Marystown municipal workers to take strike vote May 4

creynolds News Release, Uncategorized

The members of CUPE Local 1896, Marystown municipal workers, will take a strike vote on Thursday, May 4, to send a message asking town council to return to the bargaining table to negotiate a fair contract. Members were upset to learn that their wages were negotiated in council chambers without the union’s bargaining team present, late last year.

After serving notice to bargain in September 2016, the union finally had the opportunity to begin negotiations with the employer in January 2017.

CUPE Local 1896 President Stacey Mallay says, “We wonder if the employer’s low wage offer, in the first year of the contract, is related to the amount of money spent on investigations into internal conflicts that recently occurred within council.”

“The members want a fair deal that’s negotiated at the bargaining table – not in council chambers,” says Ed White, CUPE National Representative.

CUPE Local 1896 represents approximately 20 members who work in positions including clerical staff, heavy equipment operators, mechanics, labourers and water treatment plant operators.

10 problems with P3s

creynolds Own Your NL, Privatization

Across Canada, some governments are promoting privatizing public infrastructure and services through public-private partnerships, also known as P3s.

In a P3 deal, private corporations make a profit from financing, operating and/or maintaining public infrastructure projects. Municipal or provincial governments, school boards or health authorities sign contracts with private corporations to design, build, operate and sometimes finance infrastructure and deliver services that were once public. These contracts can last 30 years or longer.

Until recently, Newfoundland and Labrador has proudly been a P3-free zone. Working with our allies, CUPE helped stop the St. John’s harbour cleanup from being privatized through a P3. And we’ve kept many other vital services public, because we know they keep our province strong.

P3s are privatization, pure and simple. There are many reasons public works best to build and maintain long-term care facilities, hospitals, water and wastewater treatment facilities, schools, transit systems, roads, bridges and other vital assets.

Here are 10: 

  1. P3s cost the public more

Private, for-profit corporations get involved with P3s to make a profit for their shareholders. Those profits are made charging more for the project (including financing costs), and/or from cutting the operating costs. Lawyer and consultant fees add even more to the P3 price tag.

In 2014, Ontario’s auditor general reviewed 74 P3 projects and found they cost $8 billion more than if they had been publicly financed and operated – that’s 30 per cent more than public projects would have cost, or about $1,600 per Ontario household. Fully $6.5 billion was due to higher costs of private borrowing.

Governments and other public sector bodies can borrow money to build infrastructure much more cheaply than the private sector. P3s are like using a credit card instead of a low-cost mortgage to build public facilities.

  1. The public still shoulders the risk

Even advocates of P3s admit they cost more than publicly-delivered projects. To sell the deals, advocates have developed complicated arguments and questionable calculations about risk transfer and efficiency to gloss over the fact their costs are higher.

P3 contracts include hefty additional charges for any risk that is transferred from the public to the private sector. Even then, private corporations can seek bankruptcy protection and walk away from contractual commitments. When this happens, governments must scramble to maintain public services, and taxpayers are stuck with the higher costs of private sector operation.

Provincial auditors general have found that the way government agencies promoting privatization analyze P3 projects is biased, and does not take into account the higher cost of private financing. In Ontario, the auditor found no evidence to back claims P3 projects shifted risk to corporations.

  1. P3s hurt workers

P3 contracts often involve outsourcing good public sector jobs to for-profit operators. This can involve all jobs or some types of jobs such as cleaning, maintenance or food preparation. Ultimately, the for-profit operator seeks to maximize profits by cutting corners and doing more work with fewer staff. Furthermore, the tight budgets that come with higher-cost P3s can also lead to deteriorating wages and working conditions. Finally, there are no guarantees that jobs will be protected over the life of a P3, even if there are initial promises of job security. As one example, nearly 400 jobs have been cut since the North Bay P3 hospital opened in 2011.

  1. P3s operate in secrecy

Privatization means details about financing and operations are hidden from the public. P3 contracts involve lengthy and complex negotiations behind closed doors. Unlike governments, private corporations are not subject to the Freedom of Information Act. This means residents don’t have access to information about the environmental and economic actions of companies. Most so-called ‘Value for Money’ reports about P3s edit out important financial information about how that value was calculated. This means we can’t accurately assess the true costs of privatization.

  1. We lose public control and accountability

Private corporations answer to shareholders – not residents and elected officials. The mandate of shareholders is to ensure profitable and growing businesses. Our governments answer to the public. At best, P3s blur the lines of accountability and responsibility. Basic public services like health care, water and wastewater treatment should respond to the priorities of the people that rely on them, not the profit motives of shareholders.

