Wage subsidy program biased in favour of privatized services

Ottawa (10 March 2021) — According to information on the CEWS Registry, companies profiting from privatization are among those receiving the Canada Emergency Wage Subsidy (CEWS). Among the CEWS recipients are companies involved in privatizing health care, liquor sales, child care and transit services. 

However, identical publicly owned services are unable to get help from CEWS.

"While it may not have been what the federal government intended, the way CEWS is set up effectively subsidizes privatization," said Bert Blundon, Secretary-Treasurer of the National Union of Public and General Employees (NUPGE). 

CEWS treats publicly owned services unfairly

The problem is not that federal money is being used to support workers delivering publicly funded services. CEWS is meant as a temporary program to keep layoffs to a minimum, and trying to address larger problems when designing it would not have been practical. But what is a very serious issue is that publicly owned services are being excluded, while privatized services are getting help. 

For-profit clinics at the centre of an attack on Medicare are receiving subsidies

Among the businesses receiving subsidies through CEWS are the Cambie Surgeries Corporation and the Specialist Referral Clinic. These clinics are run by Brian Day. It was an audit of extra billing and double billing at these clinics that led to Brian Day’s legal challenge to Medicare

While public hospitals are ineligible for support from CEWS, private for-profit clinics are getting subsidies.

Ironically, Brian Day has tried to claim that allowing privatized health care will take the pressure off the public health care system. But the CEWS payments his clinics received show the public is still having to pay. The only difference is that, instead of subsidizing public health care, we’re subsidizing a for-profit service where people can buy their way to the front of the line.

Private colleges and universities get help, while public ones excluded

According to the CEWS registry, large numbers of private colleges and universities have received funding. But while hundreds of private colleges and universities are able to get help from CEWS, public colleges and universities are not. 

This has the potential to shortchange students.

Research showing that students at private colleges have more trouble getting jobs and more difficulty repaying student loans suggests that the quality of education private colleges provide is inferior to what public colleges provide. There have also been concerns about unethical recruitment practices by private colleges. Among the private colleges getting help are 3 that were named in a Globe and Mail article on recruiting students from overseas with false claims.  

For-profit child care also being subsidized

For-profit child care companies are also among those receiving CEWS funding. This includes centres with some of the largest for-profit chains in the country like Busy Bees and Kids & Company. Research has shown that publicly owned child care centres provide better care than for-profit ones, but they are excluded from CEWS.

Argument for excluding public services from CEWS based on false assumption

The argument for excluding public services from CEWS is that they receive funding from other levels of government. But that ignores the fact that so do many privatized services. 

Transit services in the Greater Toronto Area provide a good illustration. In both the City of Toronto and York region, governments provide much of the funding for public transit. However, the for-profit companies operating the privatized transit services in York Region are receiving subsidies, while the publicly run Toronto Transit Commission is ineligible for help from CEWS. What makes this situation all the more ridiculous is that, historically, the TTC has been less dependent on funding from municipal and provincial governments than York Regional Transit. 

Federal govt. needs to end preferential treatment for privatization

"When companies running privatized services that rely on public funding are receiving CEWS, it makes no sense to exclude public sector employers providing similar or identical services," said Blundon.

"Excluding public sector employers is effectively subsidizing privatization. Given the serious problems with privatization, that is not in the public interest."

While its reasonable for the federal government to prevent CEWS from being used to replace funding from provincial, territorial or municipal governments, this could have been done by making assistance conditional on there being no drop in funding from other levels of government. This suggestion was made by the National Union in our submission to the Canada Emergency Wage Subsidy Consultation last year.

In addition to ensuring public services are treated fairly, such a move would have discouraged provincial, territorial and municipal governments from pursuing austerity policies. 

Unfortunately, the federal government did not act on that suggestion, and, as the information from the CEWS Registry shows, the program is effectively subsidizing privatization.

 

 


NUPGE

The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 390,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. — NUPGE