Owner of privatized Ontario highway involved in unsafe P3 schools

It's not just the fact that Highway 407 and 17 schools in Edinburgh, Scotland recently closed for safety reasons were privatized that links them together. It's the fact that in both privatization schemes, Ferrovial, a multinational company involved in the design, construction, financing, operation and maintenance of transport, urban and services infrastructure is a key player.

In Ontario, Ferrovial has a 99-year lease for Highway 407 north of Toronto. Since privatization, tolls have increased rapidly.

Ferrovial's subsidiary Amey is also a key player in the consortium that built 17 schools through a P3 privatization scheme in Edinburgh, Scotland. These schools were closed for safety reasons after the wall at one school collapsed. The closure affected 7,600 students. Ten days after the closure, 13 of the schools are still closed.

Privatization an international disaster

As we have seen time and again, privatization problems don’t respect national boundaries. As Canadian governments imported different methods of privatization from other countries, the problems came too.

Privatization profits going to tax havens

To add insult to injury, two of the companies holding shares in Edinburgh Schools Partnership Ltd. are using tax havens to avoid paying taxes on the profits they’ve made on the schools. Both companies are investment funds. Owners of these funds are based in Luxemburg and Jersey respectively. Both places are notorious tax havens.

Canadians aren’t allowed to find out if privatization profits are going to tax havens

But, at least the British can find out if companies profiting from privatization are using tax havens to avoid paying their fair share of taxes. Because Canada's laws on beneficial ownership are so weak, we have no way of finding out. Beneficial ownership requires reporting the identity of who gets the profits. Without these laws, it is possible for companies and individuals to use tax avoidance measures, like shell companies, to hide their identities. This was the strategy used by those whose activities were revealed in the Panama Papers leak.

But Canada has very weak laws on beneficial ownership. Transparency International gives Canada a 0 per cent and 14 per cent for two key measures. These are for collecting information on beneficial ownership and for allowing those investigating tax evasion or money laundering to access the information respectively.

We deserve better

What unsafe privatized schools in Edinburgh and an expensive privatized highway in Ontario also have in common is that both outcomes should be unacceptable. People depend on public services and should be able to count on affordable, quality public services being there when they need them. That isn’t happening with privatization. 

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