Tuesday, November 8, 2016

Liberals hire pro-privatizing bank to advise them on privatization

For some time now the Liberals have been flirting with the idea of privatizing airports. The move would garner much needed funds for the government, turn the airports into profit making ventures, and generate more corporate donations for the Liberals.

A Digital Journal article covered the issue back in July. As a Metro News article said at the time:
The federal government is looking at whether Canada’s major airports should be sold off to private investors as a way to raise tens of billions of dollars in new cash to fund other infrastructure projects. Transport Canada bureaucrats are reviewing the ownership structure of Canadian airports, now operated by not-for-profit airport authorities, to assess the possibilities of transferring them to for-profit enterprises — and collect a windfall in the process.
Now an article in the Toronto Star by Linda McQuaig shows the Liberal government is continuing with its plan. The Liberal government has hired the giant investment bank Credit Suisse to offer it advice on the privatization issue. Yet Credit Suisse is itself heavily involved in the privatization process:Certainly, Zurich-based Credit Suisse has for the past decade been a major global player in the lucrative business of privatizing government infrastructure, including airports. Indeed, in 2009, Credit Suisse bought Gatwick Airport in the U.K., through a joint venture with General Electric. Credit Suisse also recently indicated an interest in advising the Russian government on its plans to privatize some major Russian state-owned enterprises.
The hiring of Credit Suisse is a sure sign that the Liberals are already moving ahead with plans to privatize the airports even though the Liberals deny that any decision has been made yet. But many moves have already been made to advance the privatization agenda. Business has been pushing for privatization through former cabinet minister David Emerson. Emerson headed a government transportation review. Emerson was formerly a Liberal but crossed over to the Conservatives. Although the review was started under Stephen Harper it was completed under the Trudeau Liberal administration. Emerson relied on corporate and investment advisers in producing his two-volume report last winter. The report supports the idea of privatizing airports.
The Liberals produced their own report which follows the same process as the one begun under Harper. Finance Minister Bill Morneau set up a 14-person economic council that supported the sell off. As McQuaig puts it: "Like the Emerson review team, Morneau’s advisory council reads like a who’s who of the business world, and contains no labour representatives or anyone who could be expected to represent the broader public interest." With advice coming only from sources that favor privatization and who stand to benefit from the process the Liberals can claim that expert opinion is all in favor of the process. However, the experts were chosen so as to ensure they would support the privatization policy.
There has been no consultation with those who use the airports, or with the workers at the airports, or even with the boards that now run the airports. Mark Laroche, CEO of the Ottawa International Airport Authority and Craig Richmond, CEO of the Vancouver Airport authority offer some criticism of the Liberal plan. In a joint article, they point out that passengers could expect higher parking costs, airport improvement fees, cuts in cleaning staff, and removal of free services such as Wi-Fi in order to increase profits when airports were privatized. The governance of the airports would be by corporate board members concerned mainly with profit rather than the present boards which often have community representatives concerned with more than just profits.
The present system returns about $1 billion a year to the government in fees. While the Liberals need funds to pay for new infrastructure investment surely selling off existing infrastructure paid for by the public for the benefit of private corporations is not the way to raise those funds. Unless that is, the Liberals want to do exactly the same sorts of things the Harper government would do.

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