Paradigm Sifts, and Deduction Deconstruction: economic recovery

Showing posts with label economic recovery. Show all posts

Monday, June 9, 2025

The problem with Canada's public-private partnerships

How public-private partnership solutions to the crises facing Canada will result in corporate capture and a loss of Sovereignty

Public-Sector Private-Sector Collusion

1. The Absence of a Viable Strategy

Since 2025, Canada’s national and provincial governments have struggled to formulate effective strategies to address the country’s most pressing crises: economic insecurity due to U.S. tariffs, housing affordability, climate change, and the erosion of public services. While policy documents and expert recommendations call for reducing dependence on the U.S. market, improving productivity, and diversifying trade, these are long-term, aspirational goals rather than actionable plans1 4 13. The immediate response has been reactive—tariffs are met with retaliatory tariffs, and economic shocks are managed with short-term support for affected industries and workers2 3 5. There is little evidence of a coherent, long-term vision capable of fundamentally restructuring Canada’s economy or insulating it from external shocks.

2. The Dominance of Public-Private Partnerships (PPPs) and Corporate Power

In the absence of bold public initiatives, governments have increasingly turned to public-private partnerships as the default solution for infrastructure, housing, and even climate adaptation projects7 8 12. PPPs are presented as a way to leverage private capital, transfer risk, and accelerate project delivery. However, the reality is far more complex and concerning.

a. Corporate Interests at the Forefront
PPPs overwhelmingly favor large corporations—domestic and international—due to their ability to manage complex contracts, absorb risk, and navigate opaque procurement processes7 11 12. This has led to a situation where the solutions proposed and implemented are those that best serve the interests of these corporations: guaranteed returns, risk transfer (often illusory), and long-term control over public assets. Small businesses and community organizations are effectively locked out of these arrangements, reinforcing economic concentration and undermining local innovation11 1228.

b. The Illusion of Risk Transfer and Accountability
Proponents of PPPs argue that they transfer risk from the public to the private sector. However, numerous audits and independent studies have shown that this risk transfer is frequently overstated, and when projects fail or costs escalate, it is the public that ultimately bears the burden11 12. Examples abound: hospital projects in Ontario costing hundreds of millions more than public alternatives, toll roads with exorbitant interest rates, and failed PPPs in water, transit, and education sectors. The private sector’s primary motivation is profit, not public service, and when returns are threatened, companies often renegotiate contracts or walk away, leaving governments to pick up the tab11 12.

c. The Revolving Door and Conflict of Interest
The close ties between political leadership and major corporations further entrench corporate influence. High-profile examples include Mark Carney’s ongoing financial interests in Brookfield Asset Management, a company that stands to benefit from government policies on housing, infrastructure, and energy9. While formal safeguards exist, the revolving door between business and government ensures that corporate perspectives dominate policy discussions. This dynamic is not unique to Canada, but it is particularly pronounced in sectors like energy, where the oil and gas industry has successfully lobbied to shape climate policy and delay meaningful action on emissions629.

3. The Risks of Deference to Corporate Interests

a. Policy Distortion and Neglect of Root Causes
By prioritizing solutions that suit large corporations, governments neglect the root causes of Canada’s crises. In housing, for example, PPPs focus on modular home construction by major developers while ignoring systemic issues like land speculation, renovictions, and the lack of affordable rental stock. In climate policy, the emphasis is on technological fixes like carbon capture and storage (CCUS), which are favored by the oil and gas industry but do little to address the need for rapid emissions reductions629. The result is a policy environment where corporate challenges—risk management, profit maximization, regulatory certainty—are prioritized over public needs.

b. Erosion of Public Control and Accountability
PPPs are negotiated behind closed doors, with contracts kept confidential and limited opportunities for public input or scrutiny12. Once signed, these contracts often lock in private control over public assets for decades, making it difficult for communities to hold anyone accountable when things go wrong. The lack of transparency and accountability undermines public trust and entrenches a system where corporate interests are prioritized over the common good11 12.

c. Economic and Social Consequences
The reliance on PPPs and corporate solutions has significant economic and social costs. Private financing is more expensive than public borrowing, leading to higher project costs and user fees11 12. Essential services like water, transit, and healthcare become less accessible and more expensive, disproportionately affecting vulnerable communities. At the same time, the focus on large-scale, profit-driven projects crowds out smaller, more innovative solutions and reinforces economic inequality11 1228.