  1. Multi-decade contracts limit flexibility and responsiveness

P3 contracts lock local governments into multi-decade deals with private companies. As technology improves and community needs change, P3 contracts tie the hands of municipalities, provincial governments, or school boards that want to adapt and evolve. Changes can only be made after re-opening contracts, and come at a high price. With trade deals like CETA coming into force, governments will find it difficult or impossible to end a P3 when it goes bad.

  1. Local businesses lose out to large corporations

Governments have always relied on private, home-grown, companies to design and build public infrastructure. P3 contracts price small and medium-sized companies out of the game. Only large corporations can provide the up-front financial backing the deals demand, and engage in complex P3 negotiations. This means local design and construction firms can’t bid on projects. It also means, in the long term, that many decisions about local services are being made in corporate head offices, not in communities.

  1. Money and jobs leave the community

Public services offer local residents good jobs in the community. These jobs provide opportunities to train and enhance the skills and experience of residents, and in turn strengthen the area’s resiliency. This is crucial in tough economic times. And projects in the hands of local governments rely on local private sector firms and expertise to design and build public infrastructure. P3s rely on external investment and expertise and often source materials from outside the community. Money that could be returned to the local economy and tax base goes elsewhere.

The ‘discipline’ of public-private partnerships is an illusion. P3 projects can claim to be “on time and on budget” only because the completion date gets set after the lengthy lead time – usually years – it takes to reach the contract stage for P3s. Budget goalposts shift to meet whatever the contract costs.

  1. P3s download costs to future generations

Governments tout the short-term financial benefits of P3s, but P3s are not a short-term project. We all end up paying for P3s down the road. Future generations that had no say in the decisions end up locked into paying the extra costs decades into the future, leaving less money for public services and other community priorities.

What provincial auditors have said about P3s – Fact Sheet

creynolds Fact Sheet, Own Your NL, Privatization

Over the years, provincial auditors across the country have questioned the financial rationale for using public-private partnerships (P3s) to build public infrastructure.

Provincial auditors are independent officers of legislative assemblies who review government finances and decision-making to ensure public funds are spent in an efficient and accountable manner.

A number of P3s have now been reviewed by provincial and federal auditors and the verdict is bad.

Auditors have found that P3s cost more than traditional public projects, use questionable methodology, lack accountability and do not transfer risk to the private sector.

Ontario

In her 2014 Report, Ontario’s Auditor General reviewed 74 P3 projects and concluded that they cost the province $8 billion more than if they had been procured publicly. The majority of this— $6.5 billion—was due to higher private-sector financing costs. She also questioned the main justification for using P3s–the assertion that they transferred risk to the private sector. The P3 projects used unrealistically high risk transfer, averaging about 50% of the capital costs.

The Auditor General concluded that “there is no empirical data supporting the key assumptions used by Infrastructure Ontario to assign costs to specific risks.”

In her follow-up audit of the P3 projects, the Auditor General noted that little to no progress had been made on a number of audit recommendations. Further work was required on:

  • Having adequate data to support the calculations of risk transferred to the private sector, and
  • Ensuring the risks that are supposed to be transferred to the private sector actually are.

The Auditor General also highlighted the $36.6 billion in long-term P3 liabilities and commitments that the present and future governments will face.

In 2008, Ontario’s previous auditor general determined that the William Osler Centre, a P3 hospital in Brampton, could have been built for $200 million less through traditional public financing. He also found that the cost of the public option was overstated by more than $600 million and that there was a high cost for advisors and consultants ($34 million).

British Columbia

In 2014, the Auditor General of British Columbia raised major concerns about the high cost of debt through P3 projects. She examined 16 different P3 projects in the province and found the government was paying nearly twice as much for borrowing through P3s as it would have if it had borrowed the money itself.

An earlier 2011 review of the Vancouver General Hospital Academic Ambulatory Care Centre (AACC), known as the Gordon and Leslie Diamond Health Centre, identified the higher cost of private financing, probed the transfer of risk to the private sector and questioned whether P3s were in reality on time and on budget.

Quebec

In 2010, the provincial auditor of Quebec found that the McGill University Health Care Centre (MUHC) P3 cost more than the public option, and that the analysis used to compare the P3 model to a conventional public model was extremely faulty. Instead of the P3 model saving $33 million, the provincial auditor found that the public model would have saved $10 million. The auditor’s special report to the National Assembly also found that there was a cost overrun of more than $108 million, on top of the original price tag of $5.2 billion.

