Government cost savings estimates overstated

TORONTO – Ontario taxpayers could be saddled with $585 million in higher costs due to the provincial government’s decision to let private sector bidders oversee 14 hospital projects, says a study by the Canadian Centre for Policy Alternatives (CCPA) and the Registered Nurses’ Association of Ontario (RNAO).

The study examines the province’s claim that alternative financing and procurement (AFP) deals with the private sector, will save the public purse $341 million. The study concludes that this prediction is, at best, optimistic.

“When you take a close look at the province’s numbers, they seem to be based on some very optimistic assumptions about the benefits of AFPs and these assumptions don’t line up with what we know about these kinds of deals,” says study author Sheila Block, Director of Nursing and Health Policy with RNAO and a Research Associate with the CCPA, adding that “AFPs are another name for P3s.”

The study looked at 14 Ontario hospital infrastructure projects, including Sarnia, North Bay and Sudbury and found a lot of holes in the provincial government’s cost assessment methodology. It concludes there is too much missing information to firmly say whether the government will save or lose money on the deals, but recommends the provincial auditor look into the matter.

RNAO’s Executive Director Doris Grinspun says the study confirms the association’s belief that these deals are not designed with the patient in mind. 

“It’s clear these arrangements not only might end up costing tax payers a lot more, but also will reduce public control over hospitals and transfer it to for-profit consortiums, weakening the health-care system.” Grinspun says. “We are urging a full disclosure of the financial deals of AFPs and we ask that the provincial auditor step in to determine their value for money.”

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Click here to view the study.