Corporatizing Canada: Making Business out of Public Service

By Jamie Brownlee, Chris Hurl and Kevin Walby

From schools to hospitals, from utilities to food banks, over the past thirty years corporatization has transformed the public sector in Canada. Economic elites take control of public institutions and use business metrics to evaluate their performance, transforming public programs into corporate revenue streams.

Senior managers use corporate methodology to set priorities in social services and create “market-friendly” public sector cultures. Even social activist organizations increasingly look and act like multinational corporations while non-governmental organizations pursue partnerships with the same corporations they ostensibly oppose.

Corporatizing Canada critically examines how corporatization has been implemented in different ways across the Canadian public sector and warns us of the threat that neoliberal corporatization poses to democratic decision-making and the public at large.

• Language: English
• Publisher: Between the Lines
• Release date: May 24, 2018
• ISBN: 9781771133593

Jamie Brownlee

Jamie Brownlee is a teacher and researcher at Carleton University and the author of several books including Academia, Inc.

Book preview

Corporatizing Canada

Corporatizing Canada

Making Business Out of Public Service

Edited by

JAMIE BROWNLEE, CHRIS HURL, AND KEVIN WALBY

BETWEEN THE LINES

Toronto

Contents

Acknowledgements

Introduction

Critical Perspectives on Corporatization

Health Care

1: Healthy Profit

Private Finance and Public Hospitals

2: Three Waves of Health Care Corporatization in Ontario Hospitals

Education

3: The Rise of the Corporate Cashroom

Corporatization and the Neoliberal Canadian School

4: Carbon Capital and Corporate Influence

Mapping Elite Networks of Corporations, Universities, and Research Institutes

5: International Students as a Market in Canadian Public Education

6: How and Why to Change the Ways We Try to Change the Corporatization of Canada’s Universities

Criminal Justice

7: Police Foundations and the Corporatization of Criminal Justice in Canada

8: Do Construction Companies Create Criminal Justice Policy?

Reflections on the Nature of Corporate Power in the Canadian State

9: Corporatizing Therapeutic Justice

The Case of the Winnipeg Drug Treatment Court

Policy-Making

10: Corporatization and Federal-Provincial Relations

11: Corporatizing Urban Policy-Making

Management Consultants, Service Reviews, and Municipal Restructuring

Civil Society and the Non-Profit Sector

12: Managerialism and Outsourcing:

Corporatizing Social Services in Canada’s Non-Profit Sector

13: The Corporatization of Food Charity in Canada

Implications for Domestic Hunger, Poverty Reduction, and Public Policy

Public Utilities and Resource Governance

14: Pipelines, Regulatory Capture, and Canada’s National Energy Board

15: Murky Waters

When Governments Turn Water Management into a Business

16: Learning from Corporatization

The Good, the Bad, and the Ugly

Contributors’ Biographies

Notes

Index

Copyright

Acknowledgements

Jamie Brownlee and Chris Hurl thank Bill Carrol and Wally Clement for all their support over the years, and for their inspiration in undertaking critical corporate research. Kevin Walby would like to thank Bilguundari Enkhtugs, Antigoni Lampovitiadi, and Brendan Anthony Roziere for their assistance. He dedicates this book to Terry Wotherspoon and Eric Kempthorne for getting him interested in sociology, as well as Dorothy E. Smith and Bill Carroll for their teachings, writings, and guidance. We thank everyone at BTL as well.

