This Magazine

Progressive politics, ideas & culture

September-October 2016

It’s time to stop running government like a business

Start running them like they're, well, governments

Craig Saunders@CraigSaunders

ThisMagazine50_coverLores-minFor our special 50th anniversary issue, Canada’s brightest, boldest, and most rebellious thinkers, doers, and creators share their best big ideas. Through ideas macro and micro, radical and everyday, we present 50 essays, think pieces, and calls to action. Picture: plans for sustainable food systems, radical legislation, revolutionary health care, a greener planet, Indigenous self-government, vibrant cities, safe spaces, peaceful collaboration, and more—we encouraged our writers to dream big, to hope, and to courageously share their ideas and wish lists for our collective better future. Here’s to another 50 years!

In the cocaine-tinted days of shoulder pads and synth pop, urban professionalism propelled a mantra of “run government like a business.” The 1980s were a reactionary rebellion against what was seen as government inefficiency, and a terrible idea from which we’ve never recovered.

At the time, I was a teenager working my first job as a cook at a family restaurant in suburban Ontario and wondering about the future amidst daily headlines such as “13,000 face temporary layoff at GM,” “Shutdowns affect 835 employees at IPSCO units,” and “Half of head office staff at Kidd Creek lose jobs.” Those were all from just one day in 1986. The mid-’80s had record unemployment in Canada—around 11 percent when I got that steak cook job for three bucks an hour, and down a bit from when it broke 13 percent a year or two earlier. (By contrast, it’s about seven percent today.)

That’s the first reason not to run government like a business: Businesses are focused on profit regardless of the human cost. The second reason is that business isn’t necessarily a good model, even for businesses.

According to Industry Canada, 83,240 small and medium enterprises disappeared in 2013. And that was a good year. Thousands of companies go belly-up every year because their primary objective is to turn a profit, and higher risk breeds higher profits. Governments should not participate in such high-risk behaviours. They should provide stable, long-term services that a community needs. And therein lies the most fundamental reason why we need to stop running governments like businesses: They exist for different reasons.

Like many of my generation, I headed west during the 1991 recession. I landed in Alberta, which was still reeling from the late-’80s oil bust. As I took piecework jobs on construction crews, or stood on “Workers’ Corner” hoping for landscaping gigs to pay for groceries, many of my neighbours were clinically depressed. I visited them at Holy Cross Hospital because of their suicidal feelings or, on occasion, suicide attempts.

Then Ralph Klein’s cuts pushed the hand of the hospital’s directors, who took a “run it like a business” decision and closed the downtown hospital and its psychiatric ward, making a distant suburban hospital the nearest facility—abandoning the city’s most vulnerable residents.

Every city has stories like this.

In Ontario, where I live today, corporate taxes are at a record low thanks to a decade of cuts. Toronto has some of the lowest property taxes anywhere. Windsor has frozen property taxes for nearly a decade. There’s room to restore services if we believe that serving the people should be the priority of a government, rather than turning a quick budget buck.

And the quick budget buck is very much the latest trend in running government like a business. It began with public-private partnerships (P3s). They were supposed to take advantage of the efficient ways in which businesses operate, unlike sluggish, bloated governments. After a couple decades of tragedies, we know businesslike greed outweighs any inefficiency our governments may once have had. Ontario famously has the most expensive toll road in the world because of a ridiculous P3 contract.

P3s are popular with governments because they transfer up-front costs off the balance sheet and appear to shift risk to the private sector. That is not, as a recent University of Calgary School of Public Policy paper reveals, the reality. The Golden Ears Bridge in B.C., for instance, came in 25 percent above initial estimates. The cost of Kelowna’s W.R. Bennett Bridge jumped 44 percent. A rapid-transit line in Vancouver went from $1.35 billion to $2.1 billion. In fact, most P3 projects only come in on schedule and on budget because the schedules and budgets get adjusted along the way.

And now Canadian governments are in the throes of just handing public assets over to the private sector for short-term gain. These actions do nothing more than hide a deficit on the government’s balance sheet until after the next election. As with P3s, it’s not really about benefiting the public; it’s about political expediency.

Stop running governments like they’re businesses. Start running them like, well, governments.

Illustration by Matthew Daley

Craig Saunders was a Toronto journalist and editor until he discovered the exciting world of labour communications.

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