All Manner Of Excuses

 

In the debased environment that now constitutes our politics, our 'leaders' can without a doubt justify just about anything they do as being in the national interest. For example, if you are Mark Carney, you can explain the proposal to sell out our public infrastructure, (i.e., airports) by saying that it will unlock value, the funds derived from which can be repurposed for 'national' projects. 

The next item on Carney's hit list seems to be climate-change mitigation. It is being widely reported that, in order to placate Alberta (an oxymoronic concept if I have ever heard one) he is about to gut that emission standards for that province's oil giants.

Ottawa and Alberta are close to finalizing a new accord on industrial carbon pricing that would result in the fee going up to $130 a tonne by 2040, two government sources, one federal and one provincial, said Tuesday.

The problem is that this is a severe departure from one arranged under the Trudeau government.

An industrial carbon price is a critical element of Canada’s climate change strategy and, under the previous Liberal government, it was projected to contribute to significant reductions in emissions. However, if cabinet approves the new deal struck with Alberta, that price will be far less stringent than the $170-by-2030 charge announced by Mr. Trudeau.

If the federal cabinet approves the plan to raise the industrial carbon price only to $130 per tonne by 2040, analysis from the Canadian Climate Institute suggests it will result in “little to no emissions reductions in heavy industry.”

While on the subject of paying obeisance to the private sector, it is interesting to note that Mark Carney's strategy to double Canada's electricity generation seems to omit any renewables other than hydro:

In a speech Saturday at the Global Progress Action Summit in Toronto, ... [Carney said]: 

“We need a willingness to use — it can be sometimes hard to accept — we need a willingness to use all sources of energy, including some gas and all technologies beyond conventional renewables,” he said, listing nuclear, hydro, small modular reactors, carbon capture, and geothermal energy sources.

Why no mention of solar and wind as energy sources? Indeed, in all of the projects thus far approved by the government to "build Canada Strong," I am unaware of any federal support for either of those technologies. Could one of the reasons be they don't sufficiently enrich corporate coffers?

And finally, if you can forgive the rather discursive quality of this post, I see that our prime minister is mulling over more opportunities for private sector enrichment.

Buried deep in the pages of a discussion paper released Friday — one of two published for swift 30-day public consultations — is the announcement that the government is open to and seeking a report on the potential amalgamation of certain unnamed “key ports” in Canada and “divestiture” of others.

It comes two weeks after the federal budget revealed Ottawa is looking at privatizing airports as the Carney government pledges to maximize the value of assets for Canadians, streamline operations, and sets its eyes on the creation of a $25-billion sovereign wealth fund.

While no further details have been released, the trend is clear. My late father-in-law had a favourite saying: "Socialism for the rich, free enterprise for everyone else." Considering what seems to be on the prime minister's mind these days, selling off infrastructure that has been built and maintained by the Canadian taxpayer certainly underscores the truth of his observation. 

 

 

Paved With Good Intentions

 

To want Canada to prosper during these tumultuous times is both noble and natural. Federal government leadership to forge that path is something we expect, given that our problems are countywide. However, this is the point at which visions on how to achieve that sought-after prosperity diverge.

For the Carney government, it seems that more privatization is the route to go. He is openly talking about 'unlocking the value' of our airports.

Canada is willing to let foreign investors buy stakes in Canadian airports, Prime Minister Mark Carney suggested Wednesday, as the federal government considers trying to raise money to fuel its economic growth agenda through the privatization of public assets. 

“We are wide open to foreign investment,” Carney said when asked whether the government would allow foreign investment into Canada’s network of publicly owned airports that could be worth billions of dollars. 

Following its spring economic update last month, Carney’s government signalled it is looking at selling off Canadian airports to private owners as part of an effort to improve operations for travellers and raise money. The prime minister said the goal is to make airports “better serve Canadians” and to raise money that is “tied up in those airports” to reinvest in “other ventures that will grow are economy.” 

While those airports' revenue streams would induce salivation in many an investor, there are reasons to be cautious.

Drawing upon Ontario's disastrous experience in the selling of cash cow Highway 407 under Mike Harris, Linda McQuaig suggests the real losers will be consumers.

[S]ince its privatization in 1999, the 407 has cost drivers an estimated $25 billion in tolls. And we’re only getting started! The privatization deal lasts for 99 years, and by the end, Ontario drivers will have paid tolls likely amounting to a gut-wrenching $150 billion. The National Bank of Canada described the 407 as “a value-generating monster.”  

A sale of our airports will not, despite Carney's claim, be good for the flying public. 

Of course, not all privatizations are as disastrous as the 407. But one feature they all seem to share is that they ultimately cost consumers more — even though this higher cost is typically denied at the outset, when the privatizers often maintain consumer costs will actually fall.  

Because Hwy 407 is a monopoly, regular market forces such as competition do not apply. 

Airports are also regulated monopolies, offering lucrative revenue streams that make them highly attractive to private owners who can raise parking rates and charge airlines higher landing fees, which are passed on in higher ticket prices. 

Passengers can’t just switch to another airport any more than Toronto commuters can just move to another highway. In both cases, travellers are captives, even though they paid to build these assets through their tax dollars. 

Sufficient privatization of assets has taken place to draw some pretty solid conclusions: 

A 2022 study published by the U.S. National Bureau of Economic Research examined more than 2,400 airports worldwide; about 20 per cent had been privatized. The study concluded that, while airport privatization can increase efficiency, it often makes flying more expensive for travellers.  

To a hammer, everything is a nail. Given Mark Carney's extensive experience in the private sector, it is not surprising that he is looking at the issue of privatization through a very narrow lens. Unfortunately, that lens means he neither sees nor really cares about the negative effects it will have on those many of us ( i.e., the majority) who live outside his very privileged circle.