Here’s a fun little economic history lesson they don’t teach you in business school: every time politicians promise that privatizing public services will save taxpayers money, reduce debt, and unleash the magic of market efficiency, they’re lying. Not mistaken. Not optimistic. Lying. And we have forty years of data from both sides of the border to prove it.

Ronald Reagan kicked off the privatization party in the 1980s with promises that slashing taxes on the wealthy, deregulating industries, and unleashing the private sector would supercharge the economy and pay for itself. The national debt tripled from $997.9 billion in 1981 to $2.9 trillion in 1989, an increase of 186.4%. Privately held federal debt jumped from 22.3% of GDP to 38.1%. So much for fiscal responsibility.

But hey, maybe it worked, right? Maybe all that trickle down economics created prosperity for everyone? Not quite. Income inequality grew and accelerated in the 1980s, the savings rate collapsed, and the savings and loan crisis, partly caused by deregulated financial markets, added about $125 billion in debt that taxpayers had to cover. The promised balanced budget never materialized. The economic boom went to the top while everyone else got debt and a lecture about belt tightening.

Fast forward to Donald Trump, who apparently learned nothing except how to make the grift bigger. The national debt rose by almost $7.8 trillion during Trump’s time in office, and that was more than 43 presidents had combined to accumulate during the first 216 years of the Republic. His 2017 tax cuts, heavily weighted toward corporations and the wealthy, blew a hole in federal revenue while promising growth would make up the difference. Spoiler: it didn’t. Government revenues did not compensate for the cut in taxes. That’s why we ended the 1980s with a huge deficit, and the exact same thing happened under Trump.

Now Trump’s back for round two, and the Congressional Budget Office estimates his “One Big Beautiful Bill Act” will add $3 trillion to the deficit between 2025 and 2034. The pattern is so consistent it’s almost boring. Cut taxes on the rich. Promise growth will pay for it. Watch debt explode. Blame social spending and unions. Repeat.

**The Canadian Privatization Disaster Tour**

If you think Americans have a monopoly on bad privatization decisions, let me introduce you to Ontario’s greatest hits.

**Highway 407: The Gift That Keeps on Taking**

In 1999, the Mike Harris government leased Highway 407 to a private consortium for a flat fee of $3.1 billion. The highway cost an estimated $1.5 billion to build with tax dollars and was expected to be paid for through tolls within 30 years, after which it would become free. Sweet deal, right? For the consortium, absolutely. The lease gave them the profits from the toll highway for 99 years and the right to raise tolls at will.

By 2010, the Canada Pension Plan Investment Board purchased a 10% stake in the 407 for $894 million, suggesting the total value was $8.94 billion. That dramatic increase in value went straight to private investors instead of the people of Ontario. Taxpayers built it, private companies profit from it for a century, and we get to pay extortionate tolls for the privilege. Efficiency!

**Hydro One: How to Lose Half a Billion Dollars Per Year**

Ontario’s Hydro One privatization is a masterclass in how to screw the public while claiming you’re helping them. Hydro One makes a whopping $750 million profit every year, much of which would be lost in the event of the sale. The Financial Accountability Office predicted the loss of revenue would be between $300-500 million every year. That’s half a billion dollars less for schools, hospitals, and infrastructure, redirected straight into the pockets of Bay Street investors.

And did rates go down? Nova Scotia, which privatized its electricity system, now has the highest rates in Canada. A poll showed 76% of Ontarians believe selling Hydro One will drive up the price of electricity, and they’re probably right. Private investors borrow money to buy public assets, then pass those financing costs onto consumers in the form of higher rates. That’s not efficiency. That’s wealth extraction dressed up as modernization.

**Healthcare: The Slow Motion Catastrophe**

Ontario’s healthcare privatization follows the standard playbook. Underfund the public system until it starts to fail. Point to the failures as proof that public doesn’t work. Propose privatization as the solution. Ignore all evidence that private delivery costs more and delivers less.

For-profit clinics charge prices often up to five times higher than OHIP costs. They extra-bill illegally under the Canada Health Act. They take profits by selling patients unneeded tests and add-ons. And despite claims that privatization will clear surgical backlogs, the Ford government has underspent the health care budget by $1.25 billion, even while patients are waiting, emergency departments are closing, and nurses are leaving by the thousands.

The operating rooms already exist in public hospitals. They’re closed evenings and weekends due to underfunding, not because private clinics are needed. Privatization isn’t solving a capacity problem. It’s creating a profit opportunity while public infrastructure sits idle.

**The Walkerton Water Tragedy**

Want to know what happens when you privatize essential public services? The Public Inquiry into the Walkerton water tragedy that killed seven and sickened 2,300 people found a link between the tragedy and the closure of government lab services for municipalities, which resulted in turning to private labs for water testing. When government labs did the testing, they reported adverse results to health officials and the Ministry of Environment as standard procedure. Private labs didn’t have the same accountability. People died.

