Trust, But Verify

In these troubled times, when existential threats force Canada to undertake bold, new initiatives, it is sometimes difficult to fully exercise our critical thinking skills. We have a prime minister taking our country into new realms as he seeks to bolster both our resilience and defence against deep hostility from the United States, a country still inexplicably in the thrall of a madman, and I applaud him for many of those undertakings. He is surely the correct person to be leading us at this time.

However, as expressed in my previous post, I think he is making a big mistake in his plans to privatize the operations of four of our major airports: Montreal, Torotno, Calgary and Vancouver. And I am hardly alone in those misgivings.

The Star's Althia Raj offers her thoughts:

Airports are cash cows. Mostly monopolies, they are fantastic investments, where new investors are often able to set prices on everything from passenger charges to parking fees and force them upon a captive audience. 

On the CBC, economist Jim Stanford warned, “This is going to be Highway 407 of the skies.”

Highway 407 was built north of Toronto using public money, then turned over on a 99-year lease to a private consortium, which steadily increased tolls to the point where it is now one of the most expensive tolled highways in North America. 

Even Liberal caucus members are divided on the issue, likely fearing that such a sale will mean only one thing for passengers: higher costs to park, higher costs from airport concessions, higher costs to fly.

Australia serves as a cautionary tale:

Australia privatized a number of its major airports in the late 1990s and early 2000s. While the government was able to get a good price for those sales, consumer costs went up, according to Rod Sims, former chair of the Australian Competition and Consumer Commission.

"They removed the regulation on the airports prior to privatizing them. That meant those buying the airports knew they had a free rein more or less to do what they wanted," he told CBC News.

The Canadian Labour Congress has a similar warning: 

“Private investors don’t put billions into airports unless they expect to make billions back. The government is pointing to Australia as its model, and we’ve already seen the results there: higher costs for passengers and airlines, pressure on workers, and more airport revenue flowing to private investors.

Those who drop off passengers may be in for a rude surprise, if the privatized Heathrow Airport is any indication:

A £7 charge applies at Heathrow every time a vehicle enters the terminal drop-off areas*. Drop-off areas are located right outside each terminal, making for the easiest and quickest way to drop-off passengers.

And, as always, there is the voice of the people: 

A reminder that from the end of the Second World War through 1975, between 20—25 per cent of Canadian public debt was financed and held by the Bank of Canada. During that period, federal government capital expenditure funded highways, bridges, schools, hospitals and yes, even airports. The government did not go begging for cash from hedge funds.

But today, Prime Minister Mark Carney plans to sell off Canada’s major airports and recycle the proceeds for other infrastructure. In other words, investors will get up-and-running projects with established cash flow (where prices can easily be jacked up), whereas Canadians will carry the heavier risk and less profitable investments until mature enough for private owners to buy.

Modern capitalism in action: Corporations get the rewards; Canadians pay the charges and take the risks.

Larry Kazdan, Vancouver, B.C.

 

Privatizing airports is a big mistake — just look at Hydro One

Prime Minister Mark Carney says he is selling our public airports but keeping the land beneath them. That’s like selling an art museum with millions of dollars in art for a bargain price but keeping the land the museum sits on. Carney says he is “unlocking” the value of our public airports. Then says he is going to reinvest that money in other important infrastructure.

We heard the exact same argument and plan when then Ontario premier Kathleen Wynne privatized Hydro One and sent hydro rates through the roof. It used to be, privatization was only done by Conservatives. Now our public assets will be used to maximize profits for corporations. There is no free money, investors expect a good return.

Given the failures and dismal record of public asset privatization here in Canada and around the world, it is astonishing that Carney continues to promote privatization of public assets and infrastructure. Carney is engaging in public relations propaganda to pretty up profit, selling the myth it’s a beneficial way to finance infrastructure. The privatization of long-term-care homes where many died from neglect during the pandemic and Highway 407 and Hydro One has left the people of Ontario with no appetite for any more privatization of public assets. The privatization of Connaught labs by then prime minister Brian Mulroney also hurt us severely during the pandemic.

The privatization of rail, electricity and water and hospitals along with Brexit has made the UK’s economy a complete disaster.

During both World Wars and the Great Depression governments did not privatize public assets. They wisely kept them and we worked our way out of those terrible times with a robust public sector and non-profit public enterprise.

Carney and his Liberal caucus need to be reminded that the provincial Liberals were sent to the political wilderness for three elections in a row for their sale of Hydro One and the resulting rate crisis. Privatizing airports is a really big mistake. The same goes for seaports.

Paul Kahnert, Marham, ON

 What could private investment mean to Pearson airport and Toronto travellers? Here’s what the experts say, Sept. 16

This article mentions a $19 drop-off-fee at London’s Gatwick Airport. Gatwick is privately owned. What could that look like here? If you took the UP Express train to Toronto’s Pearson International Airport, would you be charged a drop off fee? What if you took the TTC Express bus to Pearson, would you be charged a drop off fee? What if you wanted a drink from the water fountain at Pearson, would you be charged a fee? What if you wanted to use the bathroom at Pearson, would you be charged a fee — and extra for toilet paper? 

I have been at privately-run airports where it cost $5 for a bottle of water and at another where you had to pay to use the restroom and pay extra for toilet paper.

I reluctantly voted Liberal in the last election because I believed Mark Carney was the best candidate to defend Canada, but if they follow through with this ill-conceived idea, I will vote against them in the next election.

Gerrard Weedon, Toronto 

Debate is healthy, and one of the backbones of a well-functioning democracy. Let us all hope Mark Carney respects that fact.