Fallout from Klein Government mismanagement two decades ago drifts in on the winds of the Carillion collapse

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PHOTOS: Winter driving in Alberta (Photo: Wikimedia Commons). Below: Alberta Transportation Minister Brian Mason and Opposition Transportation Critic Wayne Drysdale.

That Carillion bankruptcy … did it ring any bells with you? It certainly should have.

The spectacular collapse of the U.K. construction giant Carillion PLC has not just shaken the British government, it’s rattled other regional and national governments around the globe who will be left holding the bag for many of the multinational corporation’s contracts for essential services.

Among them, hospitals, P3s and highway maintenance in Ontario, transmission lines in British Columbia, and 14,000 kilometres of highways throughout Alberta that Carillon Canada is supposed to maintain. It being wintertime, and snow in the forecast lots of places, this is an essential service if ever there was one!

Of the company’s 43,000 employees worldwide, about 6,000 of them are here in Canada.

The British Government faces multiple challenges as a result of the “parastatal” corporation running up more than $1.35 billion US in debt that it couldn’t pay back when many of its contracts turned out to be losers. The bankruptcy brings the possibility of up to 20,000 British workers losing their jobs, pension funds collapsing and, possibly worst of all, a multitude of contracted-out government services grinding to a halt.

According to the New York Times – whose reporter seemed to be astonished there was even a debate in Britain about privatization not being generally a good thing – Carillion was running everything from school lunch programs to prisons to hospitals to parts of the country’s electronic spy agency. Some 450 government contracts in all, says the Guardian.

So when Carillion fell, forced into compulsory liquidation on Jan. 15, the U.K. government faced having to … act like a government! This certainly goes against the grain for the direct political descendants of the pirates of privatization led by the prime minister Margaret Thatcher.

Just to restate the obvious, this is why essential government jobs belong in the public sector – which consistently does them better, cheaper and more fairly, notwithstanding the relentless diet of propaganda about the alleged benefits of privatization and “public-private partnerships,” in which the public is left holding the bag if anything goes wrong, that we’ve been fed for decades.

As for those bells – the memory kind, not the kind you hear in an evocatively onomatopoetic carrilon in a place like Parliament Hill – cast your mind back to the mid-Zeroes in Alberta, when Ralph Klein was premier, Steve West was his dean of destruction in the provincial government, and we had all swallowed the purple privatization Kool-Aid.

In 1995 and 1996, back when Mr. Klein was doing his best to destroy public services throughout the province as quickly and as thoroughly as possible, his government decided to privatize and outsource the maintenance of Alberta’s primary highways.

How did that work out? Well, we don’t really know. When the government hired the expensive international consulting firm KPMG to do a positive report in 1997, a year after the damage was done, the consultants demurred, concluding it was too soon after the change to compare the cost and services delivered by private-sector contractors and their government employee predecessors. The anecdotal consensus among winter drivers was that conditions on Alberta highways had gotten worse.

In 2003, the Alberta Union of Provincial Employees tried to answer the same question by asking the Parkland Institute at the University of Alberta to look into it. Again, no soap.

As Lisa Prescott, author of the Parkland study, put it: “The re-organization of government ministries or their reporting and accounting practices should be accompanied by a document clearly outlining the nature of the re-organization and the steps necessary to make pre- and post-reorganizational comparisons.”

Say what? The suspicion at the time, a reasonable conclusion based on the (missing) evidence, is that someone in the Klein Government took measures to make damned sure the two systems couldn’t be compared because the comparison wouldn’t deliver the ideologically correct answer required by the market fundamentalists who ran the Conservative Party then, just as they do now.

Can this assertion be proven? Of course not. This evidence has vanished.

Meanwhile, back in present, Carillion Canada, the U.K. company’s Canadian subsidiary, is said to be plugging along here in the Great White North while things fall apart back on the Sceptered Isle.

However, that assurance from the subsidiary’s Canadian spokesperson was not actually all that reassuring. Cody Johnston told the CBC that “the Canadian leadership team is looking at how to ensure continuity.” Great! One hopes they’ll let us know if they come up with something.

Meanwhile, on the 43 per cent of Alberta’s wintry highways that Carillion is nowadays responsible for keeping in operation, everything’s just peachy … for the moment.

Speaking of coming up with something, Transportation Minister Brian Mason says the NDP Government is working on a back-up plan of its own, although it won’t be taking highway maintenance services back in house where they belong. Under the circumstances, sadly, this makes sense, because the Klein Government sold off the essential infrastructure for a song in 1996.

The Alberta Roadbuilders and Heavy Construction Association says its members are ready to pitch in – for a price, of course –a good deal for which Saskatchewan plates on their vehicles won’t be required.

Meanwhile, the United Conservative Party Opposition issued a news release in which Transportation Critic Wayne Drysdale was quoted huffing that “the collapse of one of Alberta’s major highway maintenance contractors is deeply concerning, especially in the middle of winter.”

Well, no one is going to argue with that, least of all Mr. Mason, I imagine.

Mr. Drysdale can’t really be blamed for what happened under Mr. Klein in 1996. He didn’t get elected till 2008, after all, and while he was transportation minister for a few months in 2015, the premier who gave him the job, Jim Prentice, wasn’t in office long enough to do much damage.

Still, it takes a certain chutzpah to come up with something like that news release when you consider who caused the problem in the first place, and who constantly sings the praises of the government that did the damage – to wit, in this order, Ralph Klein and Opposition Leader Jason Kenney.

Carillion in Alberta, the Facts
  • Carillion Canada first won a Government of Alberta highway maintenance contract in 2006, a decade after the system was privatized. It has been part of the contracted-out highway maintenance system since then.
  • Carillion currently has three contracts covering 12 of Alberta’s 30 current Contract Maintenance Areas.
  • This translates to 43 per cent of the province’s highways by road length and 40 per cent of the work by total annual value.
  • Carillion Canada’s three contracts are:
  • It is in Year 8 of a $36.8 million contract originally signed as a six-year contract. This contract was extended for an additional two years and is scheduled to end on July 31, 2019.
  • It is in Year 5 of a $19.3-million 10-year contract.
  • It is in Year 4 of a $40.6-million 10-year contract.
Categories Alberta Politics