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SIBs: a new way to privatize

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Dear friends,

If there’s one thing Ontario Liberals are good at, it’s creating distractions.

On April 16, they announced their plan to sell 60 per cent of Hydro One. They knew it would be unpopular. So what did Premier Kathleen Wynne say about it? Not much. She spent the day talking about beer in grocery stores.

Fast-forward to October 29. That’s when our Financial Accountability Officer, Stephen LeClair, gave us his take on the Hydro One sale. He was pretty clear: the whole idea is a money-loser. So what did the Liberals want to talk about? Homelessness. The day before, Wynne’s good friend Deb Matthews, President of Treasury Board, set a 10-year deadline to end homelessness in Ontario.

Now, the Liberals have been in power for 12 years. A cynic might say that if they really cared about ending homelessness, they would have done it already. But even their distractions reveal their true colours.

The defining policy of this Liberal government is privatization. Sometimes it’s contracting out. Sometimes it’s “public-private partnerships” (P3s). Sometimes it’s selling assets. In every case, the result is the same: public dollars go to private profits. You and I pay more.

And now the Liberals are bringing us a new form of privatization: Social Impact Bonds, or SIBs.

SIBs are a clever way for private investors to profit from human suffering. The government already has a SIB project in the works for homeless people. Basically, it will work like this:

  • Investors will team up with an agency to provide housing and supports to homeless people with mental illness.
  • Investors will pay for the housing and the staff for the program.
  • With new supports in place, formerly-homeless people should make fewer visits to emergency rooms and shelters. They should take fewer rides in ambulances and police cars. Government will use the money saved to pay back the investors – with a tidy profit.

SIBs sound good in theory. In practice, they’ll be like any other kind of privatization. Investor lobbyists will be crawling all over MPPs like ants at a picnic. Investors will get the contracts and the profits. MPPs will get the campaign donations. Public dollars will pay for both.

Meanwhile, public services will get short-changed. Again.

OPSEU members need to understand Social Impact Bonds. To help you do that, we’ve produced a new policy paper (read it here) that lays out why SIBs are not good for public services and not good for the people we serve.

Let’s not be distracted by the promises of the privatizers.

In solidarity,

Warren (Smokey) Thomas
President, Ontario Public Service Employees Union

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