Introduction

Critical Perspectives on Corporatization

Jamie Brownlee, Chris Hurl, and Kevin Walby

Social activists and critical scholars have often used the concept of corporatization to describe the changing nature of the Canadian state over the past thirty years. The concept evokes the image of economic elites controlling public institutions and using business metrics to evaluate their performance. Corporatization is also used to describe the expanding discretion of senior managers to set priorities in health and social services, the creation of market-friendly public sector cultures, the development of new contractual arrangements between the public and private sector, and the capture of regulatory agencies by industry. In the popular press, the term corporatization is invoked to explain changes in areas as diverse as mental health, foreign aid, LGBTQ pride events, and the funeral industry. (1) Clearly, corporatization means different things to different people, with it becoming a sort of catch-all concept to describe a multifaceted set of political and economic processes associated with neoliberalism and growing corporate power. However, little attention has been devoted to exploring what corporatization means, to assessing its process and impacts, or to investigating how it is taken up across different types of public agencies and institutions. A small body of research has examined the effects of corporatization around the world, initially looking at North America and Western Europe, and, more recently, the Global South. (2) Much of this literature focuses on public utilities, such as electricity and water, as well as health care and higher education, although research has increasingly focused on other areas of service delivery. Some researchers have also examined the growing impact of corporatization on civil society. For instance, recent scholarship has exposed how social activist organizations increasingly look and act like multinational corporations, and how non-governmental and non-profit organizations are pursuing partnerships with the same corporations they ostensibly oppose. (3)

Corporatizing Canada: Making Business Out of Public Service critically examines how corporatization has been implemented in different ways across the Canadian public sector—from schools, to criminal justice organizations, to utilities, hospitals, and food banks. What becomes clear is that there is no universal blueprint or master plan that is applied across these different areas. While the notion of corporatization might conjure the image of boardroom decisions being orchestrated by shadowy corporate leaders, the contributions in this volume show how corporatization involves a constellation of policies, programs, and practices that play out differently across institutional settings, shaped by distinctive histories, geographies, and forms of resistance.

In this introduction, we begin by highlighting three distinct but interlocking processes that our authors—including activists and scholars—touch on as aspects of corporatization that are implemented within government agencies, public institutions, and community organizations across Canada. These are: (i) corporatization as arm’s length administration; (ii) corporatization as expanding managerial control and business-like organization; and (iii) corporatization as public-private integration. By focusing on these three processes, we are not suggesting that there are no other practices that are part of corporatization or that these three aspects operate independently. Rather, we have focused on what appear to be the most prominent themes in this volume. We conclude with a discussion of neoliberal corporatization, including how it operates as a political and ideological process, and the threat it poses to democratic decision-making and the public at large.

Corporatization as Arm’s Length Administration

Corporatization involves implementing institutional arrangements positioned at a distance from the realm of formal politics. As David McDonald notes, this process creates arm’s length enterprises with independent managers responsible solely for the operation of their own immediate organization, and where all costs and revenues are accounted for as though it were a stand-alone company. (4) Corporatized institutions are granted a degree of autonomy from politicians and the realm of political discourse in setting priorities. They typically have a separate legal status from other public agencies and an organizational structure—such as a board of directors—similar to that of private sector companies. According to McDonald, these corporatized entities now comprise the bulk of the public sphere in many Western European countries, and recent studies suggest that corporatization is becoming a dominant form of service delivery around the world. (5)

In Canada, there are many examples of arm’s length administrative arrangements in the delivery of public services. For example, EPCOR Utilities Inc. recently assumed control over water services in Edmonton. Whereas the municipality previously provided water services, EPCOR is organized through a board of directors that acts autonomously from the city. They are financially ring fenced and responsible for managing their own revenues, and politicians and political parties consequently have little say over how water services in Edmonton are managed, how rates are set, or how decisions about this vital public utility are made (see Lui, Chapter 15 in this volume). Other examples include BC Hydro, the Toronto Transit Commission, and Infrastructure Ontario. Each of these agencies operates at arm’s length from government, with decisions concentrated in the hands of a board of directors who act with a degree of autonomy in setting service priorities. It is the responsibility of these officials to ensure that the services continue to function and generate enough revenue to stay financially solvent.

The forms of corporatization that most deeply entrench private interests and result in commodification and commercialization reflect a distinct neoliberal character. Neoliberal corporatization represents the pinnacle of arm’s length services being run like businesses or being operated to create private profit. However, it is important to note that some researchers (see McDonald, Chapter 16 in this volume) argue that corporatized stand alone agencies can also operate in a more progressive way. With a focus on the Global South, McDonald argues that many corporatized utilities have bucked the neoliberal trend . . . openly resisting marketized forms of public management and retain a commitment to universality and equity. (6)

