Lessons from privatization: Toronto should learn the Carillion lesson

Contracting out and privatization is risky, costs more, and reduces the reliability of public services.

Last week, the collapse of Carillion in the UK shook policy-makers and public service providers. Carillion is one of the largest privatization companies in the world, responsible for delivering essential public services ranging from highway clearing and maintenance to delivering school lunches. It has also been involved in major road-building, hospital, and other public infrastructure projects. Its implosion put 43,000 jobs at risk, including 6,000 in Canada. It also sparked a long-overdue discussion about the dangers and costs of privatization.

CUPE National has carefully documented the high cost and high risks involved in public-private partnerships and contracting out here and here. Carillion’s problems include massive cost overruns, fines for improper dumping of waste, fines for failure to properly clear Ontario’s highways, and fines for polluting important salmon rivers.

Toronto has had its own bad experiences with contracting out and privatization.

  • Impact Cleaning Services was fined for failing to pay contracted cleaners proper wages.
  • A P3 proposal for the Gardiner Expressway would have added $1 billion to the price tag.
  • Contracted out parts management in Fleet Services has been plagued by problems and the City can’t find a new contractor that can deliver the services properly.
  • Contracting out in Engineering and Construction Services means the City is paying 50% more for engineering services and almost double for communications services.

Local 79 continues to advocate for contracting services back in. We work with other CUPE Locals and CUPE National to shine light on cost overruns and service problems that result from contracting out. We’re also working with researchers across the country to monitor the Federal Liberal government’s newest privatization scheme: the Canada Infrastructure Bank.

If you have come across problems with contracted services in your division or your neighbourhood, let us know!