Not only that, a number of the key people involved in the McGill University hospital P3, such as Arthur Porter and the former CEO of SNC Lavalin, have been charged with corruption associated with this project.

Recently two researchers from Montreal calculated that the government of Quebec would save up to $4 billion if it bought back the two super hospitals from the P3 consortium.

Nova Scotia

In 2010, the Auditor General of Nova Scotia reported on his review of 39 P3 schools in that province. He cited numerous and significant problems with the administration of contracts, notably the absence of a child abuse registry and criminal records checks of sub-contractors. Many of the P3 companies subcontracted work to other companies without ensuring adequate safety checks.

The auditor concluded that “[t]he terms of service contracts are not adequate to ensure public interest is protected…The lack of these significant contract terms impairs the Department’s ability to hold the developers accountable and effectively manage the contracts.”

He also noted that risk was transferred back to government and developers were being paid twice for the service, resulting in a deficit for any local school board.

New Brunswick

In her 2012 report, the New Brunswick Auditor General found significant problems with the decision to build two P3 schools in Moncton and Rexton. She pointed to deficiencies in the value for money analysis used and reported that the decision to use a P3 had been made without any rationale. In fact, she found that the government spent $1.7 million more with a P3 than it would have using public procurement.

Problems were also found through an earlier 1998 audit of Evergreen P3 School and Wackenhut’s Miramichi Youth Facility.

The Department of Finance had claimed that the P3s would provide seven to 15 per cent savings on the design and construction, that capital financing to the private partner was very close to the government’s long term borrowing rate, and that major capital repair and replacement risk would be eliminated. None of these claims proved true.

The Auditor General concluded that the capital cost of the Evergreen School would have been $774,576 less had the province done the work itself and that the Youth Facility cost the Province $700,000 more because of higher financing costs through the private corporation Wackenhut.

Canada

In 1995, the Auditor General of Canada reviewed the Confederation Bridge P3 project, which is often listed as a success story by P3 proponents. The Auditor General had major concerns with the “complex financing” of the project and concluded that the bridge cost $45 million more than if the government had directly borrowed the money.

Saskatchewan

In a 2015 review of SaskBuilds, the provincial Crown corporation responsible for P3s, the Auditor General of Saskatchewan found that the corporation had valued the risk of public procurement to be six times higher than if it had used P3s. The Auditor General noted that benefits attributed to P3s could also occur in public sector procurement and urged the government to gain efficiencies under traditional procurement.

In 2010, the Ministry of Health signed a Memorandum of Understanding with Amicus Health Care Incorporated to build a 100-bed long term care facility in Saskatoon, without prior agreement from the health region. Although neither the government nor the provincial auditor called this arrangement a P3, it was by all definitions a P3: Amicus financed 100% of the capital costs and receives monthly capital and operating lease payments from the province over seven years.

The Provincial Auditor criticized the absence of a cost benefit analysis:

The proposed daily capital rate is higher than other affiliates [nursing homes] because of Amicus borrowing 100% of the capital required for construction. We were unable to obtain the basis for calculating this rate for Amicus. As well, neither the [Ministry of] Health nor Saskatoon [Health Region] could provide us any written analysis to support that funding long-term beds in this new way is cost effective for the Province.

The Auditor also noted that once the construction was completed, the Saskatoon Health Region “assumes the risk over debt repayment and the operation of the new facility.”

Dr. John Loxley also reviewed what little information was disclosed about the Amicus deal and concluded that private financing would cost $11 to $20 million more than if the province had built the facility.

CUPE Research – April 2017

 

Town hall meeting to discuss financing of new Corner Brook health care facilities

creynolds News Release, Uncategorized

The Ball Government is about to build two health care facilities in Corner Brook using public-private partnerships (P3s), even though auditor generals, researchers and journalists across Canada continue to report on P3 failures and the waste of taxpayers’ money.

Will these P3 deals be accountable, locally-controlled or a wise investment of tax dollars? Why would any provincial government rely on P3s with higher-cost private financing?

Let’s talk about it. Please join us on Monday evening for a public town hall.

WHAT: Town hall meeting to discuss financing of new health care facilities. The event, hosted by CUPE Newfoundland Labrador, will include a presentation followed by questions and answers.

WHO: Special presentation by guest speaker Natalie Mehra, executive director of the Ontario Health Coalition; as well as Mark Hancock, CUPE national president.

WHERE: Greenwood Inn & Suites, 48 West Street, Corner Brook. See Google map.

WHEN: Monday, May 1, from 7 to 9 p.m.