Organizing public services through arm’s length forms of administration is not limited to neoliberal regimes. These forms of management have a long lineage, with variants of corporatization evident in liberal welfare, social democratic, and socialist regimes over the past century. Consider the movement towards public ownership by Canadian municipalities in the late nineteenth and early twentieth centuries—initially through assuming public ownership over water and gas services, and culminating in the formation of larger provincial bodies and provincial and federal agencies such as Ontario Hydro and the Liquor Control Board of Ontario. (7) The formation of stand-alone public agencies in the wake of the Second World War was thought to depoliticize service delivery, making it a matter of technical administration, which could be implemented uniformly. Corporatization in this context involved the establishment of public agencies that stood at arm’s length from the corrupt patronage networks of political machines, and were managed by a body of impartial managers who were concerned with running services as cleanly and efficiently as possible.

In the midst of economic crisis and fiscal restraint, the form of corporatization adopted from the 1970s onwards has had an increased emphasis on profitability at the expense of national goals and public welfare commitments. (8) For example, the public, non-commercial objectives of Canadian National Railways (CNR) (i.e., transporting passengers along unprofitable routes, transporting grain in western Canada at discounted prices) were largely abandoned after 1975 when the organization was redefined as a profit-seeking enterprise. Similarly, the public service mission of Air Canada (i.e., extend transportation to remote areas of the country, unify Canada) was modified in 1978 after a new law required the firm to become a profit-generating organization. Predictably, Air Canada’s public commitments were jettisoned, and its non-profitable routes abandoned. The reorientation of these kinds of state-owned enterprises away from break-even operations providing an essential public service toward profit-seeking enterprises proved to be a foundational element of the corporatization process in the years ahead. (9) Today, many corporatized entities appear to be just as commercially oriented as their private sector counterparts.

While it is important to consider the evolution of corporatization in Canada, this volume makes clear that one of the consistent, distinctive aspects of the process is the linking of market-oriented operating principles with stand-alone, state-owned entities. (10) In the Canadian context, the separation of public agencies from formal political structures is paralleled by a tendency to treat them like businesses. It is this business-like operation of public agencies that is a key component of corporatization today.

Corporatization as Expanding Managerial Control and Business-Like Organization

Corresponding with arm’s length forms of administration, corporatization in Canada has involved efforts to increase managerial control over public services. The emphasis on arm’s length forms of control is based on the capacity of managers to achieve a degree of autonomy to direct public services. As John Clarke and Janet Newman note, managers must be given the right to manage and the freedom to make decisions about the use of organizational resources to achieve desired outcomes. (11) Moreover, corporatization not only increases market-based logic in the public sector, it creates new forms of public management and auditing by subjecting public services to techniques of good financial housekeeping. As Clarke and Newman point out, what services are to be provided to whom, and according to what order of priorities, become part of the business decisions of managers subject to the logics of strategic positioning and financial survival. (12) The needs of the public are then subordinated to the economic bottom line, as managers try to increase efficiency and cut costs.

In Canada, as in other countries, this form of corporatization is often associated with the principles of New Public Management (NPM), which emerged as a hegemonic managerial paradigm in the late 1980s and early 1990s. However, an emphasis on managerial control was also evident after the First World War, when American management consultants were brought in to develop job classifications and scientific management schema, enabling the co-ordination of public services through centralized administration. In the early 1960s, the influential Glassco Commission famously urged Ottawa to embrace the latest corporate personnel policies in letting managers manage. (13) Proponents of NPM today see corporatization as a way to usher in a more business-like approach to public service organization and delivery, and to facilitate market-friendly public sector cultures and ideologies. Public institutions increasingly use market-like mechanisms to deliver services and are being run according to market-oriented principles, such as competition, cost-reflexive pricing, financialized performance indicators, and competitive outsourcing. Public services are cast as commodities to be bought and sold, and service users are treated more as customers than citizens. The result is publicly owned entities that mimic business discourses and practices, with a short-term focus on financial ends.

To practice good financial housekeeping and achieve a state of business-like service delivery, managers use a range of management schema, and auditing and performance metrics. Indeed, a central aspect of the corporatization process in Canada has involved the development of new kinds of institutional arrangements for the measurement of economic performance, as well as new technologies that appraise value-for-money and identify opportunities for cost-savings and efficiencies. This shift is reflected, for example, in the rise of programs such as the Ontario Municipal Benchmarking Initiative, through which municipal officials delivering services are evaluated according to the degree to which they are competitive with other jurisdictions.

