I interviewed Maude Barlow, the national chairperson for the Council of Canadians, for our upcoming issue. She was in town to take part in a forum put on by Regina Water Watch concerning the upcoming wastewater referendum, and as we were putting together a list of questions about P3s and wastewater I figured she was a good person to turn to for answers.
I only used a few quotes from her in the final article so I’m posting the entire interview below…
* * * * *
Prairie Dog: What would you say is the worst thing that could happen if the No side wins and the P3 goes through?
Maude Barlow: My guess is it’ll be revisited in five years because all over the world when municipalities are coming into contracts with public-private partnerships they’re questioning it within a few years. Everybody’s been talking about the immediate cost and the arguments been going back and forth. But what we have to remember is over the life of the 30-year contract, paying high water rates by the people of this city, that’s the cost, that’s the issue. And people have got to start to realize what looks like some free money — in this case from the federal government and in other cases the company itself puts the big investment in — once they’ve paid back their investment they’re free to rake in profits as long-term high water rates. And it’s not going to take people here very long to realize that that’s the case.
I quoted a study from the U.S. that found that private water rates, or water rates in privatized systems, are 50 per cent higher for the water delivery and 30 per cent higher for waste water delivery than public systems. Somebody asked me to point blank explain the difference between private and public and I said, profit. That’s the difference. In a public system, it’s the same amount of money; you’re raising it from taxes or you’re raising it from water rates, water services. And so the same amount of money has to cover for a private company not only the supposed delivery of whatever services they’re delivering but profit for their investors. Something has to give. And that’s the fundamental difference. It doesn’t take long for most municipalities to figure that out. Often, the company comes back — this is just standard — the company comes back to the local municipality and says, Gee it’s more expensive than we thought and we’re in cost overruns and we have to charge more, we can’t keep going. So, they either back out of it, or the city backs out of it or renegotiates and gives them more money. This is just classic.
The sun won’t stop shining the day after. But we will lose piece by piece control of our water systems in this country if people let the Harper government bully them into public private partnerships.
PD: But the thing we keep being told is that the big advantage to the P3 is cost — water rates will be set in advance, the Sewage Consortium won’t be able to adjust them, the Consortium will bring innovation and efficiencies that will more than offset their profit margin — everything we hear is that the costs are smaller with the P3.
MB: That’s just nonsense. There’s obviously no reason to think that a private company is any more efficient than the public company. If in fact they were to set rates and the municipality were not to budge, then you’d start to see declining services because the company simply has to make money, they have to make profit and something would go.
On average what goes is 30 to 50 per cent of the workforce. When you have a broken sewer line down the way it doesn’t get fixed that day. The water coming out of your tap, you’re not very happy with. It may be a week before someone comes to fix it. This is the story around the world of privatized systems. The only way they can keep up with the public system is to keep raising water rates. So they either cut their workforce in half or 25 to 35 per cent. Or they cut services. You simply cannot as a for-profit entity do the same job and find a 15-20 per cent overhead profit to send to your investors and not have something giving. It’s just a fallacy that the private sector can do it better than the public sector. If the job is done properly, it’s done properly.
I’m not saying the private sector can’t do it properly. But even if they do it properly they have to find that overhead for the profit and that’s the essential difference here.
When they talk about innovation, I can tell you that innovation around the world is where pollution abatement has been cut, it’s where services have been cut. This is just all gobble-di-gook to sell to an electorate who maybe hasn’t had time to really think this thing through or doesn’t have all the information. There’s absolutely no evidence whatsoever that they’re going to be able to do anything any more efficiently than the system we have currently.
PD: Seeing as the people on our council and in our administration aren’t stupid people, if the P3 is such a bad deal, why are they so convinced it’s the way to go?
MB: I think you just jump in on a bandwagon and you kinda don’t know how to jump off. Know what I mean? They just got gung-ho and they like that money from the federal government and it’s an enticement.
And it feels modern. You’re moving to this new thing. Of course it’s not new at all, it’s new in Canada but it’s not new around the world.
I think you just kind of become part of this little clique or something and it’s hard to get off the bandwagon once you’ve jumped on. If there was more time on the beginning and we could have gotten to individual councillors with this information and the information from around the world maybe… I mean, over 40 municipalities including Paris in France have re-municipalized.
The trend is the other way now. The trend is quite startling. China is doing a lot of privatizing and so is India but absolutely everywhere else, Latin America, all through North America, all through Europe, the trend is moving the other way. They are moving back to public systems after it hasn’t worked. I just want to place this information in front of people. This isn’t a my side thing, this is irrefutable numbers — facts. Municipalities are changing their minds. Paris just announced water rate cuts because they were able to take the profit out of the equation and people are thrilled to have their water back in public hands. This is information that the councillors here need. And maybe it got set up as a kind of “he said/she said,” and now they won’t listen to anybody with Regina Water Watch.
Someone said at the thing this morning, Well you people aren’t independent. Well, we have a scientist who was with Environment Canada for many years, a water scientist, who most certainly is independent. I’m independent. I have nothing to gain from this. This is years of study. This is what I believe. But I’m not a special interest group getting something from this, there’s nothing in this for me. This notion that because we have this view we’re ideological on one side and therefore what we say isn’t credible. It’s just the information is there and what we’re hoping is the city councillors individually will really look at it and understand that this is 30 years that they’re tying the hands of the people of this community. It’s a very very big commitment.
