Hon. Deborah Matthews

Ministry of Health and Long-Term Care

10th Floor, Hepburn Block

80 Grosvenor Street

Toronto, Ontario M7A 2C4

Open letter re: Sisters of Providence and the Kingston P3

Minister Matthews,

I am writing today in response to an answer I received during question period on the 29th of May this year. On the subject of the private public partnership you made the following statement:

“I’ve met with the Sisters of Providence. They are delighted that we’re moving forward with this. If it’s good enough for the Sisters of Providence, if the Sisters of Providence support this, then I am very proud to support it too.” Hansard, 29 May 2013

Madam Minister, as you know, the Sisters of Providence have steadfastly refused to be drawn into the debate on the Kingston hospital and the government’s decisions on how to fund it. Their official position is to make no comment “whatsoever” on the process and making any comments on their opinions amounts to a mistruth.

I encourage you to apologize to the Sisters of Providence and the people of Kingston for misrepresenting the opinions of such an important and dedicated group of stakeholders.

Sincerely,

France Gélinas MPP for Nickel Belt

Mathews apology to sisters PDF

On April 26, in the provincial legislature, in response to a question asking if the province will

“listen to the thousands more who want you to stop this wrong-headed P3 plan [for the new

Kingston hospital]?”, the Minster of Health, Deborah Mathews, said, “If it’s good enough for the Sisters of Providence, if the Sisters of Providence support this, then I am very proud to support it too.”

The problem is that the Sisters of Providence do not support the P3 proposal for the new hospital. The Sisters have steadfastly refused to be drawn into the debate. Their official position is to make no comment “what-so ever” on the process.

“The Minister of Health has placed the Sisters of Providence in a terrible position by threatening the future of the new hospital and then incorrectly using them. We abhor these tactics,” said Ross Sutherland, Chair of the Kingston Health Coalition. “The discussion on the new hospital should take place on facts and not misinformation. The government is relying on misinformation because the facts are that their P3-privatization will cost more, be less flexible and less accountable than a public hospital”.

“This is a democracy; we all should be able to speak our conscience and support our values free of intimidation. And, in Kingston, the public has overwhelmingly upheld the values of public non-profit health care based on compassion not private-profit-taking”.

“It is time for the government to listen to the residents of Kingston. They need to publicly fund our new hospital and ensure non-profit maintenance and management for the facility. The contract can still be changed without penalty. We will save tens of millions of dollars and enhance the democratic control and accountability of our new hospital”.

For more information contact:

Ross Sutherland,

613-532-7846,

613-374-5211,

elbe@web.ca

sister media release – PDF

We appreciate that you both took the time to attend Keep Our Hospitals Public events and took the time to look at the written information that we provided to Council.  We feel it is important to correct comments based on the article from the University of Toronto professors.

The study starts with a simple problem: the province pays 16% more for P3 hospitals that public hospitals: how can it justify this use of tax payer dollars.  The answer is that it would be justified if the risk transfer to private sector was of great value than the 16%.  You both were correct in pointing out this possible solution but it is not their conclusion as you stated.

The article then looks at whether the risk transfer justifies the extra cost and finds that due to lack of information provided by Infrastructure Ontario “it is not possible to assess key issues such as the cost of raising private finance, or the cost of transferring specific risks”. The article continues to be generally supportive of the short term design, build, finance models, like the KGH project, and critical of the long term finance and maintenance agreements, like the Providence Care project.

What their finding leaves us with is a simple statement that P3 hospitals cost 16% more.

We look forward to continuing the discussion on rebuilding health infrastructure and the municipal role in that process.

Yours sincerely, Ross Sutherland.

Kingston, Ontario – In a briefing hosted by the Health Coalition, Dr. John Lister a U.K. expert on P3s, recounted the shocking story of excessive profits, massive public debt and hospital insolvency as a result of the P3 program in the U.K.

The Health Coalition, which is holding a plebiscite (a referendum called by the citizens) on Saturday, April 13 to give an opportunity to Kingston residents to vote as to whether or not they want to allow the P3 privatization of their new psychiatric and rehabilitation hospital, warned that the British P3 disaster should serve as a wake-up call for Ontario’s politicians who generally have little knowledge about these schemes to which they have committed billions of Ontario residents’ dollars.