Some of the issues with P3s that will be discussed include: higher-cost private financing that can double the cost of infrastructure projects; higher user fees and increased access to services; as well as “off book debts” now that will mean less available funding in future years.

Follow Saskatchewan lead – restore all funding and save libraries: CUPE

creynolds Crossroads, News Release

On Monday April 24, Saskatchewan Education Minister Don Morgan announced that the provincial government would be completely restoring the $4.8 million in funding cuts to Saskatchewan’s libraries.

Don Morgan was quoted by CBC as saying, “We’ve heard from people pretty clearly that they value the library in its present form. It’s important for them not just to have the electronic capability, but they also want to have the physical space to go to.” Morgan also told reporters, “As I’ve indicated earlier, we’re not afraid to admit we made a mistake on something.”

CUPE is calling on Premier Ball and Minister Bennet to follow the lead of the Saskatchewan Provincial Government and admit that the funding reduction and closure of 54 libraries as a result of the 2016 budget was also a mistake, immediately restore funding to the province’s libraries and reinvest in the library system for the people of Newfoundland and Labrador.

The Ball government announced on April 27, 2016 that over half of the province’s libraries would be closing. On June 30, 2016, the decision was suspended and review of the library system by Ernst and Young was announced.

CUPE Local 2329 President Dawn Lahey says, “This provincial government has also heard loudly and clearly from the people of Newfoundland and Labrador that our libraries are valued; indeed, they are cherished. Newfoundlanders and Labradorians deserve a vibrant library system which meets their needs. They deserve to at least maintain their current level of service.”

President of CUPE Newfoundland and Labrador Wayne Lucas says, “I cannot believe that this government has still not dealt with this issue, so many months after the cuts were announced. It is clear what the people have said, and it is high time that the Ball Government stand up and admit that they, too, made a mistake.”

Members of CUPE Local 2329 have been waiting since April 2016 to find out whether they will continue to have a job. Lahey also says, “It is high time that these women are told what is going to become of their employment. It has been extremely difficult to have this axe hanging over their heads for all this time; they deserve to know that the Government is going to listen to the people of Newfoundland and Labrador and commit to our cherished library system.”

Dwight Ball’s Crossroads – A game of budgets and cuts for Newfoundland and Labrador

creynolds Collective Bargaining, News Release

A new ad campaign by public service workers in Newfoundland and Labrador will be shown on TV screens across the province beginning today. CUPE’s public services workers launched the ad to voice their concerns about the Ball Government’s strategy for job growth (or lack thereof) and threats the Province is making to freeze wages and slash benefits.

Watch the television ad during NTV Evening News, NTV First Edition, as well as CBC News at 6 and 6:30 p.m. You can also watch it on our website at nl.cupe.ca/crossroads.

In the provincial budget released on April 6, the Minister of Finance announced that, “Our government will propose legislative changes to implement a wage freeze for management and all non-union employees for the current fiscal year. This includes core government and agencies, boards and commissions.”

The threat of job layoffs and a wage freeze for public service workers, both unionized and non-unionized, is causing undue stress on families and communities.

With inflation currently at 4.1% and the average income in the province of approximately $53,000, a wage freeze could cost workers almost $2,200 per year. Collective agreements with the province typically cover a four-year period.

These attacks come at a time when the provincial unemployment rate is expected to increase from 13% to 17% over the next three years, according to the Conference Board of Canada.

Families in Newfoundland and Labrador are already struggling to make ends meet. Layoffs, wage freezes, cuts to public services, and attacks on unions are only making things worse. During a time of economic downturn, lower and middle income families need public services more than ever.

“All economic indicators are still pointing to challenging times for Newfoundlanders and Labradorians in terms of job certainty, the unemployment crisis, being able to pay the bills, quality of life, and the security needed to build a future here,” says CUPE NL President Wayne Lucas.

CUPE believes the Ball Government should recognize the public sector as a driver of economic growth. There are steps the Province can take in the collective bargaining process, and in future budgets, that put people first, protect the public services we need, create good jobs and a stronger economy.

Tell the Ball Government to protect the good jobs and wages we need to stabilize our economy.

Life is not a game for people in Newfoundland and Labrador.

New position created by library board while frontline workers face potential job layoffs

creynolds Collective Bargaining, News Release

The executive of CUPE Local 2329 are outraged that, one day after the release of the provincial budget, the Provincial Information and Library Resources Board (PILRB) has created a new, non-union position in the St. John’s libraries system, while the future of public libraries remains uncertain.

Yesterday, Minister of Finance Cathy Bennett announced that the operating grant was restored to the PILRB until the province completes their review of the provincial public libraries.

