Ontario Auditor-General Bonnie Lysyk found that the province may have overpaid to the tune of $8-billion for 74 major infrastructure projects, dating back nine years.Nathan Denette/The Canadian Press
P3s shift risk away from taxpayers
Re The costly seduction of private-public partnerships (Dec. 15):
The article criticizes the valuation of risk (calling it "junk science") and insinuates that outside consultants are inflating the cost of risk. It is actually the cost of traditionally procured projects where no comprehensive data are available, which is why consultants are forced to project the true cost of risk. If only we could hold traditionally procured projects to the same standard of scrutiny that P3s are held up to.
What is being lost in the coverage of this story is that there is a cost to risk that cannot be ignored. For the same reason people buy an extended warranty on their cars, or buy screen protection for their smartphones, governments buy insurance on their infrastructure. We do not want to go back to the days of the Sudbury hospital – a project 150 per cent over budget. Perhaps the author is fine with taxpayers being saddled with the cost of construction overruns, or a leaky roof after five years on a hospital, or replacing a school that only lasts 25 years instead of 50. I know I'd rather shift that risk to someone else and I bet most Canadians would as well.
Dale Richmond, chairman, The Canadian Council for Public-Private Partnerships
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'Country pricing' must be addressed
Re A solution to the price gap for distracted consumers (Dec. 9): Ask Canadians whether retail prices are lower in the United States than they are here in Canada and you are likely to hear a resounding yes. Many people would tell you that's just how it is.
But it doesn't have to be.
There can of course be legitimate reasons for price differences, whether at the wholesale or retail levels. Higher transportation, distribution and labour costs can be important factors. Customs duties aren't uniform between the two countries and those differences show up in the price on the shelf. In some cases, there are valid regulatory differences on matters such as product safety and language that can mean additional production costs for goods sold into Canada.
Those who seem to want to give the manufacturers a free pass point to the fluctuating level of the dollar. But this isn't about exchange rates. If it were, we would see price reductions whenever the Canadian dollar appreciates in value against the U.S. dollar.
Even correcting for the exchange rate, there are manufacturers who engage in what is called "country pricing," the practice of charging Canadians simply because they believe that we are willing to pay more, or that because of typical sole-supplier arrangements, we have little choice but to do so.
That's where the Price Transparency Act comes in. The act empowers the Competition Bureau to closely examine and report on those situations where there is no good reason for the gap between Canadian and U.S. prices on the same items.
Some of the early commentary on the act has mischaracterized it as being a price-regulation regime. It is very far from being that. This is about identifying the factors that contribute to price differences and calling out those parties who are engaging in unjustifiable country pricing. It also provides government and businesses with an important tool of moral suasion when dealing with manufacturers who are engaging in this practice.
Those who have called this legislation an overreach miss the point of the Competition Act and the purpose of the Competition Bureau. Whether it be on price-maintenance, anti-dumping or other competition concerns, the goal of the Competition Act is to address unacceptable business practices that make prices higher than they otherwise would be.
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Diane J. Brisebois, president and CEO, Retail Council of Canada
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