Privatization Fears Just Fallacy

Media Appearances, Crown Corporations, Frontier Centre

From Brandon Sun, Tuesday, July 5, 2011.

In advance of this October’s provincial election, the NDP’s pocket fear-mongering division is working overtime to try and paint the Progressive Conservatives as a pack of liars.

It’s the same old story that the NDP keep trotting out: “Don’t elect the Tories or they’ll privatize Manitoba Hydro. And if you don’t believe us, look at what happened to MTS.”

Never mind the fact that Progressive Conservative Leader Hugh McFadyen has put nothing on the public record that he has any intention to privatize Manitoba Hydro. There is no known business model to do so, and no need to create one as Manitoba already offers its customers the lowest electricity rates in the country. The NDP already know that.

As Winnipeg Free Press writer Mary Agnes Welch recently noted, the NDP’s attacks are largely based on guilt by political association.

The Tories under Gary Filmon promised they wouldn’t sell off the Crown corporation, and then went ahead and did it anyway. McFadyen was a senior policy staffer under Filmon.

That, plus McFadyen’s work with the high-powered consulting firm Navigator, which was hired by then-Ontario premier Mike Harris to manage the deregulation of that province’s power market, has given the New Democrats a fair amount of political fodder.

And of course, where would the NDP be without their political allies, the unions, which have begun crusading against the Conservatives for costing Manitoba jobs with the MTS privatization?

A recent press release from the Manitoba Federation of Labour compared MTS as a publicly owned crown corporation to its reincarnation as a private entity.

They found that when it was public, MTS had 1,750 employees with 79 per cent of them working full-time. Fifteen years later, there are now 1,214 workers, with only 54 per cent of the employees working full-time.

The federation states that clerical jobs dropped by more than 30 per cent, with part-time workers more than doubling. The organization also took issue with the more than $3.5-million annual salary of the private sector MTS CEO to that of Saskatchewan’s SaskTel CEO of more than $350,000 per year.

This kind of fear-mongering fits well with the labour movement, which is concerned about losing bloated administrative, money-sucking bureaucracy. And painting the Tories as a pack of two-faced liars who will say and promise anything to get elected has long been the NDP’s election strategy.

But the labour federation wasn’t the only one doing comparisons. The Frontier Centre for Public Policy did a little comparison of their own with SaskTel, the last remaining Crown telecommunications corporation of its kind in the country.

Policy analyst David Seymour found that 10 years after the province devolved MTS, the results for company size and profitability have been “dramatic.”

These days, MTS earns double the revenue, has three times the number of assets and employs 20 per cent more people than SaskTel. And SaskTel’s hands are tied when it comes to new investment because what it borrows and spends can become a liability for Saskatchewan residents.

Not so MTS, which has out-invested SaskTel by nearly two to one over the last five years, and — as Seymour notes — now runs a fibre-optic network from New York to Victoria.

Privatizing MTS was a good business decision that has allowed the company to flourish, while SaskTel, which is still a good company and offers its customers similar services, has not grown much beyond its provincial borders.

This of course, does not mean that Manitoba Hydro is about to be privatized — far from it, in fact. That is just a trumped-up NDP fallacy designed to smear their opponents.

But the privatization bogeyman just isn’t as scary as the NDP would have us believe.