The implementation of these managerial programs enables the concentration of power in the hands of senior managers, fashioning themselves after corporate CEOs. In this role, many of these managers have reduced the discretion of front line workers and public professionals to decide on the organization’s needs and priorities (see Baines, Chapter 12 in this volume), thereby displacing professional knowledge with management priorities focused on the best use of public resources based on deployment of calculative power. (14)

Corporatization as Public-Private Integration

In line with a focus on the economic bottom line and business-like service delivery, corporatization involves the growing influence of private corporations on public decision-making and service delivery. Increasingly, corporate representatives are embedded in public agencies, as advisors, partners, stakeholders, auditors, and independent managers. Research in this area shows how elite networks and their interconnections operate in different spheres of power. For instance, the Canadian Association of University Teachers recently reported that bankers, lawyers, corporate executives, and other players in the business world make up nearly half of the membership of the boards of governors at Canada’s fifteen largest research universities. This network has considerable sway in setting the priorities for research and learning in these institutions. (15) Several authors in this volume look at the position of economic elites and other private sector managers on the boards of public institutions, including Bill Carroll and his colleagues (Chapter 4), who identify ties between carbon capital, universities, and research institutes, and Jamie Brownlee (Chapter 14), who examines Canada’s National Energy Board as a site of regulatory capture.

The nature of the relationship between the public and private sector is an ongoing subject of debate. Some scholars emphasize the tendency of private corporations to colonize the public sector. Following Daniel Guttman and Barry Willner’s classic 1976 study, this conceptualization of corporatization involves the surrender of governmental powers to corporate enterprises. (16) Where public officials previously presided, we now find a corporatocracy composed of private elites who act as a cartel in setting the political agenda. In this sense, as journalist Murray Dobbin notes, [c]orporate influence and control has infiltrated almost every dimension of democratic governance and citizen protection in Canada. (17) Others, including Greg McElligott (see Chapter 8 in this volume), emphasize that the public sector was never fully removed from private sector interests. From Confederation onwards, business interests have had a powerful voice in setting the state’s agenda through membership on government boards and royal commissions. In his work on the nature of the Canadian state, Leo Panitch identified a longtime confraternity of power—an ideological hegemony emanating from both the bourgeoisie and the state cultivating the view that the national interest and the business interests are at one. (18) Similarly, H.V. Nelles has described the prominence in Canada of what he describes as state-enterprise capitalism, with government enterprises run by businessmen, for businessmen, in what was always referred to as a ‘businesslike’ manner. (19)

From this perspective, the Canadian state may be distinct in its relative lack of autonomy from business interests. The question, then, is not so much the degree to which outside business interests have colonized the state, but the kinds of relationships that are generated through the corporatization process. Rather than looking at who is pulling the strings, the focus shifts to the ties that bind these actors together. Here, corporatization can be viewed as a process of state-corporate symbiosis, (20) involving a thickening of ties between private and public agencies. This new relationship is reflected, for example, in the emergence of institutional frameworks for the governance of public-private partnerships, discussed by Heather Whiteside (see Chapter 1 in this volume), and in the development of police foundations, described by Kevin Walby and Randy K. Lippert (see Chapter 7 in this volume). How these new institutional arrangements integrate public and private interests (and seemingly keep them at arm’s length) remains a subject of investigation for corporatization researchers in Canada. For instance, a range of recent research has highlighted the role of private sector auditors, management consultants, and competitiveness experts in generating a common global language through which business and political leaders could discuss how public policy influenced corporate and entrepreneurial performance, and a measurement framework through which all public policy, public investment and executive political decision making could be subjected to a blanket economic audit. (21) Private sector actors have become entrenched as intermediaries across policy networks (see Hurl, Chapter 11 in this volume).

