Privatizing not the answer
Published On Fri Mar 05 2010. By Christopher Hume, Urban Issues, Architecture
If privatization were the answer, there would be no need for government in the first place.
Even as Canada and the rest of the developed world pick up the very costly pieces of a global economic system that came within hours of collapse, we here in Toronto remain touchingly faithful to the gospel of the marketplace. We are true believers, expecting – and seeing – miracles at every turn.
Mayoral candidates George Smitherman and Rocco Rossi, both conservatives in Liberal clothing, have emerged as the self-proclaimed prophets of privatization. They would consider selling civic assets – Toronto Hydro, Toronto Parking Authority, Enwave – as if there were so many high-priced indulgences whose purchase would guarantee the city a place in fiscal eternity.
Perhaps that’s true, but if so it is only because the private sector would be willing to do what the Rossis, Smithermans and fellow politicos are afraid to do – force people to pay the real cost of services they take for granted.
In that respect, privatization might indeed be good for Toronto, or at least, its bottom line. But it’s likely residents would feel otherwise. Various services might well be improved, but at what cost?
The most obvious example is Highway 407, which former premier Mike Harris sold in 1999. Ever since, it seems the consortium that owns the expressway has been the subject of endless public anger. If it isn’t incorrect billing, it’s toll increases. The province now says that even if the 407 had been sold for what it was worth, it should have remained in public ownership. According to Queen’s Park, the experiment was a mistake.
On the other hand, in introducing road tolls, the consortium did what many argue had to be done. Even in the GTA, they are inevitable. Still, no one in elected office wants to have anything to do with them. That’s understandable, but not helpful.
In the U.K., where British Rail was privatized several decades ago, riders tend to talk more about the high price of fares than service improvements. In Chicago, where the parking authority was privatized some years ago, along with other city services, the cost of parking has quadrupled.
Like road tolls, higher parking rates are also inevitable. But don’t tell anyone around here, where parking counts as a constitutional right.
And those who insist that municipal spending is out of control should remember that provincial spending has increased even faster, 27 versus 31 per cent respectively between 2003 and 2008.
Let’s not forget, either, that governments borrow money at lower rates than private corporations. That doesn’t mean international consortiums, big pension funds and investors wouldn’t love to acquire Toronto’s assets. Right around the world, they’re holding their breath for Rossi.
It’s natural to want something for nothing, of course, but not to expect it. The notion that privatization is some kind of magic wand that can be waved to remove all economic woes is as absurd as it sounds. But, critics would counter, the TTC, for example, isn’t up to the task; its management and union may be eager for expansion, but not innovation. Under their control, the system has grown bigger, not better.
Throughout the debate we should remember that in Toronto, and in every other town across Ontario, all roads lead to Queen’s Park. The province is the real source of this city’s impoverishment, not unions or municipal politicians. As long as Torontonians are forced to pay Ontario’s debts, they won’t be able to cover their own.
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