Report says contracting public infrastructure hurts transparency

The Parkland Institute released a report on April 18 finding the provincial government’s increasing trend of contacting out infrastructure projects to private companies has negatively impacted the transparency and accountability over the spending of taxpayer dollars.

Outsourcing of government contracts to private companies has skyrocketed in recent years. Payments made to the five largest contracts increased from $6.3 million to $64 million between 2006 and 2009.

Contracts with private companies have far less stringent requirements on releasing information about how the funds are used making it nearly impossible to monitor exactly how government funds are being spent.

“Access to the total amounts of the contracts and the name of companies the contract’s had been made with are accessible but the actual details of the contracts were denied to us under Section 16 and 19 of the Freedom of Information and Protection of Privacy Act” says Diana Gibson of the Parkland Institute. “These fall below the international standards of transparency.”

The government uses these clauses to protect the confidentiality of the companies. Private companies often require these clauses prior to entering into contracts on the grounds of preserving competitive advantages over rival companies.

The study found that the outsourcing of contracts to the private sector also negatively impacts the quality of services being performed.

For example Gibson says “We were not meeting our targets provincially on the quality of the public building stock in terms of maintenance and after they (private contractors) were exempt from the metrics the metrics dramatically improved.”

The report uses the recent troubles of SNC-Lavalin as an example of the potential dangers associated with the lack of transparency of private company funds. SNC-Lavalin is one of the largest property management firms contracted by the provincial government.

An executive with the company recently resigned after allegations surfaced of the company using funds to support the Gadhafi regime in the Libyan civil war and bribing government officials in Bangladesh to secure lucrative contracts.

The study concludes with a call for a moratorium on further expansion of private contacts until a cost-benefit analysis can be conducted and made public.