all of which is overseen by the very people who go on to use the resulting loss of wealth for their own polemical ends).

Nova Scotia NDP Leader Darrel Dexter responded critically to the government's P3 proposal, and especially to the involvement of Partnerships B.C. "That's (Partnerships B.C.) not there to protect the financial interests of the people of Nova Scotia", he cautioned. However, Dexter did not rule out possible support for the P3 model, asserting that "[a]n independent cost-benefit analysis would have to be done by an independent office like the auditor general."

Is Mr Dexter merely suggesting that the right to decide the fate of public assets be transferred from one unelected body to another? Dexter says nothing of the inviolability of public assets and the right of the public to decide how and by whom they are used.

Financing for P3 models is disintegrating

Similarly, the Halifax Chronicle Herald has more recently editorialized "caution" in proceeding on the P3 model. Today finance capital is pulling away from the P3 model, as available capital has evaporated in the crisis or is more sorely needed to shore up other investments in danger of collapse.

Examples of P3s under stress in Vancouver include the Fortress Investment Group $685 million financing of the False Creek Olympic Village and the $2.3 billion twinning of the Port Mann Bridge financed by the Macquarie Group of Australia, which includes four European banks that are deeply embroiled in the economic crisis: BNP Paribas, Caja Madrid, Royal Bank of Scotland, and Société Générale.

P3s are one of the causes of the current economic crisis. They finance and manage many urban projects, which were crucial factors in forcing up real estate market values that are now in crisis and sinking. To stop any further market price decline of landed-property, save existing projects and finance other "shovel-ready" ones, the rich are demanding a different regime such as government deficit financing, which until recently was taboo because investment returns were far greater in P3s and other schemes.

In the face of the crisis, the desperation of the big investors is so great that in the case of the Olympic Village, the BC Liberal Party in power along with the NDP Party in opposition held a special weekend session of the Legislature just to amend the Vancouver City Charter allowing it to assume directly a $500 million or more Olympic Village funding debt, which the P3 investor no longer can handle. The residents of Vancouver, who according to the city charter have the right to a referendum vote on such a large borrowing, with the diktat from the Legislature will have no say in the matter.

Meanwhile, a stampede to government deficit financing is occurring across the country with every major monopoly and level of government demanding public money be used for bailouts and "shovel-ready" projects. Infrastructure projects, which are said to be mainly for job creation and urban renewal, are connected with private landed-property and the construction and machine-building and construction supply monopolies. Public debt from government deficit financing has become once again a safe haven for big capital as it goes through a rough period of consolidation, concentration and preparations for new big scores.

A pro-social program would strengthen not weaken public enterprise

In the face of such tactics from all of the provincial political cartels, with rhetoric both right and left-wing, the working people and general public of Nova Scotia are being shown once again that their right to control their own assets is being blocked on all sides by proponents of an antiquated and anti-democratic parliamentary and economic system that is hopelessly incapable of addressing their needs. This reality serves to re-emphasise the pressing imperative that sovereignty be vested in the people, and that the security of the people from poisonous scams like the P3 proposal on the one hand or the false "stimulus" through deficit financing on the other lies in their fight for a pro-social program.

Public enterprise should be strengthened with a not-for-profit-no-interest public banking, credit and insurance system, public enterprise in the main branches of the economy such as steel, forestry, raw material extraction, transportation and ports, heavy machinery and vehicle production, and by consolidating and expanding all existing public enterprise such as the Post Office and urban transit systems. A growing dominance of public enterprise with a consciously planned social division of work within the country and all its regions will defend the economy from the recurring crises of private enterprise and interference from the U.S. Empire.