Federal government takes the wrong page from provincial playbook
If you aren’t enamored with the way the books have been juggled in Queen’s Park, you might want to brace yourself for the direction we are headed as a nation. It’s no secret that there is a lot of inter-play between the federal and Ontario Liberal governments. Whether it was campaigning like best buddies or filling so many of the new positions in Ottawa once the federal cousins had won, Ontario Liberals have had a lot of influence in the look and feel of the newer government in Ottawa. One place this is becoming abundantly clear is with fiscal policy.
The common thread relates to infrastructure spending commitments and some creative language that really amounts to privatization of public assets. Think selling the controlling shares in Hydro One, but on a national scale. Given the vocal and consistent backlash against the hydro deal, doubling down on this type of fuzzy economics shouldn’t seem attractive to the federal Liberals, but they may prove to be as tone deaf as their provincial counterparts on this front.
One thing is certain, the Liberal government made big commitments on new infrastructure spending during the election. Even though their budget fell more than $3.4 billion short of what they promised, it also gave a glimpse of how their privatization scheme will work. Not only does it come directly from the provincial playbook, it even uses their euphemistic language to partially hide what is happening.
Buried deep inside budget 2016 was a note that the Liberal plan to pursue “asset recycling” which sounds innocuous and even ‘environmentally friendly’ until you scratch the surface. That’s largely because “asset recycling” is just a new phrase for privatization. Like on so many other issues the federal Liberals are offering a change of tone but the same old failed Conservative policies.
In Ontario, Kathleen Wynne promised big infrastructure spending but when it came time to pay for it she turned to the privatization of Hydro One-a deal that’s been criticized by the auditor general and will leave Ontarians on the hook for generations to come. That sale pretty much gave away a billion dollars of revenue every year for the paltry sum of four billion dollars. Anyone with a view beyond a four-year window will take that deal every day. And what did they call it? You guessed it, asset recycling.
Now the federal Liberals plan to take credit for infrastructure money they didn’t spend while leaving Canadians to pay the price through new user fees and tolls. They are hoping to attract big pension plans to ‘invest’ in infrastructure and then allow those entities to monetize these assets. It won’t be public infrastructure so much as guaranteed business opportunities for the biggest investors.
Andrew Coyne had a fantastic take on why this is a terrible idea in the National Post this week. He argues the projects should be entirely private, or entirely public. He explains that this mixed methodology usually amounts to ‘public risk for private profit.’ For Ontarians, it is a movie we have already seen and promises to open your pocket for non-government ‘public assets’ on a whole new front. Ultimately, this is one recycled policy that better belongs in the trash.