In a video briefing live from the U.K., Dr. John Lister cited a litany of problems in the British P3s.

“Private finance seemed like the solution to everything but it turned out to be a nightmare for the public and for those in the communities of the P3 hospital, who are left paying the consequences,” said Dr. John Lister, from Coventry University. “And this is for a generation to come, we have decades more of this to come.”

Key Facts and Quotes from the U.K.:

• “The current model of PFI [P3] is unsustainable. Thirty year contracts are inflexible and don’t allow managers to alter priorities or change services that have become outdated. We have seen evidence of excess profits being priced into projects from the start.” Margaret Hodge, MP, Chair of the Public Accounts Committee of the British Legislature.

• Some English hospitals are using up to 1/5 of their budgets servicing the debt costs to the P3 consortia, according to the Daily Telegraph.

• “I regret that contracts were signed that paid private sector costs when the public took the risk. That is indefensible.” Stephen Dorrell, Chair of the Health Select Committee of the Department of Health, U.K.

For more information:  Ross Sutherland 613-532-7846; Natalie Mehra 416-230-6402

By Peter Hendra, Kingston Whig-Standard

Friday, October 26, 2012 7:04:21 EDT PM

KINGSTON - The new hospital slated to be built in the city’s west end should eschew the current private funding model and instead be paid for by the Ontario government, an economist says.

As it stands now, the new hospital — which is to offer 270 beds, cost $350 million to build, and replace Providence Continuing Care’s St. Mary’s of the Lake Hospital — is to be financed through what is known as a public-private partnership, or P3.

The Ontario Health Coalition — and, by extension, the Kingston Health Coalition — has launched a campaign to have the provincial government disclose the full costs of building a P3-funded hospital. It charges that the P3 funding model is flawed and that up to $100 million could be wasted in Kingston alone.

“It’s one of the cheapest times to fund infrastructure like hospitals. At (an interest rate of) 3.4%, we won’t see these yields again,” Canadian Centre for Policy Alternatives senior economist David MacDonald said yesterday at a news conference held at City Hall.

In the past, hospitals were funded by provincial government selling 30-year bonds to investors at 2.4%, MacDonald said.

“The P3 deal won’t work that way,” he said.

“The P3 deal will have the international consortium listing their own bonds, which will be private bonds. And, because they’re private bonds, they cost 2% more, and 2% doesn’t seem like a lot until it’s stretched over 30 years and then all of a sudden it increases the present value of the project by 30% or something along those lines.”

Up to three consortiums could bid for the contract to build the new facility, MacDonald explained, but there should be another one, too.

“I think what needs to happen in this process, in order for it to actually be fair, in order to make sure that the people of Kingston are getting the hospital that they deserve, is that their should be a fourth bidder, and that fourth bidder should be the provincial government,” MacDonald said.

He feels that, if the competition is equal, the government would win that bid.

MacDonald echoes the fear of the health coalition that the new facility, to be built across King Street from St. Lawrence College, will not live up to what had been planned.

“I think what will end up happening as you continue to go down this road is Kingston will end up with a smaller hospital, with fewer services, for the same price that the province could have built a much bigger hospital with better services over this time period,” he offered.

“That’s certainly what the historical evidence suggests.”

Financing the hospital is analogous to financing the purchase of a home, MacDonald suggested, and the private financing would be like paying too high a mortgage rate.

“What’s happening for P3s, though, it’s a much more complicated, much greater project, but at the end of the day, it’s the interest rate that determines how much you’re going to pay over the long period — 25 years, 30 years,” he said.

Ontario Health Coalition director Natalie Mehra, who also spoke Friday, said that a P3-funded, 497-bed hospital built in Brampton cost $650 million, whereas a government-funded, 494-bed hospital built in Peterborough cost $197 million.

“It’s unfortunate that the government isn’t willing to use its own ability to borrow instead of going through P3s to get the exact same money through the exact same people,” MacDonald said, “and just paying 2 to 4% more for it.”

The provincial government, meanwhile, has stated that the public-private partnership is the only way it can afford to build new hospitals because of the huge deficit it faces.

peter.hendra@sunmedia.ca

http://www.thewhig.com/2012/10/26/province-urged-to-bid-on-p3-hospital-contract