“At a time when our entire library system is hanging in the balance, waiting for the results of the review, this seems like a slap in the face to the bargaining unit members who may lose their jobs at the end of the process,” says Dawn Lahey, president of CUPE 2329.

“This money could be better used to improve library services to the public, not to create another behind-the-scenes position that will do nothing to maintain library services in our communities,” says Lahey.​

Posted by the Board on April 7, 2017, the new position is for a Librarian IIB, working at the A.C. Hunter, Marjorie Mews, Michael Donovan libraries in the St. John’s region.

According to the posting, the position will be responsible for implementing policies and procedures; aiding in staff selection, mentoring and training; promotion of library materials, programs and services; community outreach and other duties – already performed by librarians currently on staff.

Frontline library workers, members of CUPE 2329, would like answers from the Minister of Finance and the library board.

CUPE represents library workers across the province, including those who work at the 54 libraries facing threats of closure. If the closures go ahead, 61 members of CUPE 2329 will lose their jobs.

Future of public libraries remains uncertain

creynolds Economy, News Release

No hope was offered to public library workers in the provincial budget announced today by Newfoundland and Labrador Finance Minister Cathy Bennett. Workers anticipated a definitive answer on what the province intends to do with the 54 libraries slated to be closed – or if they will continue to have a job. Those questions remain unanswered.

CUPE has been calling on the province to reverse the decision to close 54 of the province’s 95 public libraries and restore funding at least to 2011 levels.

In the 2017 budget, the operating grant was restored to the Provincial Information and Library Resources Board, bringing the funding level to $10.7 million, however this is a temporary measure and less than 2011 levels.

“Why does the province want to delay their decision at all?” asks Dawn Learning, CUPE national representative. “The people in these communities have clearly spoken about what they need. They want to keep their public libraries.”

“The new budget doesn’t do anything it should do to stabilize the economy,” says Wayne Lucas, CUPE NL president. “And it does not address any of the damage done by last year’s budget.”

“All economic indicators are still pointing to challenging times for Newfoundlanders and Labradorians in terms of job certainty, the unemployment crisis, being able to pay the bills, quality of life, and the security needed to build a future here.”

Submission to the NL Minister of Finance Pre-Budget Consultation

creynolds Article, Economy, issues

In the Pre-Budget Discussion Guide, the Minister of Finance asks submissions to focus on aspects of the government’s economic plan outlined in The Way Forward.

CUPE Newfoundland Labrador, along with the Common Front NL, has communicated strong opposition to the economic direction government is currently pursuing.

CUPE has made clear in meetings with the Minister of Finance and in various briefs and submissions that a recession is not the time to be focused on balancing the budget and cutting jobs. Government has options to raise revenues to both address the deficit in a reasonable timeframe and invest to stimulate economic growth in the short term. To reiterate, public services deliver terrific value to families and communities as well as stimulus to local economies.

Furthermore, CUPE Newfoundland Labrador urges the Minister of Finance to change policy direction on two important public services: the slated closures of provincial public libraries and use of the P3 model for the acute care hospital and long term care facility in Corner Brook.

PROVINCIAL PUBLIC LIBRARIES

The proposed closing of 54 of the province’s 95 libraries (57%) represents a serious loss of value to the communities affected and to the economy of Newfoundland Labrador. If these closures go ahead, more than 60 members of CUPE Local 2329 will lose their jobs. The majority of those who will find themselves out of work are women who work part-time in rural communities.

CUPE is disappointed that neither the Minister of Education and Early Childhood Development Dale Kirby nor the Provincial Information and Library Resources Board (PILRB) have responded to CUPE’s requests to meet on this issue.

CUPE is calling on the Minister of Education and Early Childhood Development to release the report from the financial and consulting accountancy firm EY who were contracted to review the library system and hold public consultations. The EY report should be released prior to the tabling of the provincial budget this spring.

Funding for provincial libraries have already been significantly reduced over the last few years and this has had profound impacts on library services in the province. Insufficient capital and materials budgets have affected the acquisition of new publications and the maintenance and/or replacement of existing equipment. Technical support for the entire system has been slashed, with a staff of eight – already a skeleton crew when it comes to serving 95 locations – cut down to five, making it even harder to meet demand. Over seventeen full-time equivalent staff positions have been eliminated, and the budget for substitute staff has been cut. Now 77 libraries in the system operate with only one staff person. One library in the system has already been forced to close.

Despite operating with limited resources, public libraries in Newfoundland Labrador are highly utilized. In 2014-2015, the public library in Harbour Grace – slated to close under the PILRB proposal – reported a circulation rate of 169% relative to its population (including online circulation and inter-library loans).

