PSAC DISCUSSION PAPER: Privatization

The Public Service Alliance of Canada has been fighting to stop the privatization of Public Services ever since Canadian federal politicians have adopted the «lean government» policies championed by Margaret Thatcher and Ronald Reagan. Privatization describes any initiatives that are designed to transfer public sector work in whole or part from federal, provincial, territorial or municipal governments to the private sector. It includes but is not restricted to contracting-out initiatives, Alternate Service Delivery initiatives, and public-private partnering initiatives. Downsizing is often no more then a thinly disguised privatization initiative. The work remains. However, if the Public Service is not provided with the resources to do the work, it is transferred to the private sector either intentionally or by default.

Privatization has impacted most government departments and union components. The Federal government began closing Defence bases and privatizing what they called «nonessential or non core services» around the beginning of the last decade. UNDE members in all areas of the country were forced to either relocate or leave the public service. No location remained untouched. Workers who provide custodial, food preparation and trades services in all departments saw their jobs move to the private sector. Changes to unemployment insurance saw much of the federal public responsibility for employment security in Canada transferred to private citizens and temporary employment agencies. Public Works responsibilities and government purchasing services have been privatized. Coast Guard and Fisheries services have been cut or transferred to the private sector. Agencies have been carved from government to collect taxes, inspect food supplies and administer our national parks. Private companies have been encouraged to regulate and police themselves. In the midst of the recent national concern about security, Defence logistics, which historically provides the lifeline that nourishes all military operations, has been contracted out to a transnational corporation. This is only a partial list, but it demonstrates how successful the attack on public services has been.

Corporate and global pressures to privatize public services are likely to grow stronger in the years to come. World Trade agreements like the proposed Free Trade Agreement of the Americas (FTAA) and the General Agreement on Trade and Tariffs (GATTS) encourage private profit to the detriment of public and community goals. If they are adopted as envisioned by their proponents’, public services and well paid unionized jobs will be threatened. Transnational corporations will view them as trade barriers and will have the power to sue governments to have them removed.

The PSAC will have to be proactive in finding ways to stop and even reverse the trend towards privatized public services. In the past we have often had no choice but to be reactive. To achieve our social goals and our goals to protect members’ working conditions we must be proactive. We need to examine why we are against privatization and whether our actions have adequately addressed our concerns.

This question might seem obvious. However, the PSAC opposes Privatization for many different reasons. On one hand we are an organization committed to social justice and worker equality. Privatization undermines labours’ commitment to a better society by facilitating the acquisition of private profit to the detriment of community. On the other hand we have legal obligations to protect our members and the sustainability of the union.

We oppose Privatization because it removes public services from the public realm. Public Services should be accountable to Parliament and the people of Canada and not shareholders. Globalization increases the threat of privatization and increases the likelihood of foreign control of public service functions. Canada’s national interests and the interests of our members will be jeopardized. Initiatives like the Supply Chain project have already begun to transfer national interests to transnationals.

Privatization often leaves our members with poorer wages and working conditions. It has a negative impact on our members and on the communities in which they live, by lowering the local tax base and increasing demand for local social support mechanisms. Privatization is often characterized by centralization which causes even further job loss and community disintegration.

Privatization creates health and safety and work life balance issues by increasing workload, contributing to unsafe workplace conditions and irritating the conflict between work and family. It increases job insecurity and leads to stress. Stress is the quickest growing workplace health and safety hazard in the world.

Privatization does not save money or improve services. Successive auditor general reports have mourned the lack of rigorous evidence in support of privatization arguments and attacked the lack of accountability that has evolved. Moreover, Privatization includes hidden costs that are seldom adequately captured.

Privatization can lead to a loss of union protection. It can also create environments where our members are vulnerable to raiding from other unions. Privatization also tends to create smaller bargaining units which increase the costs of servicing members.

The PSAC convention adopted Policy # 4 «Privatization and Contracting Out» to express the union’s position on privatization issues and guide our members’ actions.

Privatization threatens workers everywhere. Consequently, we have joined with labour partners to promote understanding of how privatization works, and plan activities to oppose it. We also have participated in protests and learning events that show how globalization facilitates privatization.

