Toronto – October 5, 2016 – Saskatchewan Premier Brad Wall has opened the door to the possible privatization of SaskTel – the publicly-owned telephone, cell, and internet provider in that province. Saskatchewan has a long history of strong and profitable Crown corporations like SaskTel that benefit everyone. But fresh off another election win with a big majority government, Wall now appears to be close to putting up the For Sale sign at SaskTel.
Right wing governments have been keen to sell valuable, profitable public assets to their corporate friends but public opposition, especially in Saskatchewan, has often gotten in their way. In the face of opposition to selling off large public assets like SaskTel, the Wall government had taken an incremental approach to privatization. Since 2008, the province has sold off 16 different publicly held investments, shares, or stakes – including the province’s Information Services Corporation in 2012, and more recently, 40 of the province’s liquor stores. But now the big fish are in the government’s sights.
Privatization has always proven to be a short term fix that creates many problems down the road, such as the loss of future revenues for the province. Private corporations serve their shareholders while Crown (public) corporations serve the good of everyone providing needed revenues to help pay for hospital, schools and infrastructure.
The reason SaskTel was created was because the private corporations weren’t interested in delivering services to low profit or non-profitable areas of the province. But now that the public has built the infrastructure through their taxes, the private sector is happy to take ownership.
One only needs to look next door to Manitoba to see what happens when MTS, the public phone service was privatized. Basic phone service through SaskTel is $8 per month; 27% lower than comparable service provided by the privatized MTS in Manitoba. Meanwhile SaskTel returned $497 million over the past five years through its annual dividend to the people of Saskatchewan.
But Saskatchewan isn’t the only province with privatization fever. In Ontario the Liberal government is in the process of selling off 60% of the province’s most valuable public asset, Ontario Hydro. A majority of Ontarians oppose the plan, but the Liberal government is proceeding with its short term fix to pay down debt while foregoing a revenue stream that has provided on average about a billion dollars annually. This means less money for vital public services, a total loss of public oversight, and increased energy rates to pay for corporate profits.
Privatization may be a short-term fix in times of slow economic growth and may be good for the private corporation that wins the prize, but it is long-term pain through increased rates and poorer public services for the rest of us.