Privatization of Public Infrastructure

Canada Infrastructure Bank and Pay-the Rich-Schemes

The Trudeau government insists all loans from the Canada Infrastructure Bank (CIB) for public works and services must include an agreement to hand over local control and future revenue to a public-private-partnership (P3). This demand for privatization is yet another scheme to pay the rich. For the global monopolies and cartels, P3s are a guaranteed source of risk-free profit and a path towards greater control of the economy.

The CIB has $35 billion in public money available for infrastructure development and maintenance, which municipalities, Quebec, the provinces and territories badly need. The Trudeau dictate to "partner" with powerful private interests if local governments want a CIB loan is a wedge into privatization of existing and future public works with the attendant loss of public revenue and control.

Privatized public works mean in practice that private interests expropriate as profit a portion of the new value public sector workers create. This expropriated added-value is lost to the public sector along with control. With P3s both social wealth and control over the economy become further concentrated in the hands of a few global oligarchs.

Public enterprise, including infrastructure, should be a major source of revenue for governments. By adopting neo-liberalism,  privatization becomes paramount and governments seek revenue elsewhere, usually from regressive taxation of individuals and user fees, and engage in cutbacks of social programs and public services. The crime involved is that public authorities of a modern economy in a country as large as Canada do not need private funding for planned public projects. They can raise money from public banks and treasury based solely on the prospect of a return of those borrowed funds from the future value workers produce at the planned developments.

Trudeau Pressure to Privatize Mapleton Infrastructure

Some municipalities, even though eager for investment funds for public infrastructure, are reluctant to directly "partner with private business" within P3s despite the Trudeau government's insistence. Numerous studies have shown P3s result in a burden on public finances and a loss of local control.

Like many municipalities, the township of Mapleton, Ontario is in dire need to upgrade its water and wastewater systems. The CIB, derisively called the Bank of Privatization, offered a $20-million debt-financing package but insisted on a P3 taking control of the waterworks. Even before the deal was finalized, the Trudeau government began promoting the Mapleton infrastructure "pilot project" of a CIB loan and P3 as the new model for all other municipalities to follow. The package was structured to ensure the P3 private "partner" could expropriate a certain profit from the municipality's sale of water and gain control over management. This would leave the local public waterworks with a yearly loss of income and with less control to make changes. After studying the CIB loan and P3 offer, Mapleton Township announced that raising money on their own, presumably through a municipal bond, would be less onerous and the municipality's public service would retain control. It cancelled the CIB P3 deal but not without being presented a $367,000 legal bill in connection with the process and no offer of assistance from the federal government.

Municipalities had been hoping the CIB would provide relief from the traditional method of funding infrastructure investment through municipal bonds arranged with private moneylenders. However, the Trudeau government stipulation of introducing a P3 along with the CIB loan in effect means jumping into bed with the same devil but in different garb.

Municipal bonds held by private global moneylenders have been sucking the blood out of municipalities for decades. Even facing this fate, some municipalities such as Mapleton find it better to deal with the devil they know than the P3 parasites. At least they retain some semblance of local control and the eventual loss of revenue through interest payments has proven through studies to be less onerous than with P3s.

This begs the question why a federal public institution, the CIB, would demand another public institution, a municipality, involve global private partners when the entire deal could be consummated without incurring debt to private lenders and with no loss of local control and future revenue. Why would the CIB not offer municipalities interest free loans where only administration costs are charged and future repayment of the principal when the new or rebuilt infrastructure begins producing value?

Of course for this to work without loss to the federal government, it would have to stop borrowing from private moneylenders itself and begin the modern government practice of lending money to itself with repayment or replenishing of coffers guaranteed from produced value as the economy develops. But such a sensible new direction would violate the neo-liberal demand that all economic projects whether public or private must serve the private interests of the global oligarchy and concentrate social wealth and power in fewer hands.

What the Trudeau liberals and CIB call their "innovative financing model" is yet another pay-the-rich scheme to turn public funds and projects over to powerful private interests. Even the $35 billion given to the CIB as a start-up fund is suspect as it comes from the government's general revenue, which is being replenished with unprecedented borrowing from global moneylenders.

With all this government borrowing from private interests and the proliferation of P3s, public funds for social programs and infrastructure and any subsequent public revenue disappear into the pockets of the rich. The deficits and national debt escalate and the experts and media pundits scream themselves hoarse yelling for cuts to social programs, more and higher user fees for public services and greater individual taxation.

Local control over public infrastructure created after years of nation-building is being lost to nation-wrecking as the global oligarchs invade every cell of the economy and suck out more and more value to fatten their pockets. This leaves the local public authorities and the people with less money for public works and social programs, and less control over their lives, deepening a hole that is being dug for them.

Trudeau's Campaign Promise Evaporates

During the 2015 federal election, the Trudeau Liberal Party campaigned on a promise that the CIB would assist municipalities to build and maintain their needed infrastructure. Never once during the campaign did Trudeau say that CIB loans would come with a P3 obligation to hand over control and money to global private interests. After becoming the party in power, Trudeau brought in Larry Fink, a leading oligarch from the BlackRock investment cartel, and other oligarchs who pushed and organized to open up municipalities and other parts of the economy to global investors. They insisted and the Trudeau government agreed that a P3 demand must be included with any CIB loan. These demands and nation-wrecking practices run counter to nation-building and the right of the people to control the economy and all affairs that affect their lives.

The CIB was an opportunity for something new, a public financing agency without a direct connection to private moneylenders and their bloodsucking interest payments through federal government borrowing and municipal bonds. Such a new direction would entail public works financed through government loans without the involvement of private cartels as moneylenders or P3s. Control and profit from realized infrastructure would stay in the communities and result in greater revenue for the municipalities and lower user fees for the people. Such a new direction was not to be and in fact the government is making the situation worse.

The voices for a new direction for the economy and nation-building are growing louder and louder. Whose economy? The people's economy! Who decides? The people decide! Who controls? The people control! Join the discussion and movement for a new direction for the economy.

(With files from Mapleton rejects private takeover of local water system, Canadian Union of Public Employees (

This article was published in

March 19, 2021 - No. 19

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