We have been proactive in some very concrete ways as well. We have negotiated contract language to ensure that the union is alerted to privatization situations as soon as the employer begins contemplating them. We have negotiated workforce adjustment policies, joint adjustment and transition committees and relocation directives to mediate the negative impacts of privatization once it has happened. We have worked to ensure successor rights for our members, when they have been forced into the private sector. We have also pressured employers to provide counseling for impacted members through EAP and other similar programs.

Still, our responses to privatization have tended to be reactive and focused towards particular privatization initiatives. We have utilized several different kinds of strategies. Although our fight back campaigns have had some success that success has been limited.

Frequently, we begin our fight back campaigns by trying to alert the public through the press that important public services are in jeopardy. We try to demonstrate that privatization arguments are suspect and ideologically oriented, and will neither save money or increase efficiencies. We try to demonstrate that there are hidden costs to privatization and have quoted sources like the auditor general to back up our allegations. There is a flurry of activity in the media. Employers cavalierly deny our claims and wait until the media interest subsides, then continue with business as usual.

We mount campaigns to get the public in our local communities on side. This tactic has been somewhat successful in rural communities where the need for a public service presence is better appreciated and public service employees are a more visible presence in the community. We can clearly demonstrate how the whole community will suffer, in those instances. In more urban environments it is harder to show the damage that result from a loss of public services. Although we have become very adept at political lobbying, the nature of our political system has worked against us. Regional MPs have a limited ability to influence their caucus. With some exceptions, Public Service employment issues tend to be less important for Members of Parliament representing the more densely populated regions of Canada blessed with lower unemployment rates. We have garnered the support of Opposition MPs, but they have even less power to impact changes in policy.

Although we consistently oppose privatization we have also abetted privatization by working with the employer and potential contractors to ensure that our members will have the best working conditions possible. The Supply Chain Project is a recent example. The Union of National Defence Employees (UNDE) was able to negotiate terms and obligations into the Request for Proposal that significantly improved the nature of the transition arrangements. However their success in this area undermined the union’s concurrent argument that privatization of public services is bad for the country and for workers. Awkward compromises are often necessary.

We have stopped some privatization initiatives and mediated the impacts of others. Our arguments have had an impact. Neither the government nor most large contractors are comfortable arguing in favour of contracting out initiatives based on savings alone anymore. Through negotiations we have been able to persuade employers to alter business cases or include better working conditions in Requests for Proposals. Our success in following our members has convinced both the government and larger potential contractors to automatically reject Type 3 Workforce Adjustment Offers. For instance, DND has developed and issued a national policy on employment continuity that is to be applied to all ASD initiatives affecting 10 or more indeterminate employees. We have also negotiated fair collective agreements on behalf of our employees who have been privatized.

From when Privatization initiatives are announced to when a contract is finally awarded takes a long time. It is hard to mount a sustained fight back which sustains the interest of the membership, community, politicians and press, when we have no control over the timetable. We are in the position of arguing about details that the employer has the ability to change at will. Private Partnership relationships enable the employer to argue that the details are not important because the partners (the employer and the contractor) will address them together at a later date. Privatization becomes attritional and can generate both stress and reluctant acceptance.

Our larger social goals often seem to be in conflict with our mandate to protect our members. We have been successful in protecting our members but far less successful in stopping privatization. By focusing on the negative financial implications of privatization both for the public and for our members, we have tended to imply that our main concern with privatization is monetary. The commitment to public services for their own sake is often overshadowed. Our successes reinforce this tendency. Our ability to negotiate fair transition arrangements with contractors facilitates increased privatization in other work locations. We seem to be unavoidably undermining our own long range goals and reinforcing the myth that globalization is inevitable. We run the risk of confusing the public and our members to what the union’s policy really is. It makes it harder for us to make rank and file members aware of what we have done in their behalf.

Privatization has stretched the unions’ resources by making it necessary to separately service increasingly smaller units. As more unions are changed by privatization the competition for union membership increases along with the potential for more raiding. Collective solidarity is undermined.

To preserve public services we have to create long-term plans instead of just reacting to specific initiatives. The legal restrictions imposed by globalization increase the urgency for long term planning. Long term planning implies increased resources. The privatization trend will increasingly leave us vulnerable to the legal manipulations of global free trade decisions if we don’t act decisively not only to protect our members but public services in general. This is an essential task, but it will not be an easy one. Some of the questions we may want to address are as follows.

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