The library in Centreville – also slated to close – recorded a per-capita circulation rate of 420%. Internet services are equally compelling.

Brigus, a small community of 794, reported 3539 computer and Wi- Fi sessions in 2014-2015 and 2710 sessions in 2015-2016, a per-capita rate of 446% and 341%, respectively.

There is no indication that the “regional library model” will be able to supplement, improve, or replace the current system’s ability to meet both circulation and information service demands.

The important role of public libraries is clearly evident in Newfoundland Labrador. The province’s own data indicates a heavy reliance on the library system for computer access and Wi-Fi access. Event calendars show a wide variety of programming. For example, the following programs are currently being offered at libraries that are slated for closure (despite being already under-resourced):

  • Cow Head Public Library – The Art of Darning (skill), Preschool Reading Circle (literacy)
  • Stephenville Crossing Public Library – Babysitting Course (skill, childcare), Halloween Storytime (literacy)
  • Fogo Island Public Library – Burlap Wreath Making (craft), Coffee and Canvas (art)
  • Change Islands Public Library – Library Home Services (book delivery to seniors, social support)
  • Bay St. George South Public Library – Computer Training (skill), Story Time (literacy)
  • Harry’s Harbour Public Library – Craft Night (craft)
  • Norris Arm Public Library – Computer Training (skill), Talking Books (literacy), Story Time (literacy)

Beyond programming, Newfoundland Labrador libraries support community cultural programs, such as the Writers at Woody Point Festival, and provide links to community heritage, such as in Trepassy and other communities on the Irish Loop.

The PILRB has offered no satisfactory plan for how these important services and linkages will be maintained. While the proposed cuts may save a marginal sum of money, the loss of the “connecting layer of society” in many of these communities is not worth the savings. But even if this important role is discounted and libraries are evaluated in narrow economic terms, they show themselves a smart and highly productive investment, as explained below.

In the current political and economic climate, public libraries must often seek to justify their existence to policy-makers, communities, and stakeholders. Given the range of services that libraries provide, and the roles that they can play in communities and for their patrons, it can be difficult to quantify the value that libraries represent in simple dollar figures.

Like other educational institutions, libraries offer intangible value that is experiential, often expressed via concepts such as learning, knowledge, experience, and practice. Like other social institutions that provide intangible value, libraries are often among the first public institutions to face the consequences of an economic crunch. It is no longer sufficient, therefore, to presume a consensus on a public library’s value as a public good. Rather, library value is often “seen through the lens of a business model,” where patrons are clients who seek a return on investment.

CUPE recommends that the provincial government reverse the decision to close 54 of the province’s 95 public libraries, and restore funding at least to 2011 levels.

Even using this metric, public libraries are excellent investments that produce measurable economic value multiple times the level of funding they receive from the government. This value in seen many ways, including local economic development, increased property values, and the generation of social capital.

As noted in previous CUPE submissions to the provincial government, the Martin Prosperity Institute at the University of Toronto released a report in 2013 that measured the economic impact of Toronto’s 98 public libraries.The report’s findings included:

  • For every dollar invested in the libraries, Torontonians received $5.63 of return value.
  • On average, each hour that any of the branches were open cost the city $653 but generated $2515 in measurable economic benefit.
  • For library patrons, the value of a (free) library membership was $500 on average per year.

Results of a similar study in Guelph, Ontario, reveal equally compelling data.Using a similar methodology to the Martin Prosperity Institute report in Toronto, the Guelph Public Library calculates its return on investment as $5.33 for every dollar of public investment. The value of a library membership for users was calculated at $673 yearly.

Nearby in London, Ontario, the return value of the London Public Library has been measured at 452%, and it is estimated to generate $102 million in total economic impact on the city. For every dollar invested in the public library, Londoners receive $6.68 in value.There is possibly no other public institution with greater direct and indirect positive economic impact than the public library.

These findings in Canada echo others from around the world.

United Kingdom 

A 2002 study out of Loughborough University found that the public library system in the UK generates 12.6% more value than it costs. This is before taking into account “the intangible benefits provided through its public service and merit features.” The study concludes that the value of the public library is considerable in terms of economic value and in terms of serving as a public good and an institution of social development and cohesion.

United States 

A study of the public library system in Minnesota undertaken in 2011 found that the library has a $4.62 return on investment for every $1 of public tax support it receives. The report also notes that the public library generates secondary value that is not captured in the return on investment metric:

Proximity to the library has value. Users who stop at the library while completing a longer list of errands report “halo” spending at firms and establishments close to the library. Although this spending is not part of an economic impact statement of Minnesota’s public libraries, it is also true that proximity to a library increases spending for those businesses located near the library.

