April 19, 2004

Commentary: Louder voice needed in defence of public-private partnerships to restore infrastructure

By: Colin Isaacs
While Canada's environment industry was attending the recent GLOBE 2004 conference and trade show, CBC television's The Fifth Estate broadcast "Dead in the Water," which it co-produced with the National Film Board. The program - not the first that CBC has done on this topic - emphasized the problems with so-called privatization of water. The timing was a coincidence, but the program illustrated how lacking in influence is Canada's environmental business community.

The show was nothing like a balanced presentation of the privatization of water issue. Opinions such as those of the Council of Canadians were dominant: privatization of water leads to problems. There was almost no mention of the problems caused by government management of water, such as declining supplies, increasing pollution, unreliable quality and collapsing infrastructure.

Canada is at serious risk of falling behind in environmental infrastructure because neither government nor business will take on the rhetoric of organizations such as the Council of Canadians. Anti-profit campaigners, sometimes appearing as anti-globalization campaigners, are totally dominating the public debate on issues such as distribution of water, waste

management services, trade as a contributor to international development, and provision of health care facilities.

The detailed Budget Plan 2004, tabled in the House of Commons as part of the federal Finance Minister's recent budget, does present municipalities with a few interesting financing ideas. The document suggests that private financing and expertise can help provide public infrastructure, and debt markets can play a role in municipal finance. It also recommends full accrual accounting as a tool to encourage better planning for replacement. Unfortunately, this extremely tentative foray into the world of public-private partnerships gathered no media attention and is unlikely to be read by any significant number of municipal politicians.

The fact is that if the quality of health care meets Canada Health Act criteria, what does it matter if the hospital building is owned by a private company? As long as your drinking water consistently meets public health standards, do you care if the pipes and pump house are owned by a private company rather than by the municipality?

Canadian voters are eager to reduce public sector debt. At the same time, however, our environmental, public transit and health infrastructures are in desperate need of upgrade and expansion. The solution is to encourage private sector investment to meet our public infrastructure needs. This will happen only if the private sector at least shares operational responsibility with the public sector. For good reason, few private investors will lend money to government-run projects. Public-private partnerships can work well: a great deal of evidence indicates that the government will fulfill its role as regulator far more effectively when it is regulating the private sector than when it is regulating itself.

If Canada is to regain its position in the forefront of the global economy, the public needs to hear the case for public-private partnerships. Unless we move quickly to bring private sector investment to our multitude of environmental and health care infrastructure needs, Canada is at serious risk of losing its quality of life and its economic advantage.

Colin Isaacs, head of the CIAL Group and publisher of the Gallon Environment Letter, reviews environment-related trends in policy(corporate and government) and legislation for ELW. Comments may be E-mailed to cisaacs@compuserve.com.

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