Wrong Track: a Decade of Privatization in Saskatchewan 2004 – 2015 by the Saskatchewan Office – Canadian Centre for Policy Alternatives October 2015
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The Wrong Track A Decade of Privatization in Saskatchewan, 2004-2015 By the Saskatchewan Office – Canadian Centre for Policy Alternatives Saskatchewan Office 2138 McIntyre Street, 2nd Floor Regina, SK S4P 2R7 The Wrong Track, October 2015 CCPAwww.policyalternatives.ca – Saskatchewan Office • 1 The Wrong Track: A Decade of Privatization in Saskatchewan 2004 – 2015 By the Saskatchewan Office – Canadian Centre for Policy Alternatives October 2015 This publication is available under limited copyright protection. You may download, distribute, photocopy, cite or excerpt this document provided it is properly and fully credited and not used for commercial purposes. The permission of the CCPA is required for all other uses. The primary research for this report was compiled and coordinated by Dr. Simon Enoch, Director of the Saskatchewan Office of the Canadian Centre for Policy Alternatives. The opinions and recommendations in this report, and any errors, are those of the author alone. Special thanks to Peter Prebble, Patricia Elliott and Cheryl Stadnichuk for their contributions to this publication. Printed copies: $10.00. Download free from the CCPA website. ISBN 978-1-77125-234-8 Please make a donation ... Help us continue to offer our publications free online. We make most of our publications available free on our website. Making a donation or taking out a member ship will help us continue to provide people with access to our ideas and research free of charge. You can make a donation or become a member on-line at www. policyalternatives.ca. Or you can contact the Saskatchewan Office for more information at 2138 McIntyre Street, 2nd Floor, Regina, SK S4P 2R7; phone 306-924-3372. 2 • CCPA – Saskatchewan Office The Wrong Track, October 2015 Contents Introduction ................................................................. 4 Crowns and the Economy ....................................................... 7 Social and Environmental Role ................................................... 9 Vignette: The Gradual Shift to Private Electricity Generation in Saskatchewan ............... 10 Public Services ............................................................... 12 The Privatization Threat ........................................................ 13 Vignette: Selling the Saskatchewan Communications Network (SCN) ..................... 23 The Privatization Strategy ....................................................... 25 Vignette: The Privatization of Hospital Laundry in Saskatchewan ......................... 27 The Privatization Backlash: In-sourcing and Remunicipalization ........................... 29 The Record of Privatization: Promises Unfulfilled. 30 Vignette: Saskatchewan’s Transparency and Accountability Problem ....................... 32 Concluding Thoughts .......................................................... 34 Bibliography ................................................................. 35 Endnotes ................................................................... 37 The Wrong Track, October 2015 CCPA – Saskatchewan Office • 3 Introduction There is little doubt that public enterprises like Crown corporations enjoy a unique pride of place within the politics of Saskatchewan. As a province that has historically been prone to the vagaries of external forces such as international com- mo dity markets, fluctuating resource prices and shifts in federal trade policies, publically-owned enterprises allowed a measure of control and direction over our economic future. Indeed, as Dunn and Laycock observe, it is this sense of vulnerability to outside forces, often beyond our control, that has led to “political demands for a strong provincial government capable of effectively pro- tecting and promoting the welfare of the provincial popu lation” (cited in Wesley, 2011, 21). Certainly, Crown corporations and other public enterprises and services have been indica- tive of this sensibility through out Saskatchewan history. Early advertisement for Saskatchewan Government Insurance (SGI) 4 • CCPA – Saskatchewan Office The Wrong Track, October 2015 The importance of Crown corporations to Saskatchewan Party leader Brad Wall as a “wolf Saskatch ewan is perhaps best demonstrated by in sheep’s clothing,” possessed of a hidden priva- the level of public attachment to them. Opinion tization agenda, while the Saskatchewan Party polls consistently show strong support for the leader stated unequivocally, “Crowns are not provin cial Crowns, with levels of public support going to be privatized and (subsidiaries) are not for them reliably hovering near the 60 percent going to be wound down” (Mandryk, 2007b, mark (Mandryk, 