A similar study out of Wisconsin found that the public library produces a return on investment of $4.06 for every dollar of taxpayer investment. The report outlines four ways in which this return is achieved:

  • Jobs generated by non-payroll library expenditures (such as acquisitions)
  • Service employment resulting from direct and indirect library expenditures

The same study noted that beyond the monetary value, public libraries generated positive measurable quality of life impacts, and that the “free access to information and technology” served to “level the playing field for many low-income people.”

Norway 

According to a study of the national library system in Norway, “the value of the Norwegian public libraries decidedly outweighs their costs.” Similar to Newfoundland and Labrador, a high proportion (56%) of Norway’s public libraries are in rural communities with populations less than 5,000. Results of the study show that residents stressed the importance of libraries to local democracy and civic engagement. The report measured a four-fold return on investment (i.e. four NOK return for every one NOK of public money invested).

Approximately 90% of study participants also believed that reallocating library funding to other municipal services was undesirable, even if those other municipal services also were a benefit to their household. The researchers conclude that “using resources on public libraries is worth more in terms of individuals’ welfare than alternative use of resources.”

South Korea 

A recent study in South Korea reviewed the national library system and measured the value produced relative to all public spending, including salaries and benefits, materials purchasing, and operating costs. Return on investment was measured at 366% – 3.66 units return for every one unit of input.

The Korea study also found in its review of the literature that the necessity of justifying the expense of public libraries was increasing in many disparate jurisdictions, and that in all cases the return on investment was positive and significant. A return on investment of 3.66 was consistent with a wide range of other studies using a diverse array of methodologies.

Ironically, it is during times of economic constraint that many library budgets are cut, in a short-sighted attempt to contain extraneous costs. This is counterproductive. A well-funded, robust library system produces value and provides services to patrons that cannot be easily replaced. The public library responds to local needs and can adapt services to meet the demands of patrons.

Library staff know their communities, and are trained to facilitate appropriate and effective service delivery. Public libraries are a wise investment from both an economic and public good perspective.

The contribution of public libraries to the public good is not static.

The more plentiful and stable public library funding is, the more people it can help; the greater number of services, resources, and materials it can provide; the more community partnerships it can create; and the bigger impact it can have on its community. The size of the public good generated by the public library grows with the amount of support given to the library.

Due to their resources and the skills of staff members, public libraries can become centers for social services, emergency response and recovery, e-government, digital literacy and inclusion, job training, and innumerable other contributions to the health of the community, so long as they are provided sufficient support.

The public library is, in short, a public good that can adapt and expand through proportional increases in funding.

CUPE is calling on the Minister of Education and Early Childhood Development to release the report from the financial and consulting accountancy firm EY who were contracted to review the library system and hold public consultations. The EY report should be released prior to the tabling of the provincial budget this spring.

CUPE recommends that the provincial government reverse the decision to close 54 of the province’s 95 public libraries, and restore funding at least to 2011 levels.

 

CORNER BROOK ACUTE CARE HOSPITAL AND LONG TERM CARE FACILITY

CUPE is dismayed by the Premier’s announcements that the much-needed Long Term Care facility and acute care hospital in Corner Brook will be built as public-private partnerships (P3s).

Auditor Generals, researchers and journalists across Canada have documented the problems with P3s also known as Alternative Funding Procurements (AFPs). The list of P3 failures and their unnecessary waste of taxpayers’ money grows, yet here we are in Newfoundland Labrador about to embrace that discredited model.

Below is a short and incomplete list of just five of the Canadian P3 health care facilities that went wrong. They are a warning about why we should not put our health care dollars into the pockets of private companies – companies who may not even be from our province.

CUPE recommends that the provincial government build the acute care hospital and the Long-Term Care Facility in Corner Brook using the traditional public procurement process.

North Bay Regional Hospital – Ontario 

The P3 North Bay Regional Hospital cost at least $160 million more as a P3. The project financing costs are adding millions extra each year, over 50 beds have been closed, and they are on the third round of layoffs with over 100 jobs cut. The hospital has only been open since 2011.

Royal Ottawa Mental Health Centre – Ontario 

The Royal Ottawa Hospital mental health facility opened in November 2006 – smaller than originally planned, and with fewer beds. The final cost of the P3 hospital was $146 million, a cost overrun of $46 million. Economist Hugh Mackenzie analyzed publicly available financial details of the ROH. He concluded that private financing added $88 million to the hospital’s costs.

