Why Public Matters

What is privatization?

Privatization means giving private corporations control of public services (like transit or medical testing) and public assets (like hospitals and water treatment plants). The selloff of Hydro One is just one example of how the Ontario government is privatizing a growing number of public services. What does privatization mean for Ontario residents? It means higher costs and worse service. Public services and assets, like highways, hospital labs, and hydro are being sold off to generate profits for private corporations instead of serving our communities.

There’s a better option: the public option. A growing number of people in communities across Ontario agree.

Why is public better?

Public services save money. Private contractors need to make a profit, so what they charge for products and services is always more than their actual cost. Publicly delivered services, by contrast, are typically non-profit (or if a profit is made, it’s put back into services). Because they aren’t profit-driven, public services can cost less. The City of Hamilton, for instance, saved more than $5.5 million after it took its water treatment service out of the hands of private contractors and brought it back in-house.

Public services are better quality. Because they’re focused on profit, private contractors often sacrifice quality of service in order to cut costs. They may also cut features and services that cut into profits. In a U.S.-based survey of local governments that have chosen to end private service-delivery contracts and bring public services back in house, 61 per cent said inadequate quality of service was the reason.

Public services are more accountable. Ontario’s Auditor General recently reported that private contractors charged the public more than $8 billion too much by renegotiating contracts, mismanaging budgets and hiking fees.  Failure to meet obligations, corruption and bid-rigging are just some of the problems that governments say they experience when they hand services over to private contractors.

Public services are safer. Unlike private service, publicly delivered services don’t cut costs at the expense of public safety. In Penetanguishene, Ont., for instance, a privately run jail has been returned to public control after a government review found a comparable public jail built at the same time had better security and prisoners were less likely to commit crimes after serving their sentences.

Public services ensure fairness. Public services should be equally accessible to all Ontarians. But when private companies operate public services, they often maintain services and service areas that are profitable, while cutting those that don’t make money – creating a two-tiered system. Private MRI/CT clinics in Ontario centralized services in large urban centres, forcing rural patients to travel further to receive care after “unprofitable” small town clinics were shut down.