Public-private partnerships (P3s) are a key form of symbiotic corporatization that brings together public and private sector actors. There are over 200 infrastructure P3s operating across Canada today, including in areas such as water, health care, transportation, and prisons. Many researchers have been critical of P3 expansion, concluding that these arrangements are something of a Trojan Horse in infrastructure development that allow the insertion of market forces and the profit motive in the provision of public goods and services. (22) Although P3s are often touted as lowering risks and costs to the public, they are also associated with cost overruns, higher bills and user fees, layoffs, reductions in service quality, and even threats to public health. In 2016, a poll conducted for the Ontario Public Service Employees Union found that public support for public-private partnerships had dropped from 70 percent to 25 percent following a 2014 auditor general’s report showing that P3s had resulted in $8 billion in extra costs for the province. (23) Most Ontarians (71 percent) also said that P3s give up too much control to corporations and that investors have too much say in how public money is spent.

While the three processes introduced here—corporatization as arm’s length administration, as expanding managerial control and business-like organization, and as public-private integration—are consistent themes throughout this volume, we also recognize that corporatization is not a homogenous process. It takes different forms depending on the institutional setting, with these processes emerging and combining in different ways. In some cases, corporatization involves a greater degree of professional autonomy in generating priorities and making decisions, while in others there will be little distance from private sector business interests. Moreover, how boundaries are negotiated between the public and private is variable. While private companies may directly provide input on public priorities through sitting on the boards of public agencies, their involvement may also be managed through arm’s length contractual arrangements. How these processes have evolved also depends on historical factors. While some services—such as hydroelectricity—have been corporatized for a long time, the development of arm’s length structures are more recent in other areas. Moreover, the claim that public agencies stand apart from the formal realm of politics is always open to contestation, as citizens, public professionals, labour unions, and community groups continue to challenge the various manifestations of corporatization.

The Public-Private Divide: Neoliberal Corporatization as a Deeply Political Process

Corporatization, especially its neoliberal varieties that are the focus of this volume, is an ideological and deeply political process, one that raises critical questions about the nature and meaning of public ownership in Canada. Corporatization is not the same as privatization, although the terms are often used interchangeably. Privatization involves transferring ownership from the public to the private sector, whereas neoliberal corporatization is generally associated with public sector organizations integrating with, or becoming more like, private firms.

As opposition to neoliberalism continues to grow around the world, many citizens and even governments are turning against privatization. Today, privatized public services in many domains—including water, energy, transportation, housing, health care, and waste management—are reverting to public hands through processes such as re-municipalization. (24) With this opposition to privatization mounting, corporatized public entities are being viewed as the preferred vehicle for transforming the public sector. Corporatization is presented as a way to enhance corporate profits and maintain economic growth—or to achieve the same goals of privatization without the political and economic risks associated with it. Public-private partnerships, for example, are sold on notions of transparency and efficiency, but also on progressive principles like co-operation and teamwork. This type of framing confers legitimacy and helps politicians and policy-makers avoid the pitfalls of privatization and outsourcing (though the results may be just as damaging from a public interest perspective). The introduction of market mechanisms (e.g., cost-reflexive pricing) into services that are still in public hands can also spare corporations the anger of consumers once they are privatized. In some cases, corporatized public agencies will even celebrate their ‘public’ status at home while aggressively seeking for-profit contracts outside of their jurisdictions. (25) Manitoba Hydro, for example, has a contract to privatize the electricity transmission network in Nigeria while it fights off privatization attempts at home by citing the merits of public control.

Although corporatization is often viewed as a less offensive alternative to privatization, it can be just as commercially oriented as outright privatization (e.g., cutting off services to poor households and institutionalizing moral codes of conduct around the responsibility to pay for market-oriented services). Moreover, its intent is sometimes to act as precursor to future privatization. All of this suggests that corporatized institutions may be public in name only, functioning as little more than a ploy to commodify and commercialize service delivery while deceiving the public into believing that the threats of privatization have been averted. In this way, corporatization is the proverbial wolf in sheep’s clothing, offering a façade of public ownership while propagating market ideology and advancing capital accumulation. (26)