2001, A15). Indeed, the most B10; Hall, 2007, A8). As a result of privatization recent 2012 Saskatchewan Election Study found being the defining issue of the previous two that 58.7 percent of respondents strongly provincial elections, University of Saskatchewan opposed or somewhat opposed privatization of political scientist David McGrane argued that the existing Crowns. Even among self-identified “things like privatization of Crown corporations Saskatchewan Party members, 47.2 percent and private healthcare delivery” may become strongly or somewhat opposed privatization of “the third rail of Saskatchewan politics” — issues the existing provincial Crowns (Atkinson, et al, essentially too volatile to handle (Mandryk, 2012). Similarly, like the majority of Canadians, 2007c, A1). Saskatchewan residents also demonstrate There is little doubt, given the political baggage considerable attachment to the public services that privatization carries, that politicians in they receive — particularly public healthcare and Saskatchewan exercise extra caution when public education. raising the issue. As Leader-Post columnist Given the historic and consistent level of public Murray Mandryk colourfully puts it, “Welcome support for Crown enterprises and public services, to Saskatch ewan where, if you are talking privati- it is not surprising that the issue of privatization zation, you best check out all the exits” (2014, evokes such strong reactions across the political A10). But has privatization become a figurative spectrum and regularly takes centre stage in ‘third rail’ — too hazardous to even touch? political campaigns. As our political history has This study argues that despite all of the political amply demonstrated, in Saskatchewan electoral recriminations and admonitions that have been fortunes can be made or unmade on the issue of expended on the issue of privatization in the past privatization alone. decade, Saskatchewan has actually witnessed Recent history provides an illustrative example. It an acceleration of the privatization of public is widely acknowledged that the Saskatchewan assets and services over the last ten years. In Party’s failure to win the tight 2003 provincial what follows, we offer a detailed chronological election hinged on the Party’s reluctance to history of what Law Professor Graham Hodge has com pletely rule out privatization of the Crowns referred to as “the privatization policy family” in during the campaign (McGrane 2008; Rayner the province from 2004 to 2015 (2006, 3).1 We and Beaudry‐Mellor 2009). Premier Brad Wall catalogue privatizations in all of its various forms, himself admits this, conceding, “the biggest from the outright sale of Crown corporations and mistake the Saskatchewan Party has made in its the sale of Crown subsidiaries to public-private ten years,” was “not being clear enough on its partnerships (P3s) and the contracting out of stance on Crown corporations and not respecting public services to the private sector.2 It is perhaps the citizens’ strong desire to keep them public” somewhat disconcerting that even in the face (Wall cited in Mandryk 2007a, A16). of marked public opposition coupled with a highly charged political environment where Privatization would again loom large during any proposed privatization should be subject to the 2007 election. The NDP attempted to paint The Wrong Track, October 2015 CCPA – Saskatchewan Office • 5 immediate and thorough scrutiny that privati- to tell whether Mr. Wall has indeed abandoned zations have continued apace. How can we his “under the radar,” incremental privatization account for this apparent contradiction? approach. What we do know, is that even in light of Mr. Wall’s caution, the Saskatchewan What becomes evident from the following government has amassed a substantial record chronology is that the majority of privatization of privatization since its election in 2007. In initiatives undertaken over the past decade what follows we will offer a chronology of priva- have targeted what could be characterized as tization initiatives in Saskatchewan over the past more second-tier, less familiar public enterprises decade. In addition, we will situate the role of and services. Big-ticket public assets such as Crown corporations and public services within the four major Crowns or public services like the Canadian political economy and investigate healthcare delivery continue to be owned and the strategies and tactics used to privatize delivered — for the most part — by the public them. Throughout the report, we include a few sector. It is on the margins however, underneath selected “vignettes” of recent Saskatchewan and “below the radar,” where privatization privati zations and their immediate consequences has been most acute. Certainly, Premier Brad by invited authors. Peter Prebble, Director of Wall’s recent foray into the possibility of