Privatisation of public utilities

by Yule Heibel on October 15, 2005

A few days ago I saw an article by Christopher Hume in the Toronto Star that disturbed me deeply: Privatizing the public domain; For better or worse, the time is near (Oct. 13, 2005). It begins thus:

Forget stocks and bonds, real estate and art — invest in infrastructure. That’s where the smart money is these days.

That was the message a panel of Canadian experts delivered recently to a delegation of visiting Australian developers and bankers, all of whom had their cellphones turned on and their hands in their (very deep) pockets. [More…]

Hume describes aging infrastructure in Canadian cities, too expensive to replace with tax money, which is being privatised through corporate funding. The assistant deputy minister of public infrastructure, Paul Evans, told the visiting delegation that Ontario does not have the money to fix its public infrastructure. Hence the heady leap into private investors’ arms. Hume equivocates as to whether he is seriously alarmed, or whether he thinks that, since it’s inevitable, one may as well make hay when the sun shines: Toronto is too expensive to fix, and public money is scarce. There’s plenty of money in Toronto, but it’s all in private hands …so, why not get those rich private investors to put some of their cash into deals that turn the building of roads, hospitals, and transit into private enterprises? Why not water and sewage, too? Why not everything that used to be public…?

And then, a day or two later, I see an article by Quentin Dodd in The Tyee that made my jaw drop, given the softening up it had already been given by Chris Hume. Dodd’s article, Water Works Quietly Privatized offered an eery parallel to what Hume described. Dodd’s piece starts with a question:

Who do YOU want running the municipal water systems in your community?

That’s the question asked on Vancouver Island and elsewhere in BC as the province’s municipal and regional district elections loom next month.

More and more communities are being tempted into striking deals with privately-owned corporations to take programs and services off their books. The contracting out of public water-supply and waste-water-discharge systems has been quietly introduced into some communities without any consultation or notification to municipal taxpayers. [More…]

The drinking water? Not only privatised, but sold out to a company based in Texas…? (Read the article.)

The insiduous thing is that these privatisations don’t happen in a big visible way — they’re done in small increments. In the case that Dodd describes in detail, it started with contracting out the water safety sampling to a private concern, a mere $36K contract. But here’s where the money is deceiving. $36K is chicken feed in the overall scheme of things, but this is the public water supply that’s being sampled for its potability.

The whole problem of accountability is encapsulated in this little story. Then comes the kicker — i.e., now Dodd starts to talk about where I actually live:

Elsewhere on Vancouver Island, as in some parts of the BC mainland such as Surrey, private deals have been quietly made and contracts signed and sealed, sometimes putting parts of water-system operations into the hands of private companies for up to 20 years or more.


Shortly after Vancouver-based Terasen Inc. was sold to the Texas-based Kinder Morgan company in August this year, the Terasen Utility Service company, a wholly-owned subsidiary of Terasen, was formed to pursue water privatizations in municipal, resort and First Nations communities.

It has since gone on establish water partnerships in the Nuu-chah-nulth and Cowichan nations, contract water-metering for Surrey, buy a half a share of an Alaskan community water system, and secure a 21-year private-public-partnership (P3) deal to operate the City of Langford’s sewer system on southern Vancouver Island. Word is that it now has its eye on the much lager [sic] Capital Regional District’s system. [More…]

The Capital Regional District is the figleaf covering the mess that is local Victoria and its environs’ political landscape. Victoria the city is very small, but it’s the capital of BC, and it’s responsible for providing services to a whole range of people, many of whom are in need — many of whom come from surrounding municipalities. We are literally within spitting distance of one another’s jurisdictions, with Oak Bay to the East, Saanich to the North, and Esquimalt to the West. (Victoria, Oak Bay, and Saanich are jammed onto a peninsula — it’s cozy…) Further West are the other “western communities” (including Langford, mentioned by Dodd, and Metchosin, Sooke, etc.). All together we comprise the CRD, the Capital Regional District, with a population of somewhere around 350K or so and growing. I live in Victoria. It has taken me a couple of years to figure out what the CRD is or does (I’m still not entirely sure); it’s a supra-governing body that makes regional decisions. Its board is appointed (as far as I can tell, but correct me if I’m wrong) and consists of people elected to office in all the region’s municipalities, as well as some who I can’t figure out how they got there. We have layers upon layers of municipal government here, it sometimes seems to me, with various “authorities” (Health Authority, Harbour Authority, etc.) defending turf.

The CRD is the body that’s responsible for all the untreated sewage we pump into the ocean daily. The CRD does this, the CRD does that, but somehow it’s too difficult to explain where their mandate comes from (I can’t vote for or against them), and their decisions seem somehow to float above the normal democratic channels. (Perhaps in the effluvium emitted by the sludge in the Juan de Fuca Strait…?)

With Dodd suggesting that there are rumours that the CRD might be talking to Kinder Morgan in Texas via Terasen (which used to be a Canadian company but was sold to KM), I really do wonder what the hell is happening to us all.

I’m really trying to understand political processes, trying to understand how citizens can continue to be effective and efficient contributors to public discourse, to rationality, to reason. But when I read about these deals, I feel as though I’m being deliberately worn down. I feel as though my ability to comprehend is being erased, as though my historical memory of how things perhaps used to work in older variants of political process and democracy is being systematically drugged and incapacitated, until I either can’t remember anything at all or I just give up — both of which amount to the same thing.

Coincidentally, I just started reading Jane Jacobs’s Dark Age Ahead. In the introduction, Jacobs defines what she means by a dark age: it’s essentially a sort of mass amnesia where people literally forget how things were done before. As a result, the culture meets its end. On page 9, sketching out the most famous Dark Age (which was but one of many), she wrote something that really struck a nerve, given the changes imposed on us through corporatism and globalisation:

In the last desperate years before Western Rome’s collapse, local governments had been expunged by imperial decree and were replaced by a centralized military despotism, not a workable organ for governmental judgments and reflections.

Substitute (unfettered) “free trade agreements” for “imperial decree,” and “corporate rule” for “military despotism,” and keep in mind that the Romans didn’t see it happening while it was happening. Until it was too late. It’s terribly important to keep Jacobs’s other caveat also in mind:

Writing, printing, and the Internet give a false sense of security about the permanence of culture. Most of the million details of a complex, living culture are transmitted neither in writing nor pictorially. Instead, cultures live through word of mouth and example. That is why we have cooking classes and cooking demonstrations, as well as cookbooks. (…) Every culture takes pains to educate its young so that they, in their turn, can practice and transmit it completely. (…)

As recipients of culture, as well as its producers, people attend to countless nuances that are assimilated only through experience. [p.5]

In other words, a one-sided reliance on one aspect or techne (only the cookbook, say, never the demonstration, the hands-on learning) means that the nuances are lost. When the nuances get lost, forgetting sets in. A chain is broken. It can be reconstructed later, but a reconstruction, Jacobs is at pains to point out, is not a restoration. A reconstruction typically brings with it its own rigidities and ideologies that end up actually blocking and frustrating the new that might emerge.

At any rate, I’m deeply discouraged to learn about what looks like below-the-radar privatisation, a sort of stealth strategy that takes a nip here, a nip there, perhaps until very little is left in the public domain — and municipal leaders (as was the case in Dodd’s example of Campbell River) don’t even know it. We are losing something here, and it’s more than just our minds.

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