Another way that neoliberal corporatization has been taken up as a political and ideological project involves its claimed advantages in public sector management. Neoliberal ideology suggests that governments are irrational and inefficient institutions that should be limited and downgraded so as not to interfere with market principles. Market-based instruments are said to reduce costs through competitive pressures and be inherently responsive to consumer demand. Unlike politicized public agencies, only the private sector is—or can be—responsive and accountable to the public. Yet, evidence suggests that private providers of public services are no more efficient than public ones. (27) There is also little evidence that privatization leads to better quality or more cost-effective services, especially for essential services like health care and utilities. (28) The same is true of the supposed efficiencies associated with corporatized entities that remain public. Neoliberal corporatization may (or may not) be efficient according to a narrow set of finance-oriented criteria, but there are often huge ancillary costs, including less equitable forms of service delivery, precarious work environments, lack of affordability, and a decline in universal coverage and provision. These points are not lost on our authors, many of whom take aim at the political and ideological underpinnings of neoliberal corporatization.

At the same time, the purpose of this volume is not to pit defenders of traditional state management against advocates of corporatized, market, or private sector management models. The Canadian state has always used practices that serve and emulate business, and has routinely worked to restrict the influence of organized labour and the public in decision-making. But unlike private corporations (and, increasingly, corporatized public agencies), Canada’s public sector remains at least partially accountable to the general population. Indeed, one of the reasons why proponents of corporatization want to weaken the public or popular aspects of government is to reduce the threat of popular involvement in decision-making, and turn those decisions over to corporations and corporatized state agencies far removed from public control.

The primary goal of this volume is to demonstrate how the process of neoliberal corporatization is detrimental from a public interest perspective. As our authors show, corporatization has made labour and working conditions in the public and non-governmental sectors more precarious. Corporatization has made public planning and the provision of public services less democratic and less equitable, and has reduced the accountability of governments and the capacity of the population to influence decision-making through formal democratic channels. It has transformed public programs into assets managed as if they were corporate revenue streams. Above all, neoliberal corporatization in Canada has elevated financial and corporate interests ahead of the public, collective good, and social justice.

Volume Outline

This volume is divided into six sections, each one focusing on a different area of service delivery. The first section focuses on the corporatization of health care, which has been an epicentre for corporatized institutional arrangements for the past thirty years. A central component of these new arrangements is public-private partnerships. In her chapter, Heather Whiteside examines the institutional architecture of public-private partnerships and how they have changed the ways that health care in Canada is delivered. Natalie Mehra of the Ontario Health Coalition puts this process in a broader historical perspective. Looking at Ontario, she explores how corporate business models, arm’s length management practices, and public-private ownership structures have emerged in the health sector over the past three decades.

The second section examines the corporatization of education. While the focus of this literature is often on higher education, Erika Shaker explores how corporations can also be found setting primary- and secondary-level public education curriculums and educational priorities. Larry Kuehn highlights the growing market for international students as a catalyst for corporatization and the shifting priorities of schools and school boards at all levels of education. In the realm of higher learning, Bill Carroll, Nicolas Graham, and Zoë Yunker examine the growing network of interlocks that link the directorates of fossil fuel companies with the governance boards of universities and research institutes, and discuss the implications for higher education in the context of climate change and carbon divestment. Lastly, Claire Polster discusses resistance to corporatization that can build from a fundamentally different understanding of public institutions, one that focuses on social relations within the university.

The third section explores the corporatization of criminal justice, including the police, courts, and prisons. While the police position themselves as an ostensibly public organization, Kevin Walby and Randy K. Lippert highlight the emergence of police foundations as private arm’s length fundraising instruments for police departments. Likewise, Kelly Gorkoff looks at corporatized forms of justice with the development of networked and arm’s length administrative arrangements in drug treatment courts. In his discussion of the public-private relationships that have developed in prisons and prison construction, Greg McElligott argues that there has always been a tight relationship between public agencies and private developers. According to McElligott, corporatization has not changed the character of the Canadian state, even if it has further insulated it from true democratic control.

The fourth section investigates the corporatization of policy-making and assesses the extent to which policy-making in Canada is modeled after decision-making practices in the private sector. Peter Graefe explores how corporatization has taken a distinctive form in Canada based on the changing federal-provincial negotiation of jurisdiction, while Chris Hurl examines how private sector actors are embedded in the municipal policy-making process through new forms of auditing and evaluation.

