On Public Asset Sales

Selling off public assets that yield steady and lucrative revenue streams is rarely a good idea. In Ontario, Kathleen Wynne did just that with 60% of Hydro One so she could claim a balanced budget. It is a betrayal I will never forgive her for.

As I have written previously, Justin Trudeau would like to do the same thing, for similar reasons, with our major airports. It is a very bad idea, as are most of the schemes promoted by neoliberals.

Happily, the possibility of relief from such madness is shimmering on the horizon:

A Parliamentary committee is recommending against the Liberal government’s plan to sell off Canada’s airports to raise billions in capital to be used towards other public infrastructure projects.

“Limit rising passenger and operational costs by preventing the privatization of Canadian airports,” the House of Commons Standing Committee on Finance, said in its report of the Pre-budget consultations in advance of the 2018 federal budget.

The committee's report, Driving Inclusive Growth: Spurring Productivity and Competitiveness in Canada

summarized the strong opposition to airport privatization by various stakeholders, including the Air Transport Association of Canada (ATAC), which believes that the sale is near-sighted and will result in significantly higher costs for airlines and passengers.

“Recent experience in such projects, for example in Australia, has resulted in costs per passenger to increase by 50% in the decade following airport privatization,” ATAC told the committee in a briefing. “To add insult to injury, the government would impose a huge new burden on our industry and its passengers while not reinvesting one penny of the billions generated back into aviation.”

Empirical evidence like this should carry much weight, but the Trudeau government is refusing to release the privatization study by Credit Suisse Group AG that it commissioned. Therefore, whether such disquieting facts were even considered is unknown. This unwholesome secrecy is opposed by the National Airlines Council of Canada, which is calling for open and public discussion around the entire issue.

I seem to recall Justin Trudeau, upon taking office, promised an open and transparent government. What a difference two years in office have made to that promise, eh?

Justin's Secrecy

There will always be those unable to see beyond the obvious when it comes to Justin Trudeau. His sunny smile, his platitudinous assurances that we can have our pipelines and climate change remediation simultaneously, and his opaque insistence upon the necessity of an Infrastructure Bank seem to carry the day for some, apparently happy to suspend whatever critical-thinking capacities they may possess.

Unfortunately, this blanket belief in Trudeau's sincerity means that his neoliberal agenda is being under-scrutinized by the public. One of its most egregious manifestations is the secrecy around which the government has hired consultants to study the deliverance of our airports to private interests.

H/t trapdinawrpool for his twitter alert about the following:

A secretive project to generate billions of dollars from the sale of major Canadian airports is pushing ahead with the hiring of consultant firm PricewaterhouseCoopers (PwC).

The firm is to "act as a commercial adviser assisting with additional analytical work with respect to advancing a new governance framework for one or more Canadian airports."

The shield of secrecy was peeled back only due to a freedom-of-information request from the CBC, coupled with some stellar sleuthing. The very fact that this project was withheld from public eyes is the first red flag.

But wait! There's more!

The new contract follows a report delivered last fall by Credit Suisse Canada on how Ottawa might gain billion-dollar windfalls through the sale of its interests in Canada's Big Eight airports and 18 smaller airports. The eight are in Toronto, Vancouver, Montreal, Calgary, Edmonton, Ottawa, Winnipeg and Halifax.

Credit Suisse was hired by CDEV, [Canada Development Investment Corp.] acting on behalf of Finance Canada, in a contract announced in a terse two-sentence release on Sept. 12.

The Crown corporation and Finance have since refused to release the Credit Suisse report, the contract terms or even the cost to taxpayers, despite requests by an opposition MP and by journalists.

And, again typical of the neoliberal orientation, private entities were given veto power over the release of information:

... the contracts with Credit Suisse and PwC contain clauses that give the firms vetoes over the public release of any information, including the cost of the work.

Why should any of us be bothered by any of this? There are many reasons, but Craig Richmond, the president and CEO of the Vancouver Airport Authority, recently addressed one of them when he said,

... prices for airlines and passengers would only increase as for-profit entities seek to make back their investments.

[He understands] the attraction of a one-time big profit for Ottawa, but "that's like selling the furniture in your house to cover your credit card debts."

Mr. Trudeau's government euphemistically refers to this whole process as "asset recycling." Those less enamoured of the Prime Minister and his band of sunny men and women, I suspect, would call it something else entirely.