The ever-expanding, ongoing plan to drag Nova Scotia’s healthcare infrastructure into the 21st century — by tearing down and replacing three well-past-their-best-before-date buildings in the QEII hospital complex, expanding the Dartmouth General Hospital and constructing new outpatient clinics in the Bayers Lake business park and on the site of the former CBC building on Bell Road — is now projected to cost out at about $2-billion, give or take.
“We have not built something like this in our province in a very long time, if ever,” Premier Stephen McNeil admitted to reporters last week. Which is why, he explained, his government had decided to develop the new projects as a public-private partnership. You may remember public-private partnerships better as P3s.
Wait a minute. Didn’t we…?
Yes, we did. During the 1990s, a previous-incarnation Liberal government eagerly hopped into bed with private partners to build 39 new P3 schools. We got screwed. It was, says Christine Saulnier of the Canadian Centre for Policy Alternatives, “a failed experiment marred by cost overruns, massive private profits, mismanagement and an overarching lack of evidence-based decision-making.”
By the time it ended, the province had not only forked over close to $700 million to private developers to build and then lease back to Nova Scotians the use of the schools, but we also — insult to injury — then gave the developers another $215.9 million to buy back 37 of the schools at the end of their leases.
Although a 2010 auditor general’s report offered more bureaucratically couched conclusions, they were no less damning. “The findings in our report should be carefully evaluated by government prior to entering into complex long-term contracts in the future,” it warned.
Not to worry, McNeil said. We’ve got you covered this time.
Recognizing that “P3 business cases and value for money analysis are highly debated in public and political forums,” his government last winter issued RFSQ Number WS53945497 — that’s a Request for Supplier Qualifications to thee and me — to hire an outside consultant to “conduct a value for money analysis that compares a public sector-led approach or traditional approach to P3 delivery models… Nova Scotia,” the government declared, “is interested in ensuring that the evaluation performed in this scope of work is evidence-based, complete and accurate.”
On July 20, 2017, the government announced it had selected Deloitte, a global financial consulting firm, to carry out the analysis. “Deloitte,” the province’s release boasted, “has extensive financial advisory services experience and has advised on the planning, procurement and implementation of some of the largest and most complex new hospital projects in Canada.”
All good.
Fast forward to last week and McNeil’s announcement that his government has decided to go ahead with plans for a new public-private partnership for the hospitals.
But… wait a minute. Again.
What did the Deloitte report actually say in its “evidence-based, complete and accurate” value-gained-for-money-spent analysis of private-public partnerships?
None of your business.
There’s much, of course, we already know from experience — our own and other governments’ — with P3s. None of it is good.
According to Ontario’s auditor general, for example, that province paid $8-billion more than it needed to in just one decade’s worth of building hospitals, courthouses, and jails, thanks to its romance with P3 financing.
The Centre for Policy Alternatives went a step further in its 2015 report Privatization Nation, a “cross-country catalogue of privatization disasters,” concluding “governments rarely seem to get privatization right, and more often get it wrong with astonishing regularity.”
And then there’s this 2015 report by Public Services International, a global trade union federation representing 20 million workers in 163 countries. Its Research Unit examined close to $650-billion worth of P3 projects “in countries rich and poor” around the world over the course of 25 years. P3s, its study concluded, “are an expensive and inefficient way of financing infrastructure and divert government spending away from other public services. They conceal public borrowing, while providing long-term state guarantees for profits to private companies.”
OK, OK, that’s all well and good, but what does Deloitte itself — the company we paid $500,000 to analyze the wisdom of P3s and prepare a “final report and recommendations on the model that best suits Nova Scotia’s requirements and accompanying procurement strategy” for new hospital infrastructure — have to say in its report to the McNeil government.
We don’t know. Why not? Because “your Liberal government,” which, since 2013, “has been dedicated to being the most open and transparent government in the country, tirelessly working to improve public trust, increase citizen engagement and enhance government services for you, the taxpayer,” won’t tell us.
Why not? Because, as the premier told the CBC, “revealing it now could negatively impact the competitive process and resulting negotiations.”
Really? The government can’t just black out a few numbers and release the rest of the mountain of evidence on which Deloitte’s evidence-based conclusion must be based? Or is that evidence merely emperor-has-no-clothes smoke and mirrors, a pre-determined ideological conclusion in search of some happy-face support?
As the Canadian Centre for Policy alternatives put it in Privatization Nation:
Canadian politicians persist in their pursuit of privatization, sure that “this time, they’ll get it right.” Indeed, when confronted with the privatization failures of the past, many politicians will assure us that they have ‘learned from past mistakes’ and will apply extra caution ‘this time.’ What is maddening about the ‘this time it will be different’ rhetoric is that it never seems to be… This raises the question of whether there is not something inherent in the very idea of privatization that seems to court disaster.
It’s a question we all should be asking.
In the face of all the evidence it’s hard to comprehend the stupidity of this decision.
This is so maddening. Thanks for the well-researched article.
Excellent piece Stephen. Terrible news for Nova Scotia taxpayers, hospital patients and Haligonians who will have to live with the new hospitals for many decades to come. In 2007, the architect Moshe Safdie resigned from his role in designing the billion dollar McGill University Health Centre Hospital (MUHC) after the Quebec government decided to make it a P3 project.
Here’s what he told the Montreal Gazette:
Safdie criticized the Quebec government for deciding to construct the hospital as a public-private partnership, or PPP. Such arrangements are “highly problematic,” he said, because the private partner invariably seeks to cut costs at the expense of innovation.
P3s are fine for building warehouses, he added, but not for something as “qualitatively sensitive” as a hospital.
“It’s in the nature of the beast when you do a PPP,” Safdie told The Gazette. “You can call it cutting corners. The objective of the private developer, in order to win this project, is to produce the cheapest possible solution.
“I’m deeply concerned that there would be compromise. My experience is that the PPP process … is not going to lead either to innovation or anything outside the box, other than the minimal interpretation of the written specifications.”
Safdie argued although the MUHC has retained four Quebec architectural firms to devise the “output specifications” for the hospital, the private international consortium will have the final say on the concept and the design of the hospital.