The fifth section focuses on the corporatization of social services in the non-profit sector and civil society. Donna Baines highlights the impact of corporatized institutional arrangements on front line workers in Canada’s non-profit social services sector, and Graham Riches looks at how food charities in Canada are increasingly organized according to corporate models. Riches asserts that the corporatization of charitable food banking is threatening aspects of Canadian welfare state provision, such as income security and a publicly funded social safety net.

The sixth section examines the corporatization of public utilities and resource governance in Canada. Jamie Brownlee discusses the degree to which private sector models and actors have shaped the policies and structure of the National Energy Board, and how industry has effectively captured the agency. Emma Lui discusses the corporatization of water management, which is increasingly organized according to market-based principles aimed at maximizing revenues and minimizing costs. Finally, David McDonald concludes by discussing the prospects for corporatization more broadly through a comparison of Canada with other parts of the world. As McDonald argues, there is nothing inherently neoliberal about the corporatization process, especially in the area of public utilities. He emphasizes the multiple ways in which policy-makers, managers, and employees of corporatized entities can shape more progressive narratives of public sector reform, and maintain commitments to universality and equity.

Looking Ahead

Given the scope of corporatization in Canada, this volume is just scratching the surface of the areas that need to be investigated. There is a range of fields that remains unexplored, including transit and waste management, paramedical services and the pharmaceutical industry, new green forms of energy such as wind and solar power, postal services, airports, sports, marijuana, child and elderly care, and recreation infrastructure. We hope that by beginning a conversation on corporatization through a comparative analysis of service areas, we can contribute to the development of a comprehensive assessment of how corporatization is operating in Canada, and to strategies for resisting corporatization where it entrenches domination and inequality.

Health Care

1

Healthy Profit

Private Finance and Public Hospitals

Heather Whiteside

Introduction

Over the past decade, ninety for-profit public-private partnerships (P3s) have been launched to design, build, finance, and operate hospitals within the Canadian public health care system. Over half of Canada’s provinces and territories have become P3 enthusiasts: Ontario, British Columbia, Quebec, New Brunswick, Nova Scotia, Saskatchewan, Alberta, and Northwest Territories. P3s are present in nearly all public sectors and jurisdictions across Canada, but health care has been particularly targeted. Better, faster, cheaper is the motto underpinning P3 use both here and abroad, but their empirical record on all fronts has proven dismal. (1) Healthy returns on investment of at least 10 percent contrast with pro forma building designs, rampant delays, and repayment burdens added to the public purse through profit seeking and higher-priced debt. P3s are at best insurance policies against risk, with project elements shifted to corporate actors, but all costs are fully paid for by the public in the end. Along the way, corporate management and the profit motive become entrenched within sensitive areas like public health care.

This chapter uncovers and analyzes the corporate entities involved in making a healthy profit off Canadian health care. It examines how public hospitals are being corporatized through P3s’ indirect encouragement of business-like practices in the public sector, and the direct involvement of corporate/private partners like equity-holding construction and engineering firms, private service providers, and creditors ranging from Wall Street investment banks, to pension funds, to offshore tax-haven registered companies. The chapter also details how the corporatization of public hospitals affects hospital staff, planning and service delivery, and the Canadian health care system more broadly.

Corporatization and the Canadian Health Care System

Corporatization and privatization are distinct, but often interrelated, processes. As Jamie Brownlee argues, whereas privatization involves the act or process of transferring ownership from the public to the private sector, corporatization involves the integration of public and corporate institutions and the adoption of business-like practices within the public sector. (2) P3s cover all bases: transferring control from public to private hands, institutional integration of the corporate and public sectors, and the re-orientation of public sector decision-making along corporate lines.

P3s are most often structured as lease agreements, where the state retains formal ownership of the newly created asset (like a hospital). Given that these are multi-decade leases, and that leases transfer rights, control, and decision-making, private partners become de facto owners for thirty-plus years. The corporate profit motive permeates all aspects of P3 projects and market social relations are expanded throughout their lifetime. P3s are deep partnerships involving the institutional integration of corporations and governments, making them distinct from more limited forms of alternative service delivery (such as contracting out) because private partner decision-making is far wider in scope and duration. P3-induced restructuring intensifies the dependence of the public sector on the market by awarding authority and decision-making power over the