That’s not an outlier. That’s the blueprint. Cut public services. Replace them with private contractors who cut corners to maximize profit. Watch quality decline. Blame everyone except the people who made the decision to privatize in the first place.

**The Math Doesn’t Math**

Here’s the fundamental contradiction at the heart of every privatization pitch: private companies need to make a profit. That profit has to come from somewhere. It comes from either charging more, paying workers less, or cutting service quality. Usually all three.

When a public service breaks even or operates at a small loss while serving everyone equally, privatization doesn’t magically make it profitable. It just shifts who pays and who benefits. Costs go up for users. Service degrades for anyone who isn’t profitable to serve. Workers get casualized into gig jobs with no benefits. And profits flow to shareholders who contributed nothing to building the infrastructure in the first place.

Reagan promised his tax cuts would increase revenue through growth. The deficit in Reagan’s last budget was still 2.9% of GDP despite a record peacetime expansion. Trump promised the same thing. The combination of Trump’s 2017 tax cut and lack of spending restraint helped both the deficit and debt soar. Ontario promised Highway 407 privatization would improve transportation and reduce traffic. Twenty years later, Toronto has the worst traffic in North America and we’re paying the highest tolls to a private consortium that answers to no one.

The promises are always the same. The results are always the same. And somehow, we keep falling for it.

**Who Actually Wins?**

Follow the money. Reagan’s tax cuts overwhelmingly benefited the wealthy while social programs were cut, disproportionately affecting the poor and vulnerable. Trump’s 2017 tax cuts were structured so the top 1% would receive 83% of the benefit by 2027. Highway 407’s value went from $3.1 billion to $8.94 billion in a decade, with all that appreciation going to private investors instead of Ontarians. Hydro One’s $750 million annual profit now gets diverted to shareholders instead of funding public services.

Privatization is a wealth transfer from the public to the private, from workers to executives, from citizens to shareholders. It’s not about efficiency or innovation or saving taxpayer money. It’s about converting public assets into private profit streams, and the people selling you on it are either getting rich from the deal or too propagandized to notice they’re getting robbed.

**The Social Cost**

The economic damage is bad enough. The social cost is worse. Privatization doesn’t just make services more expensive. It makes them less accessible. Private companies don’t serve unprofitable communities. They don’t maintain universal access. They optimize for shareholder returns, not public benefit.

Ontario healthcare privatization would erode wages, safety, and community access. Rural Ontarians lose affordable hydro service when private companies decide it’s not worth maintaining infrastructure in sparsely populated areas. Small towns lose water safety when private labs aren’t accountable to public health officials. Workers lose stable jobs with benefits when public services get converted to gig work and contracting.

Every privatization makes society a little less equal, a little less cohesive, a little more segregated between those who can afford premium service and those who can’t. That’s not a bug. That’s the feature. The whole point of privatization is to let those with money opt out of shared systems, leaving everyone else with degraded service and rising costs.

**Why We Keep Falling For It**

The privatization pitch is seductive because it promises something for nothing. Lower taxes and better service. Reduced debt and improved infrastructure. Market efficiency and expanded access. It’s all bullsh**, but it sounds good if you don’t look too closely at the track record.

Politicians love privatization because it lets them claim they’re addressing problems without raising taxes or admitting they’ve underfunded public services. Media loves it because “government waste” and “market innovation” are easy narratives that don’t require investigating who actually benefits. And corporations love it because it converts public assets they didn’t build into profit centers they control.

The public loses every time, but we’re told to blame unions, bureaucrats, and inefficiency instead of the people engineering the transfer. It’s the greatest con in modern economic history, and it’s been running for forty years with barely any pushback.

**The Takeaway**

If someone tells you privatization will save money, ask them why Reagan tripled the national debt. If they say deregulation creates prosperity, ask them about the savings and loan crisis or the 2008 financial collapse. If they claim private companies are more efficient, ask them why Highway 407 is the most expensive toll road in the world and why Hydro One customers pay more after privatization. If they promise tax cuts will pay for themselves, ask them why Trump added $8 trillion to the debt and is on track to add trillions more.

The evidence is overwhelming. Privatization enriches the wealthy while making everyone else poorer. It increases costs, reduces access, degrades quality, and transfers public wealth into private hands. It doesn’t balance budgets. It explodes debt while cutting services. It doesn’t create efficiency. It creates profit for a few at the expense of the many.

Forty years of failure should be enough to learn the lesson. Stop believing the con. Public services exist because the market won’t provide them equitably. Privatization doesn’t fix that. It just makes it worse while extracting wealth in the process.

The next time a politician promises privatization will solve your problems, remember: they’re either lying or they haven’t been paying attention to the last four decades. Either way, don’t believe them.


🏛️💰🇨🇦The Privatization Con: How Forty Years of Selling Off Public Assets Made Everyone Poorer (Except the Rich)🏛️ 💸🇺🇸