On available options

The Star presents an interesting point/counterpoint on the use of P3s as a means of deferring government expenses (at a high future cost). But while it's tough to disagree with the outcome of Thomas Walkom's piece against the use of P3s as a means of buying now and paying more later, it's Christopher Hume's column which actually raises the more interesting issues - both as to why P3s may be seen as needed by some, and what the public sector can do to minimize costs while potentially generating public returns.

Here's Hume on the background to why he sees P3s as inevitable for now:

In a perfect world, there would be no need for public-private partnerships. Government would have all the money it needs to pay for all we need, and everyone would be living happily ever after.

In the real world, however, government is chronically short of funds and we, the voters, aided and abetted by the media, would rather not pay the taxes we should. And so we elect leaders who tell us what we want to hear even when we know it's a lie.

And in these conservative times, not only are tax rates under fire; so is the very idea of government. Is it any wonder that the decline of the public infrastructure has reached the point where in Ontario alone it would cost $143 billion to bring it up to an acceptable standard?

Faced with such overwhelming need and a reactionary culture, government has little choice but to look to the private sector.

There's of course plenty of room for argument as to whether either commentators like Hume or governments themselves should be giving in to the assumption that voters prefer being lied to about the costs of providing needed services. And I'd strongly take the side that the most needed change is to counter the initial deception - not merely to look for some way of paying off the private sector to win its endorsement of government spending.

But whatever the proper response, the underlying premise is that any supposed need for P3s is itself based on incorrect assumptions. And that's surely a recipe for bad public policy.

Meanwhile, Hume does point out one means of bringing some benefit back to the public sector:

(I)n certain European countries, some government agencies and departments have themselves started to act as private companies, selling their expertise and services to the highest bidder, including government.

City planning services in Britain are an example, as are incineration plants in Sweden. They bid on public-sector contracts like any business, and when they make a profit, plough it into general revenues.

In Canada, public entrepreneurialism would be viewed as contrary to the ideals of public service.

Once again, it's not clear why we should take as a given that Canadians would disapprove of an effort to build public-sector capacity. And that's doubly so in the case of a development which would not only present the possibility of improving public services, but could also help bring in a return on investment which would help to bridge any gap between what voters want in services and what they're prepared to pay in taxes.

Ultimately, Hume is right to point out some of the options which have been wrongly excluded from Canada's public debate. But the fact that those possibilities are largely ignored offers a reason to bring them back to light and start making the case for more effective public investment, not a basis for accepting that governments have to pay more to get less for lack of any easy alternatives. And once the underlying assumptions are challenged, any case to funnel money into the private sector through P3s falls away in a hurry.