4. The Broader Context: Disaster Capitalism and the Capture of Public Policy

The current trajectory of Canadian policy—reactive, corporate-driven, and lacking in long-term vision—reflects the dynamics of disaster capitalism as described by Naomi Klein. Crises are exploited to push through policies that privatize public goods, deregulate industries, and entrench corporate power. The result is a system where public assets and decision-making are increasingly controlled by private interests, while the risks and costs are shifted onto taxpayers and future generations.

5. Conclusion: The Need for a New Approach

Canada’s current approach to its crises is not only inadequate but actively harmful. The reliance on PPPs and deference to corporate interests has led to higher costs, reduced accountability, and the neglect of the root causes of the country’s most pressing problems. To build a more resilient and equitable future, Canada needs to reclaim public control over its economy and policy agenda. This will require:

Rejecting the reflexive use of PPPs and privatization as solutions to every crisis.
Strengthening public institutions and investing in public alternatives for infrastructure, housing, and climate action.
Enhancing transparency and accountability in government contracting and policy-making.
Reducing the influence of corporate lobbyists and closing the revolving door between business and government.
Prioritizing the needs of communities and small businesses over the interests of large corporations.

Only by taking these steps can Canada hope to address its crises in a way that serves the common good, rather than the narrow interests of a powerful few11 1228.

In summary:
Canada’s policy response to its current crises is characterized by a lack of viable, long-term strategies and an overreliance on public-private partnerships that prioritize corporate interests over public needs. This approach has led to higher costs, reduced accountability, and the neglect of the root causes of the country’s most pressing problems. The result is a system where public policy is increasingly shaped by and for large corporations, undermining the common future of all Canadians. A fundamental shift is needed to reclaim public control and ensure that policy solutions serve the broader public interest.

_____________________________________________________________

Thursday, June 11, 2020

COVID 19: Whose bubble will be the first to burst?

"We are all in this together" we are repeatedly told. It is true that the COVID 19 virus doesn't discriminate on the basis of nationality, race, gender, or class. In the early stages it seemed that relatively wealthy business travellers, international tourists, and cruise ship passengers were more likely to be infected than those who lacked the means to travel. Snow Birds, returning from their southern winter homes, tourists and business travellers were the primary carriers responsible for the rapid global spread of the virus. A slow and sometimes reluctant response, further exacerbated by a lack of PPE, undermined efforts by countries to trace, isolate and quarantine all likely carriers in order to prevent community spread of the virus. Healthcare systems were quickly overwhelmed, unable to cope with the large numbers of critically ill COVID 19 patients. Most governments responded with lock-downs, shutting down all but the most essential businesses and confining people to their homes in an effort to curtail the rapid spread of the virus --in an effort to flatten the curve. Economies ground to a halt. Countries with enough credit to do so, Canada included, introduced multi-billion dollar quantitative easing programs to sustain industries, businesses, and newly unemployed individuals during lock-downs.

But, although the virus itself didn't discriminate on the basis of class, the measures to control the spread certainly did! Most countries unable to finance quantitative easing, implemented and enforced lock-downs nonetheless, resulting in a dual crisis --the novel corona virus and a food security crisis for the majority of their citizens no longer able to buy food because they were prevented from going to work during the lock-downs.

Even in wealthier countries it quickly became apparent that the virus was spreading far more quickly among the most vulnerable sectors of the population --the aged, the homeless, those in long-term care facilities, those living in overcrowded substandard housing, foreign workers on farms or in the meat-packing plants. Low-income front-line workers in grocery stores, public transit, healthcare professionals and support staff, personal support workers (often forced to work at two or three part-time jobs in different long-term care facilities and/or private homes to earn a living wage) were all far more exposed and vulnerable than those able to social distance and safely work from home. While the virus itself didn't discriminate on the basis of class, wealthier individuals were certainly far more able to socially distance themselves from the high risks of exposure to which much of the workforce employed in the essential service sector were subjected. Consequently the latter was far more frequently infected.

But while more privileged citizens are better able to limit their exposure to the virus, they are nevertheless not immune to the economic impact of the virus. Much of the economic impact is due to a sharp decrease in global demand for the goods and services produced by formerly lucrative sectors of the economy in the pre-COVID 19 world; sectors like tourism, fossil fuel production, hospitality, air-travel, food services, etc. Even extractive industries, livestock producers, etc. have suddenly found themselves without buyers, while fabricating industries suffered interruptions in overseas supply lines. Governments portray this decline in demand as something temporary, attributing it to the lock-downs. They insist that once lock-downs are lifted, and people are free to resume their former activities, they will once again flock to restaurants, travel to tourist destinations, book flights, burn fossil fuels, etc., and the economy will rebound. Our leaders seem inclined to see their task as building a bridge, an overpass of sorts, that will allow us to transcend this pandemic until it passes and things return to the way they were before, ostensibly complete with all its gross inequities, disregard for vulnerable populations, and climate crisis.

