Has Brad Wall been playing a SaskTel privatization long game?
Province by Evan Radford
To privatize or not to privatize — is that the question?
It isn’t, at least according to Saskatchewan Premier Brad Wall, who says his government has no plans to privatize SaskTel. But if we follow our provincial government’s history over the last 10 years, Wall and co. have been much less nuanced on the privatization question than was the bard on the question of revenge.
The past is a good place to look for evidence that, in fact, the Saskatchewan Party has a certain fondness for privatizing Saskatchewan’s Crown corporations — or at least its publicly-held services and assets.
The topic came up in early May when telecom giant Bell Canada Enterprises bought Manitoba Telecom Services (MTS).
MTS was privatized under Manitoba’s Progressive Conservative premier Gary Filmon in 1996 (Filmon later sat on the MTS board, retiring in 2015).
Jim Reiter, Wall’s Minister For SaskTel, said the sale makes SaskTel an outlier: it’s now the only regional telecom in western Canada.
That prompted the company’s board of directors to do “a review of the impacts and risk that the MTS acquisition may have for SaskTel,” according to spokeswoman Michelle Englot.
“We are currently in the process of securing an expert third party to complete the review,” she says.
Those results will come in June.
Meanwhile, Brad Wall brought the topic up again with reporters before the throne speech was delivered. According to a May 17 Leader-Post story by reporter David Fraser, Wall said there are no plans to privatize SaskTel because his party didn’t campaign on it, and because of current legislation.
But he floated the idea of a provincial referendum on the matter, if the appetite was strong enough for it.
“Maybe that’s a discussion Saskatchewan people want to have,” Wall said in the L-P. “If it was something Saskatchewan people, we thought, really wanted to at least talk about, there is the idea of a provincial referendum.”
Appetite For Privatization
As Wall often said during the recent provincial election campaign: his party’s record speaks for itself.
So what is that record?
According to an October 2015 report by the Saskatchewan office of the Canadian Centre for Policy Alternatives, the government and its Crowns have sold 16 different publicly-held investments, shares or stakes since 2008. Included in that number is the sale of Information Services Corporation in November 2012.
Some of those assets were sold in accordance with the government’s Saskatchewan First policy, announced in 2008. It sought to divest Crowns like SaskEnergy and SaskTel of their out-of-province assets, and focus on investing within Saskatchewan.
Exceptions were granted if out-of-province investments supported in-province operations, according to the report.
Add to those sales a seventeenth privatization effort: shifting 40 of the province’s liquor stores out of the public’s hands and into the private sector, announced last November.
When it comes to outsourcing public goods or services to the private sector, the government has done so 23 different times since 2008 under the Saskatchewan Party, according to the CCPA.
Some of those include: outsourcing correctional centre food services; transferring control of livestock brand inspection services from the Ministry of Agriculture to an industry-led, non-profit corporation; contracting Ministry of Highways engineering services work out to private consultants; and merging the Milk Control Board with the Dairy Farmers of Saskatchewan to form the industry-run marketing board SaskMilk.
Last but not least are the four big P3 (public-private partnership) projects: a long-term care facility in Swift Current, nine join-use elementary schools in Regina, Saskatoon, Martensville and Warman, a North Battleford mental health and correctional centre, and the Regina bypass highway project.
According to Simon Enoch, the director of the Saskatchewan CCPA office, the government’s privatization efforts have been incremental up until now.
“I think what we’ve seen is a change in the Sask. Party’s approach to privatization,” he says, noting that during its past two mandates, the party took an incremental approach.
But now, especially after the party’s majority election win on April 4, it has taken a bolder approach to making a case for what can be privatized, he says. The 40 SLGA stores is one example Enoch cites.
“They believe they’ve brought the public along to a place where they can make the case for the privatization of a major Crown. And this is what we’re seeing,” he says, referring to this month’s talk of potentially privatizing SaskTel.
“[The party’s] trying to cloak [privatization] in, ‘we ran on this, but if this review recommends that that’s the way to go, we’ll consult the Saskatchewan people,’” Enoch says.
If SaskTel was to be sold off, he says it would likely be pitched to the public as a $2 billion windfall, albeit a one-off.
That type of rhetoric might emerge with the provincial budget dropping in early June, especially with all signs pointing to a deficit.
“If the government really gets hysterical about the debt — as other governments have — then I think we’ll see a shift to ‘we have to deal with this deficit. Here’s this asset that could really help us if we sold it,’” Enoch says.
What won’t be made so explicit is the fact that such a sale would move the company out of public ownership into the hands of private shareholders, stopping any future dividends that would come back to the province.
There’s also the telecom’s mandate to serve the people of Saskatchewan with phone service, especially in remote communities.
“The whole reason SaskTel was created was because the private sector wasn’t interested in delivering service to low-profitable or non-profitable areas of the province,” he said. “We’ve built this infrastructure, and now we have the private sector interested, because it obviously doesn’t have to build it from scratch.
“The public socialized the cost, and now we’re going to hand over this incredible infrastructure to the private sector for a one-time payout.”
NDP Critic for SaskTel Warren McCall agrees, noting that as a publicly-owned entity, SaskTel has a “public mandate.”
“It’s there to serve the people of Saskatchewan first and foremost,” he says.
He also notes that Brad Wall has “a personal connection to this file, going back to the 1980s Grant Devine era.”
“I think one of the lessons that Wall (and former Devine-era conservatives) learned was that you can’t be straightforward with people of Saskatchewan when it comes to the question of privatization,” McCall says.
A spokeswoman for the government and Brad Wall did not respond to questions for this story.