PD: I think one of the things people can’t wrap their heads around is this idea the amounts of money — we’re being handed $58 million but you’re saying the added costs that come with a P3 are higher even than that. I just don’t know if people get that–
MB: I know. It’s so much money they can’t even imagine. But over the years, Agbar is a private company that just got the contract to do water services in Barcelona, Spain. That’s a 50 year contract but it’s estimated that they’re going to make 1.4 billion Euros in those 50 years. In that, the 50 year contract is from the public purse. That is public money being sucked up to these private investors, to the CEOs who make phenomenal salaries. That is public money that could go back into keeping these water systems clean and upgrading infrastructure. You’re sucking up money for years and years.
That $58 millions is peanuts. That’s not the real money. That’s not where we should be looking. It’s the long term profits that these companies are going to be making. And besides, we should be saying to the federal government that we don’t agree with your blackmail of municipalities and saying that [we] have absolutely no choice. Federal government money is public money, that’s taxpayer money. And taxpayers and voters should have the right and municipalities to decide themselves if they want to go public or private.
PD: What if the Yes side wins and the P3 doesn’t happen? Presumably city admin will get right to work putting together a different deal. What options are available to the city to contain costs and shift risk if they’re not going with a P3?
MB: I think they should put pressure on the Harper government. They should put pressure on their own provincial government and have [Premier Brad Wall] say to his friend Stephen Harper, We need this money, Saskatchewan needs infrastructure money, all the municipalities do.
We’re going through the same fight in St Johns, New Brunswick where many of the councillors have said, we don’t want to go private but we just don’t feel we have a choice.
I feel we should fight back. I just think saying “Uncle” and we can’t have the money and that’s it and just accepting it is wrong. I think we should be demanding of the federal government that they provide funding, it’s their responsibility, it’s always been a shared responsibility to build infrastructure. And I wouldn’t buy this notion for a minute.
We should start putting pressure. This government is vulnerable. They’ve done a lot of things that have made a lot of people mad and I think we should start fighting back. And personally I don’t think it should be accepted that that money isn’t there because this decision gets made.
PD: There are two things that certain councillors have accused Regina Water Watch of lying about. The first is related to how the city is calling this a sewage plant and that this referendum isn’t about the control of our water. They say that this isn’t about water it’s about sewage.
MB: I wish you’d heard [former Environment Canada research scientist, Marley Weiser] this morning. She was so clear. She talked about the threat to the Wascana Creek and the watershed here from current waste water systems and the need for this upgrading and the need for public control of this because waste water is water. It goes right back into the stream that provides our water. You can’t just separate it out. It’s as if it is some kind of disgusting dirty thing that we throw off into the sky or something and it never comes back here. It’s part of the ecosystem and it’s what we ingest again when we drink tap water. It’s all the same thing. And it’s waste water around the world and the [failure to clean] waste water properly that’s killing people, much more than lack of access to water. It’s the dirty water. So the fight at the UN was around the fight for the human right to water and to sanitation.
So that’s just a false and dishonest split that they’re making here. There is one ecosystem and if we hurt it we hurt all aspects of the water system.
PD: The other thing they point to is how Regina Water Watch has been calling this privatization. These councillors are saying this isn’t privatization because we’ll continue to own the plant and control the rates–
MB: It is privatization. When you are turning over the operation, the building and operation of a facility of an essential public service to a private for profit company even though you technically still own it, you are privatizing it. You are signing an agreement that we can’t even see for heaven’s sake that is basically giving control of this essential public service to a for-profit company. It may not go as far as Margaret Thatcher went in selling the whole kit-and-kaboodle back in the 80s. But it is privatization nonetheless and people shouldn’t be fooled by that.
PD: Another thing that council has been saying — the Chamber of Commerce keeps bringing this up as well — is that Regina Water Watch is being supported by CUPE, the largest public sector union in the country. I’ve even heard people say things like CUPE and the Council are using Regina as a pawn in their strategy to set a precedent that P3s can be stopped.
MB: Well, first of all, we’re trying to stop it wherever it happens. We’re fighting hard in St Johns, we won in Abbotsford. Wherever this pops up we’re going to be there. There’s no question about that. Secondly, there is absolutely nothing wrong with public sector unions promoting and protecting the public good. I mean, what the heck should they be doing? And I thank them for it and I think people should stop thinking of that as a negative thing. These are people who deliver essential services caring about the quality of that delivery and I think we shouldn’t see it as a negative thing.
But my heavens, if you want to look at a special interest group, let’s look at the big business lobby, let’s look at the companies that are going to spend to make such a windfall if this continues to be a landslide across the country and we start to lose control of our water systems in this country. These corporations stand to make billions and billions of dollars. That’s where your special interest lies. My organization is non-profit, we’re non-partisan, we don’t even have a charitable tax status. We’re in this because we believe in fighting for the rights of people and the rights of the environment. I think that that’s just name calling because they can’t think of anything real to say.