Why is the operation and maintenance of new transit up for bidding?

The Ontario Provincial Government, through its transit agency, Metrolinx, has decided to take control of public transit assets and make decisions on building and maintaining these systems. In doing so, the government will make deals with big private companies to build and maintain the core of your city's transit system. They will also hand over to these developer consortiums - parcels of land at city owned transit sites – giving the developers air rights allowing them to build up above ground level. They stand to make huge profits from expensive condos - with no money being paid to the city. With private companies running our transit system – service will not improve, overcrowding will become the norm, our transit systems will crumble, and fares will skyrocket. The Ontario Government is currently moving ahead with plans to take control of Toronto's TTC Subway system, claiming the city has not been able to expand or make improvements to the transit system for many years. Perhaps Premiere Doug Ford and his Ontario government are hoping that the public has forgotten – but let us remind you. It was the former Conservative Ontario Government – under Mike Harris – that abolished funding of public transit, so the province stopped paying into the system in 1998 which means the system has been under-funded for years and all requests for provincial funding were denied. Now Ford blames the city for not being able to get things done. Instead of stealing the subway from the City – the province should provide Operational Funding so the city can once again provide world class public transit.

What is a Public-Private Partnership (P3)?

P3s come in many forms, but put simply, they are deals where the government signs a contract with a private company or consortium to build and operate a piece of infrastructure or a service on the government’s behalf. In exchange, the government promises them a healthy guaranteed profit over the decades to follow.

Why is our transit even being considered for privatization? Isn’t transit a public service?

The great promise of public-private partnerships is reduced risk, because the private partner promises to deliver the project for a fixed price and to pay penalties if they fall behind schedule. It sounds great in theory. In practice, when private projects’ costs increase, the private partners often simply walk away if they aren’t going to make any money on the deal anymore. That’s exactly what happened with the London Underground P3. Then the public is left to clean up the mess. Likewise, even though they may promise to pay penalties if they’re late, when the time comes they will threaten to walk away from these deals and throw the project into chaos if the government forces them to actually pay them. These companies spend millions on lawyers who know exactly how to draw up a contract that’s “heads we win, tails you lose.” Look at the TTC, which is finding it impossible to cancel its contract for streetcars with Bombardier even though the deliveries are years late.

What has happened when transit has been privatized in other areas?

The British government decided to privatize its rail infrastructure and the result was a disaster. The privatized infrastructure company, Railtrack, cut back dramatically on maintenance to keep its profits flowing. The number of delays and accidents soared. Eventually, the problems got so bad that they went bankrupt and the government was forced to renationalize the system. In London, the government signed a deal with two private consortia to modernize their subway, the historic London Underground. The private companies promised a fantastic deal in their bids, but unsurprisingly they couldn’t keep their promises. As the companies realized that they weren’t going to make any money because they had under-bid and they experienced delays and cost overruns, they just walked away. Once again, the public was left to pick up the pieces. When everything goes great, private companies will still demand a healthy profit that comes out of taxpayers’ or riders’ pockets. When things go badly, the private companies walk away and leave the public holding the bag.

Does service improve?

Privatization does nothing to improve service. In fact, the private partner may have a strong incentive to cut back on service levels in order to increase its profits. Worse, if the city decides that it wants to improve transit service in the future, it could require renegotiating the contract. In that case, the private partner will no doubt demand a hefty subsidy. Keeping transit public, by contrast, means that service levels are entirely up to the community and not a private company.

Does it result in better jobs?

Private transit operators consistently have higher worker turnover than public agencies. This means that workers can’t build up the skill and experience they acquire over a long career, making transit less efficient and less safe.

Is it safer?

When Britain privatized its rail infrastructure, its accident rates soared. Any private company is going to be tempted to cut back on maintenance to maintain its quarterly profits. It might not cause a problem in the short term but in the long term, it makes a transit system less safe.

Does it cost less?

In most cases, no. But even when it does, cost reductions always have to come from somewhere, whether it's skimping on maintenance, running trains less often, or paying workers less than a living wage. On top of that, private companies need to include their profits, which means an added cost that doesn't exist when transit is publicly operated. Companies often offer very low bids and promise the world to win a contract. But as soon as they run into trouble meeting their promises, they drop the contract and leave the public holding the bag. The auditor general has said that paying a private consortium to borrow money rather than borrowing it directly has cost the Waterloo Region LRT, which is the prototype for others in the area, an extra $48 million.

You’re just a union worried about losing members, right?

We are transit workers because we believe in the service we provide to citizens. At the heart of it, we benefit when transit service is good for riders. When the frequency of trains gets cut, when safety is compromised, and when the transit agency can't retain its most experienced operators, riders suffer just as much as workers. We are also concerned about protecting good, living-wage paying jobs in our city. When a private company comes in, they automatically try to cut wages and benefits in order to make a profit. We believe that everyone in Ontario deserves the opportunity to earn a living wage and provide for their families.

What can I do to help?