Montréal’s University Health Centres

In 2014, the Quebec newspaper La Pressereported that Auditor General Renaud Lachance released a review of Montréal’s University Health Centres explaining that the capital cost estimates were at least $1.8 billion over the original $5.2 billion announced for the P3 project.

William Osler Hospital – Ontario 

The William Osler Health Centre in Brampton, Ontario is another example of a P3 gone wrong. In 2008, the Ontario Auditor General found that the building of the P3 facility cost $194 million more (in 2003 dollars) than it would have as a public hospital.20 Local fundraising in Brampton had to increase to more than $230 million from an original $100 million in order to try to cover the difference. In the words of Globe and Mail columnist Andre Picard, “taxpayers got screwed”.

Diamond Health Care Centre, Vancouver General Hospital – British Columbia 

In the case of the P3 Diamond Health Care Centre, the actual nominal cost of a P3 was more than double that of a publicly procured project. In 2009, forensic accountants found that the Diamond Centre in Vancouver’s General Hospital total nominal cost (whole life cost including maintenance) could have been $89 million if it was built publicly. The BC provincial government spent $203 million – or $114 million more – on the hospital as a P3.

Public funding of infrastructure is well known to be the least expensive way to finance major infrastructure projects.

Public-private partnerships tap private investors to finance, design and maintain infrastructure projects. Private investors naturally demand rates of returns that need a profitable revenue stream—which taxpayers pay for through guaranteed annual payments from government.

There’s plenty to be wary of in P3s—higher costs, loss of transparency and accountability of public assets. Keep our long-term care facilities public.

CUPE recommends that the provincial government build the acute care hospital and the Long-Term Care Facility in Corner Brook using the traditional public procurement process. 

CUPE and Government of Newfoundland and Labrador representatives discuss P3 contracts for infrastructure

creynolds issues, News Release, Own Your NL, Privatization

CUPE Newfoundland Labrador President Wayne Lucas and CUPE Senior Economist Toby Sanger met with the Honourable Kathy Bennett, Minister of Finance, and the Honourable Al Hawkins, Minister of Transportation and Works, on March 28 to discuss the dangers of using private-public partnerships (P3s) to build infrastructure.

CUPE firmly believes that P3s are not in the best interest of workers, our families or our communities. On the contrary, we can count on public financing to be accountable, transparent, locally-controlled and a wise investment of tax dollars.

“We’re glad that government has agreed – as a result of resistance by CUPE, other unions and the public – to ensure that workers providing health care services will continue to be public employees and excluded from P3 contracts,” says Lucas. “However, we still don’t have anything in writing that says our members’ jobs and the quality of our public services will be protected.”

At the meeting on Tuesday, CUPE was encouraged that government representatives were receptive to concerns the union expressed about P3s. Both parties agreed there is a need for objective project planning and analysis on infrastructure projects.

The union requested that the department disclose all analysis to the public. Finance and Transportation and Works representatives made a commitment to publicly release the fully detailed business case, with all the appendices and numbers, in the fall when they are ready to award the contract.

Some of the union’s concerns that were discussed include:

  • Higher-cost private finance can double the cost of infrastructure projects.
  • Private finance will likely lead to higher user fees, which will increase inequality.
  • P3 projects involve far higher transaction costs — fees paid to lawyers, financial advisors, accounting firms and other consultants — to develop the deals.
  • Much of this extra money will likely flow out of the province, to large companies and investment funds.

“Private financing comes at a much higher cost, including off book debts, which will ultimately mean that less public funding will be available for public services, or for public infrastructure investments, in future years,” says Sanger.

So why would the Ball Government rely on P3s with higher-cost private financing?

There’s a desire by many politicians to keep borrowing costs off their books, at least in the short term. There is also pressure from the P3 and finance industry which want to gain higher rates of return from investing in public infrastructure or privatized public assets.

“Numerous auditors’ reports have found that P3s cost more, including the Ontario Auditor General who found that public sector financing and delivery for 74 projects would have saved the province $8 billion,” says Sanger. “P3 projects in the UK have resulted in £300 billion in debt (a half trillion Canadian dollars), equivalent to more than $25,000 per family. They also lead to cuts in public health services to pay for the higher financing costs.”

Lucas points out, “During the meeting we were not provided with evidence of any P3 deals throughout the country that were in the best interest of citizens.”

“If Government goes down the risky path of P3 deals, taxpayers in Newfoundland Labrador should be prepared for more debt and less reliable services.”