Imagine a world where the government builds your home, arranges your mortgage, sells you drugs and makes electric cars.
Sound like somewhere you would want live?
This is the postcapitalist utopia envisaged by writer Linda McQuaig in her new book, The Sport and Prey of Capitalists: How the Rich are Stealing Canada’s Public Wealth.
“Public ownership is a potentially powerful, transformative vehicle for national development, and Canada has a long history of using it wisely and effectively to advance the broad public ownership,” Ms. McQuaig writes.
The book looks back nostalgically at past government forays into such businesses as vaccines (Connaught Laboratories), railroads (Canadian National Railway) and oil (Petro-Canada).
She points to these ventures as examples of what Ottawa and the provinces should do a lot more of in the future.
“We have foolishly sold off impressive and innovative parts of our public heritage,” she writes.
So Ms. McQuaig would roll back the clock. Canada Post would get into the banking business, making loans and taking deposits through post offices across the country. Ottawa, or perhaps Ontario, would nationalize General Motors’ recently shuttered vehicle-assembly plant in Oshawa, Ont., and use it to produce green products such as electric vehicles and solar panels. And Ottawa would start producing generic pharmaceuticals.
A crucial flaw in this little narrative is that for every government success story, there are a slew of ill-fated escapades and white elephants that most Canadians would rather forget.
Governments are just as prone to failure as businesses are – perhaps more so. After all, they don’t have to worry about faster, better or cheaper competitors stealing market share. Governments are also more likely to let optics and political considerations get in the way of sound business decisions.
Canada is littered with bungled government ventures. Think of the Muskrat Falls hydroelectric project, which will saddle the people of Newfoundland and Labrador with Canada’s highest electricity rates for decades to come. Or Mirabel, Montreal’s one-time airport of the future, which is now a sparsely used cargo hub that flew its last commercial passengers in 2004.
The anti-business theme does play into the global mood. A majority of people around the world apparently have a grim view of capitalism, according to polling data released this month by from Edelman, a U.S. public-relations firm.
Fifty-six per cent of 34,000 people polled in 28 countries – from the United States and Canada to China and Russia – agree that “capitalism as it exists today does more harm than good in the world.”
But Ms. McQuaig wrongly concludes that people are ready to let government run just about everything. Those polled were significantly more trustful of businesses (55 per cent) and chief executive officers (51 per cent) than of governments (47 per cent) and politicians (42 per cent), according to Edelman.
In Canada, the federal government’s track record delivering big projects, on time and on budget, isn’t good. That should be a cautionary tale, not a reason for more of the same.
Of course, the private sector is not necessarily better at everything. Canadians have good reason to be skeptical about many recent public-private partnerships (P3s). The City of Ottawa’s troubled new LRT system is a prime example of what can go wrong. And yet governments across Canada have embraced P3s, particularly for building infrastructure, seeing them as way to limit financial exposure and avoid cost overruns.
Instead, as Ms. McQuaig rightly points out, governments often end up paying more and getting less when they shift risk to private-sector partners, who must generate profits while borrowing at higher interest rates than governments face.
Unfortunately, that kind of reasoned analysis is drowned out by her rant against businesses and everything they touch.
Somewhat awkwardly, Ms. McQuaig opens the book with an attack on one of the federal government’s largest nationalization projects in decades – the $4.5-billion purchase of the Edmonton-to-Burnaby, B.C., Trans Mountain oil pipeline, along with a multibillion-dollar project to triple its capacity. She argues the pipeline expansion is not in the national interest because of its impact on greenhouse gas emissions and First Nations.
Fine. But Ottawa is expected to transfer ownership of Trans Mountain to a coalition of Indigenous groups, muddying the story.
Government forays into private-sector activities are neither inherently good, nor bad. They merely reflect the ambitions of the government of the day.
And that’s a more nuanced picture than Ms. McQuaig would have us all believe.