Proposed opposition amendment would see public-sector unions competing with private companies
With a recent step back from his efforts to bring the American-style right-to-work campaign to Canada, Ontario Progressive Conservative (PC) leader Tim Hudak is taking a step forward in a different direction by proposing a sweeping plan that would contract out government services and see public-sector unions competing with private companies.
The PC’s Financial Accountability Act was recently tabled by MPP Doug Holyday. An amendment to the Liberal government’s legislation calling for the creation of a budget watchdog, the PC’s proposal would order the new financial accountability officer to review government services and recommend what to outsource.
"It makes sense for taxpayers," Hudak said of the proposal. "Not only does it then improve the quality of services, but it means we have more money to invest in maybe that new drug to help treat Parkinson’s; to help treat cancer; money that we can actually use to balance the books."
The only problem with this plan — according to Anil Verma, director of the Centre of Industrial Relations and Human Resources at the University of Toronto’s Rotman School of Management — is that privatization is no guarantee of quality or cost.
"It’s not a given that we will necessarily save money when we contract out services," Verma said. "There are instances when it has been efficient and it has saved money and there are cases where it ends up costing even more."
One important factor to consider, he said, is the role of the employee.
"The role of the people who do the job is very important. Some of the fans of privatization do not take into account that you want a dedicated and happy workforce. A model which demoralizes people is not a model you want to follow because, in the end, it costs you more," Verma said.
High employee turnover leading to fewer qualified workers, less efficiency and more lapses in safety as a result of staff dissatisfaction can actually increase costs. Considering a government service only in terms of its immediate cost is a very narrow — and potentially costly — approach, Verma said.
Holyday, however, called the proposal a common-sense approach to cost savings.
"It’s no more than business would do, or anyone spending their own money would do," he said. "You look for the most reasonable, efficient way to provide the service or do the job. Tax dollars are hard to come by and tax dollars are a resource we can’t afford to waste. We’re just asking that this accountability officer take a look at the services that are being provided by the province of Ontario and just see if there’s a better way of doing it."
Labour-intensive services will likely be the focus of the accountability officer, Holyday said. Maintenance, cleaning and food services have been named as suitable possibilities for contracting out.
Warren (Smokey) Thomas — president of the Ontario Public Service Employees Union (OPSEU) — said public services should be for people, not for profit.
"Quality, without fail, goes down," Thomas said of the switch from public to private. He said the focus on profit leads management to cut corners public workers would take pride in maintaining.
In an open letter to Hudak he wrote: "Privatization… puts private wealth ahead of common wealth, special interests ahead of public interest, privilege ahead of democracy. Privatization also represents a loss of public accountability and control."
Thomas fears further privatization will lead to reduced access as well as less transparency and accountability. For example, he said Hudak’s promise of profit is misleading.
"There’s this mistaken notion in the public that once the government privatizes it, taxpayers no longer pay," Thomas said. "That’s not true. Thirty-seven per cent of all government expenditures go to the private sector."
Also misleading, he believes, is Hudak’s promise to step away from right-to-work.
Right-to-work, popular in several American states, mandates workers can join a workplace without having to join its union. Right-to-work is often mentioned alongside a desire to abolish the Rand Formula. The Rand Formula — while it does not require anyone to join a union — requires every worker to pay union dues to prevent so-called "free riders."
Once a passionate supporter of right-to-work, Hudak recently announced he would be backing off the controversial labour reform and putting his focus on bigger fish — including, apparently, the amendment to the Financial Accountability Act.
Thomas called the move one step forward and two steps back, saying, "Tim Hudak’s not giving up on anything. In my opinion, he’s just recalibrating. If he were to win the election, he’d come after the Rand Formula, I have no doubt about it. He’s ideologically opposed to unions."
With tensions still high in the wake of Hudak’s push for right-to-work, Verma proposed a plan that avoids the dichotomy between private and public altogether.
"The government could choose not to subcontract to the private sector but rather create an independent agency," he said.
Like the Toronto Pearson International Airport Authority, an independent agency could be formed, its governance provided by a board representing various stakeholders.
"They are basically non-profit agencies," Verma said. "Some services are very appropriate for this sort of sector and I think that it’s a very viable and very well-validated model that we have already used and used successfully."
