Friday, June 14, 2019

AG report another example of privatization’s failure

New Brunswick Auditor General Kim MacPherson New Brunswick Auditor General Kim MacPherson

The New Brunswick Union (NBU) has long held that privatization of public services and resources is not the best way to spend taxpayer money, and the most recent Auditor General of New Brunswick report backs this up.
In the document, Auditor General (AG) Kim MacPherson looks at several issues involving privatization including Medicare cards, highway maintenance and construction work, among other topics.
In all three cases, privatization has been a costly error.
Let’s begin with Medicare cards. In 2013, the province privatized the production and distribution of Medicare cards to Medavie which then subcontracted the work to CPI Card Group. All told, private information of New Brunswickers was given to two companies, something the NBU opposed at the time and stated publicly.
In 2016, due to an error by CPI, the privacy of New Brunswickers was breached. The report also states that the province receives no reports from either Medavie or CPI in regards to controls used to ensure privacy of the information.
So whether or not there’s savings in this set up, the breach in privacy and the lack of reporting makes us wonder if this privatization was worth it for taxpayers. We at the NBU don’t think so and the AG has some concerns:
We recommend Medicare evaluate associated risks as well the necessity of having two private organizations contracted to produce and distribute Medicare Cards instead of one.
Speaking of privatization not benefitting the taxpayer, the report is rife with instances where sound decision making and analysis was not used in terms of highway maintenance and construction work that was outsourced to the detriment of taxpayers.
Here are the AGs conclusions in regards to privatization of the work:
In certain cases, decisions to outsource road and bridge maintenance, construction work and related equipment were not based on evidence nor supported by an objective analysis of costs and consequences.
• Instead, the Department relied on subjective judgement when making outsourcing decisions.
• The Department outsourced work at the taxpayer’s expense to support the private sector and encourage economic growth.

The final point is particularly alarming as government was prioritizing the needs of the private sector over taxpayers. Privatization is often sold by politicians as being more efficient and a way to save taxpayer money, but in reality it’s usually the opposite. We encourage all New Brunswickers to read the Auditor General’s report. We also encourage all of our politicians to do the same.

Elected officials often pay lip service to basing decisions on sound analysis and facts, but often do the exact opposite. Privatization has become a costly reality in our province. The public service is qualified and competent to do the jobs that have been outsourced, it’s time our politicians recognized this and stop lining the private sector’s pockets for below par work.