Here in Canada, as elsewhere, governments are now easing lock-downs. Despite low levels of testing, and the relatively recent discovery that screening people based on symptoms may miss 50% or more of contagious asymptomatic carriers, governments are confident that they can shut things down quickly enough to avoid a second wave that would once again overwhelms the healthcare system and further decimate the economy. While many business owners, alarmed by the prospect of losing their investments are eager to reopen, many of their workers are far less confident that the safety measures in place will adequately protect them. They don't want to be the expendable canaries in the coal mine, and may need a lot of persuading. Here in Canada PM Trudeau recently unveiled his plan for such persuasion.

By disqualifying people who prefer getting EI benefits or $2,000/month CERB benefits to returning to their high-risk service-sector minimum-wage jobs, they will be left with no choice but to return to work. People who somehow miraculously manage to pay their rent and buy groceries with a mere $2,000/month may be unwillingly to return to work and unnecessarily expose themselves and their families to higher risks of COVID 19 infections. Especially if their pay-cheques wouldn't amount to much more, or in come cases even less, than what they are receiving under EI or CERB benefits. Such workers must, therefore, be subjected to the same harsh options as poor people living in poor countries --the option of staying at home and watching their families slowly starve to death; or assume the risk of going out to work in the hopes that they won't take home and pass on the virus to family members and loved ones. In most cases it is highly unlikely that any Canadian who can both buy groceries and pay rent with a mere $2,000/month can afford accommodations that allow for much social distancing anyway. It may seem unjust, but in most cases their risk of exposure in the workplace can't be that much worse than futile attempts at social distancing in cramped, often substandard and overcrowded housing --the only standard of housing that a total income of $2,000/month will afford them.

Sure, it may be a misnomer to refer to most service sector jobs as essential. Imported goods and clothes from far away places, hair styling, manicures, restaurant meals and coffees are things most fellow Canadians. even those from the relatively privileged work-from-home crowd, can live without. But those unaccustomed to their newly acquired work-from-home duties, what with doing their own childcare, home-schooling and all, really miss the contributions of the service sector. They don't have time to prepare their own food, and despite everything must still appear competent, presentable and in control during their work-related Zoom calls. In addition to ordering skip-the-dishes take-out food, some may even want to venture out once in a while! After all the slight risk of being exposed to one vetted waitress/waiter/hair-stylist/store clerk or whatever in a well PPE equipped facility is almost negligible when compared to the risks assumed by the service providers themselves who are exposed to dozens of customers every day! A little relaxation of social distancing rules is okay if one is careful not to unnecessarily mingle socially with the service-sector class. A visit to the hair stylist should be a brief sortie, not unlike a fleeting encounter with the native chambermaid who changes your bed sheets in a tropical island resort.

In any case, even those services provided by service sector workers that are more appropriately described as desirable rather than essential, in a country were 70% of the workforce is employed in the service sector, even non-essential service sector jobs are essential to restarting of the economy! Flattening the curve was never about eliminating the risk; it was about reducing the spread to a numbers that our healthcare system can cope with. It just so happens that it is easier to reduce the risk for the work-from-home crowd than for service sector workers. But we are all in this together! The economic futures of both service sector workers and the work-from-home crowd are at stake!

So, since we cannot reduce the level of risk for service sector workers to that of the work-from-home crowd, we must at least put in safety measures to mitigate that risk. Service sector workers reticent to return to work need to be convinced that with new safety measures in place continuing to provide them with EI and CERB benefits can no longer be justified. However, there is one remaining impediment preventing may service sector workers from going back to work: the lack of childcare. For that reason, regardless of risk, daycare services and schools must also be reopened.

It is totally unrealistic to expect children –especially very young children-- to adhere to the rules of social distancing. Children want and need to touch each other or the physical reassurance and/or help from their care-givers and teachers. While the majority of children infected with COVID 19 will not get very sick --some will remain completely asymptomatic, they can and some will nevertheless become carriers and spread the virus to more vulnerable people they come in contact with --their teachers and childcare providers, siblings, parents, grandparents and whoever else is part of their household bubble. And some children will become sick with inflammatory syndrome, usually some time after previously having contracted and developed antibodies to the COVID 19 virus. Screening for and reducing the risk of spread where children are involved is going to be far riskier than other workplaces where only mature adults who fully understand the need for and rules of social distancing are present. Nevertheless too many of our service sector workers cannot return to work if there is no one is looking after their children. Therefore restarting the economy leaves us with no choice but to put both service sector workers and childcare providers in double jeopardy. If the service sector workers themselves don't unknowingly bring the virus into their home, there is still a good chance that their children will have caught the virus from an asymptomatic classmates and bring the virus into the house!

