Sep 6, 2020

REVIEW: The people need to take back control

Recent Canadian governments thought it would make sense to place the economy in the hands of the private marketplace. Bad decision

Tony Sutton

A review of The Sport & Prey of Capitalists: How the Rich Are Stealing Canada’s Public Wealth, by Linda McQuaig. Published by Dundurn

It’s painful to recount the times in recent decades that we’ve been fed the neoliberal mantra that privatising public services is more cost effective than allowing them to remain in the hands of ‘spendthrift’ governments.

To see the unreality of those claims of corporate fiscal superiority, we need look no further than Britain, where various governments have, over the past few decades, sold essential public utilities cheaply to companies that promised greater efficiency and lower prices.

Unfortunately, as the Brit consumers soon discovered, the private sector is much better at raising prices, slashing services, pigging on profits, and squealing for government support when, inevitably, things go wrong.

The situation on the other side of the Atlantic is worse, US leaders having convinced their guileless citizens that they live in a classless society in which unions are the devil’s creation, socialism is for commie bastards, taxation is evil, and a half-decent public health service is just a liberal wet dream.

Canada is different, we are told. Ours is a kinder, gentler, and generally more sensible society. People are polite. Healthcare is a right, not a luxury. And, perhaps most important of all, Canada has long resisted the economy-gobbling excesses of US-style military funding.

Well, yes. But, as Linda McQuaig points out in her latest book, The Sport & Prey of Capitalists: How Capitalists Are Stealing Canada’s Wealth, a succession of political betrayals have taken Canada on a long ride down the neoliberal highway, leaving the country “increasingly dominated by the forces of private greed that rule the marketplace”.

Sport & Prey begins with a cautionary tale that warns against reckless distribution of public cash, in which McQuaig tellshow Justin Trudeau’s Liberal government paid $4.5-billion of taxpayer cash in 2018 to take over the long-troubled Trans Mountain oil pipeline.

Kinder Morgan, its Texas-based owner, started the pipelinein more optimistic times, as a means of transporting heavy crude oil from Alberta’s tar sands to West Coast ports en route to Asia. However, their plans were thwarted by protests from indigenous groups and others, including the government of British Columbia.

The decision to buy the pipeline was, Trudeau insisted, “in the public interest”, although critics pointed out that its completion would have compromised our ability “to survive on the planet”. How, McQuaig, asks, could “something serve our interest as a nation when it undermines our more basic interests as humans?

In purchasing the pipeline, the Liberal government was following a long Canadian tradition of establishing publicly-owned enterprises. But Trudeau was using this important tool of national development in a new way: not in a way that would advance the interests of Canadians, but in a way that would – by any meaningful measure – set back those interests.”

This mocked a tradition of public enterprise in which Canada had, for a century after Confederation in 1867 “created significant public enterprises and national programmes that helped transform this vast stretch of land into a functioning and successful nation: power plants, a national railway, a public broadcaster, a nationwide postal service, coast-to-coast transportation infrastructure, strong public health care and education systems, a publicly owned pharmaceutical company that pioneered medical breakthroughs.”

Most of those public enterprises have been sold over the past decades by governments that were “under the illusion that we’re better off if we leave our economy and our lives in the hands of the private marketplace. We haven’t made these changes because of the inherent superiority of the marketplace or due to financial necessity”, writes McQuaig.

“Rather, we’ve made them because of the pressure exerted by powerful financial interests who have been keen to take over lucrative parts of our public domain so they can own them and milk them for profits”.

In the eight chapters of The Sport & Prey of Capitalism, the author recounts many of the earlier feats of public enterprise in Canada.

Those include the development of a massive cross-country railway network that catered not only for large urban centres, but also for tiny off-the-beaten-track communities that would never feature in the business plans of wealthy industrialists; and the creation of a public power generating company that harnessed the natural energy of the Niagara Falls to bring cheap electricity to Ontario at the beginning of the 20th-century.

After recounting the fights involved in creating these, and other, successes, McQuaig turns her attention to the disastrous effects of more recent politically motivated interventions.

Her strongest criticism is aimed at former Ontario Conservative premier Mike Harris’s selling of the almost-new Highway 407, the province’s highly profitable Toronto area toll road, to an international consortium for $3.1-billion in 1999, in an effort to balance the books for the upcoming election. The unbreakable 99-year lease he negotiated, described by McQuaig as “the worst deal of the century”, assured its new owners of billions of dollars in profits ($900-million in 2014 alone) from an asset that has since been valued at worth as much as $45-billion.

Compiling a sorry catalogue of ideologically-driven government ineptitude, the author also points to former Conservative PM Stephen Harper’s decision to gut railway safety regulations after taking office in 2011. At the same time, oil companies were switching to rail to transport their volatile product to east coast refineries, numbers rocketing from 500 railcar loads in 2009 to 160,000 in 2013.

The effect of those decisions was grimly predictable. In the early morning of July 6, 2013, a train carrying almost 10,000 tons of oil slipped its moorings at the top of a hill 11 kilometres from the Quebec town of Lac-Mégantic.

“The runaway train raced forward, reaching a speed of 105 kilometres”, writes McQuaig, before it “finally derailed at a curve in the track in the centre of Lac-Mégantic, engulfing the town and dozens of its people in a gigantic inferno. The fire soared to 1,650 degrees Celsius. Water streaming from firehoses simply evaporated in the scorching heat. There were no survivors. Everyone caught up in the flames in the little town died”.

The disaster, which killed 47 people, could have been much worse – the train had earlier passed through packed residential areas of Toronto.

Afterwards, the Harper government ignored calls for a public inquiry, leaving three railway workers to stand trial for criminal negligence. They were acquitted.

“Harper and his officials were never held accountable for their reckless deregulation. Nor were the greedy rail barons who pushed – and continue to push, mostly successfully – for relaxed safety laws”, adds McQuaig in a poignant postscript to the story.

There’s much more here for those who are concerned about the decaying trust between government and voters, including:

The rise and ultimate politically-motivated sale of Connaught Laboratory, a world-leading drugs company that developed a serum in 1913 to combat diphtheria, the main killer of children at the time, and later discovered insulin before helping eradicate smallpox. The company was sold by a Conservative government for $72-million in 1972; and
The government’s rejection of a 2013 plan to introduce public banking, using the thousands of post office branches throughout the country, to provide competition to the country’s Big Five banks. Those giant institutions are regularly accused of being more interested in expanding ever-bulging profit margins than serving low-income customers, who increasingly have to resort to payday loan sharks for their ‘banking’.

McQuaig ends with a call to action. We should, she urges, “consider not just resisting further privatisation, but actually expanding the public domain”, including public banking, a publicly owned pharmaceutical company “to provide generic drugs and other drugs rejected as insufficiently profitable by private industry.

“An expansion of the public domain should also include a national child care programme, and a universal pharmacare programme, as well as an expanded national infrastructure, which would be owned and operated by the people of Canada. All these innovations are possible, worthwhile, and within our reach.”

That’s sound advice for our political master, not only in Canada, but also the rest of the world. So, what are we waiting for, Mr Trudeau? And no more bailouts for the oil industry, eh!