I still remember standing at a Toronto bus stop in February’s brutal cold snap, watching as three scheduled buses simply failed to materialize. My fellow commuters – healthcare workers heading to overnight shifts, students, and service workers – grew increasingly frustrated as the transit app showed buses vanishing from the schedule in real-time. This wasn’t an isolated incident but a symptom of a deeper conversation happening across Canada: what happens when public services face chronic underfunding, and does privatization offer a solution or accelerate the problem?
The privatization debate has intensified recently as provincial governments across Canada explore selling stakes in everything from healthcare delivery to public transit. The arguments seem straightforward on paper: private companies bring efficiency, investment capital, and innovation. But the on-the-ground reality often tells a different story.
“Privatization follows a predictable pattern,” explains Dr. Heather Whiteside, political economist at the University of Waterloo and author of “Purchase for Profit: Public-Private Partnerships and Canada’s Public Health Care System.” “First comes the strategic underfunding of public services, then the declaration that the service is failing, followed by privatization presented as the only solution. But rarely do we see the promised cost savings materialize for average citizens.”
The numbers support this assessment. When Ontario privatized Highway 407, initial toll rates of around 10 cents per kilometer have ballooned to nearly 60 cents during peak periods. What was once public infrastructure now generates billions in profits for the Spanish company Ferrovial and the Canada Pension Plan Investment Board – extracted directly from commuters’ pockets.
Healthcare presents perhaps the most concerning privatization frontier. Several provinces, including Ontario and Alberta, have increased contracts with private surgical facilities to address pandemic backlogs. While this creates the appearance of reduced wait times, Canadian Doctors for Medicare warns of a troubling side effect: healthcare professionals being pulled from the already strained public system.
“When you introduce a parallel private system, you’re essentially competing for the same limited pool of healthcare workers,” says Dr. Melanie Bechard, chair of Canadian Doctors for Medicare. “We’re seeing this play out in real-time – nurses leaving hospital positions for private clinics offering better working conditions, which further destabilizes public care.”
The economics rarely add up either. A 2022 analysis by the Canadian Centre for Policy Alternatives found that privately delivered but publicly funded surgical procedures in British Columbia cost on average 12% more than the same procedures performed in public hospitals. The premium went toward profit margins, executive compensation, and marketing – expenses that don’t exist in public delivery models.
Yet privatization continues advancing, partly because its true costs remain diffuse and difficult to quantify. When BC Hydro entered long-term contracts with private power producers, ratepayers ended up locked into above-market prices for decades. The provincial auditor general estimated these arrangements would cost British Columbians an extra $16 billion over the contract terms.
“There’s this strange contradiction where governments claim they can’t afford public services, then enter agreements that cost taxpayers more over the long run,” notes Keith Reynolds, a former public sector financial analyst. “The financial benefit often flows to private investors while risks remain with the public.”
Perhaps most concerning is when privatization affects vulnerable populations. In Ontario’s long-term care sector, a McMaster University study showed that for-profit facilities experienced COVID-19 outbreaks that were larger and deadlier than their public counterparts. The profit motive had created structural incentives to minimize staffing costs and maximize bed counts – factors that proved catastrophic during a respiratory pandemic.
Some communities are pushing back. In Halifax, residents successfully campaigned against a proposed P3 (public-private partnership) for wastewater treatment after analyzing P3 failures in neighboring municipalities. Indigenous communities across Canada have also been vocal in opposing privatization of water systems, pointing to both sovereignty concerns and spotty performance of private operators in remote locations.
“Privatization isn’t an economic inevitability – it’s a policy choice,” argues Rosemary Warskett, labor researcher and former national representative with the Public Service Alliance of Canada. “And increasingly, communities are choosing differently when they understand the long-term implications.”
Alternative approaches exist. In Edmonton, the city brought previously contracted-out waste management services back in-house after finding it could deliver the same service at lower cost while providing better working conditions. Quebec’s public childcare system has demonstrated that well-designed public services can deliver better outcomes at lower costs than market-based alternatives.
The debate ultimately centers on what Canadians value. Are public services merely commodities to be delivered by the lowest bidder, or are they expressions of shared values and collective provision? The answer shapes not just service delivery but the nature of citizenship itself.
“When we privatize public services, we’re not just changing who delivers them – we’re changing our relationship to them,” says Dr. Whiteside. “Citizens become customers, public needs become market demands, and our collective responsibility becomes individual consumer choice.”
As I finally boarded that delayed Toronto bus, I wondered if we’re asking the wrong question. Instead of debating whether privatization can save underfunded public services, perhaps we should be asking why we’ve allowed these essential services to be systematically starved in the first place. The real efficiency may lie not in private delivery but in properly funding the public systems Canadians have built over generations.
The next time you hear privatization presented as the only solution to a struggling public service, it’s worth considering who benefits from that narrative – and what alternatives might be possible if we approached public services as investments rather than costs. The evidence suggests that properly funded public services remain the most equitable, efficient way to meet our shared needs.