Be that as it may, given that 70% of Canada's workforce is employed in the service sector, they must go back to work. Lending billions of dollars to failing airline and oil industries that in all probability will go into bankruptcy long before they can repay these loans may be an extremely foolhardy investment on economic grounds, but it is nevertheless a wise investment in the political futures of elected representatives. But that does not extend to giving free money to service sector workers minions so they can stay safely at home and sit on their duffs! An economy cannot be restored if people forget their proper place in it! Fortunately the problem of childcare too can similarly be solved by ensuring that daycare providers, school teachers, school bus drivers, etc. will also find themselves without any source of income should they fail to take up their yoke and choose to continue safely social distancing with their own children in their own homes.

Decision-making power was never the purview of the lowly underpaid service sector workers. Much care has been taken to maintain the pecking order --to ensure in the post-COVID 19 economy it continues to be the employers, not the employees, who retain decision-making power. That's why whenever possible, instead of directly providing an income to unemployed workers, governments choose to subsidize employers in exchange for them keeping unemployed workers on the payroll. Similarly, rather than providing individuals and businesses unable to pay their rent with money, governments instead encouraged landlords to apply for subsidies with the expectation that they would pass on their savings to tenants. (Many landlords who had long wanted to get rid of their tenants so they could increase rents turned down the subsidies.) Thus it is the employers, not employees, who will determine whether or not the benefits of reopening up for business outweigh the risks. Once employers feel that they have put enough safeguards in place to keep their employees “reasonably safe" as stipulated by government guidelines, they will be allowed to re-open. Former employees who refuse to return will suddenly find themselves ineligible for EI or CERB benefits, and therefore obliged to return regardless of whether they feel it is safe to do so or not. Workers who think their working environment is unsafe can appeal. If they live long enough for their appeal to be heard, and if they and their legal team manage to convince the province that they were indeed exposed to an unreasonable amount of risk, and if after all that they are still being exposed to unacceptable level of risk, their benefits will be reinstated. Until then they and all those who share their household bubble must accept whatever level of risk their employers deem to be acceptable under the circumstances and in accordance with their interpretation of government guidelines.

"We will get through this" is refrain we often hear from our leadership. And undoubtedly most of us will. But there will be a few bubbles burst before this pandemic is over. Bubbles based on false assumptions that former levels of demand for tourism, air travel, fossil fuels, restaurant food, hotels, office space etc. will be restored; Bubbles based on the assumption that the economy will recover in time to fend off a recession and an unprecedented increase in declarations of bankruptcy; Bubbles based on assumptions that governments and society have learned their lesson and will henceforth place a higher value on the welfare of its most vulnerable citizens, and acknowledge and properly remunerate the contributions and sacrifices of their most essential workers will also deflate, succumbing to pressure from the usual more influential decision-makers in the economy. But these won't be the only bubbles to burst. Nor will they be the first.

The first bubbles to burst will we the protective household social-distancing bubbles that for a short while protected the working poor, primarily employed in the service sector, from disproportionate risk and exposure. Their protective bubbles are about to be deliberately burst by the state in an effort to force them back to work. This group includes racial minorities, foreign workers, personal care providers, and indigenous peoples. They and their children and households, much like Greta Thunberg and her generation, will be sacrificed on the alter built to that old but omnipotent and increasingly demanding God --the God of economic growth.

It will be thus. We are all in this storm together, but we're not all in the same boat. Some of us are treading water, clutching to a plank like a refugee in the Mediterranean. Others are social-distancing in their mansions complete with swimming pools and gymnasiums.

Unless we seize this opportunity to build a new, just, sustainable and inclusive economy on the rubble left by this global pandemic; an economy that values the lives, safety, health and rights of workers no matter what their nationality or where they live on this planet; an economy rooted in the abundance provided by a healthy, appreciated, respected and well cared for planet; an economy that prioritizes our collective and universal well-being and seeks to promote our collective opportunity to thrive. An economy that rejects and has completely abandoned the unsustainable annihilating environmentally destructive perpetual pursuit of economic growth .