Category: Columns

Given a place to live, Finland’s homeless were better able to deal with addictions and other problems, not to mention handling job applications.

Determined to pack more homeless people into Toronto’s overcrowded shelters, officials have come up with a solution: reduce the number of inches between beds.

There’s a certain logic to this and it may be the best we can do — given our refusal to consider solutions that would actually be innovative.

And so it is that here in Toronto we’re busy studying how to jam more beds into already-cramped shelters, while over in Finland — where innovation is more than just another word for privatization — they’ve managed to virtually end homelessness.

OK, so the Finns are more generous and just shell out a lot more to help the homeless, right? Actually not. The Finns are simply smarter.

Instead of abandoning the homeless, they housed them. And that led to an insight: people tend to function better when they’re not living on the street or under a bridge. Who would have guessed?

It turns out that, given a place to live, Finland’s homeless were better able to deal with addictions and other problems, not to mention handling job applications. So, more than a decade after the launch of the “Housing First” policy, 80 per cent of Finland’s homeless are doing well, still living in the housing they’d been provided with — but now paying the rent on their own.

Indeed, homelessness is just the extreme end of Canada’s dysfunctional housing market, which we’ve left largely in the domain of the private marketplace, creating a huge divide between those who can afford to buy a house and those who can’t.

This has resulted in a large underclass of tenants — roughly one-third of Canadian households — many of whom are little more than a pay cheque away from eviction.

More government intervention required

The situation cries out for more government intervention.

In fact, the government does intervene in the housing market — most notably in ways that actually enhance the privileged position of homeowners by, for instance, sparing them tax on the capital gains they receive on the sale of their homes.

Of course, the government also intervenes to increase the housing supply, ostensibly helping tenants. However, these measures often take the form of financial incentives for developers, mostly benefiting developers. The additional rental units created rarely result in lower rents, notes political economist Ricardo Tranjan in his new book “The Tenant Class.”

The best way to benefit low-income renters would be for government to create housing that isn’t based on the profit motive — by building housing itself or subsidizing non-profit groups to do so.

Canada used to be fairly good at this social housing, along with the Europeans. In the late 1960s and early 70s, about 10 per cent of new rental housing built in Canada was social housing.

Canada has exited social housing

But while the Europeans have remained strong in social housing, Canada has almost completely exited the field, with our social housing dropping to just 4 per cent of total households — roughly the same level as the devoutly pro-market U.S.

If we want to deal with our dysfunctional housing market more effectively than simply pushing the shelter beds more closely together, the answer will involve increasing the supply of housing that isn’t based on the profit motive.

Sadly, this is not on the political agenda, although it’s noteworthy that Toronto City Councillor Josh Matlow is advocating a proposal along these lines as part of his mayoral campaign.

Matlow’s proposal will no doubt be dismissed as impossibly costly by commentators who, as homeowners, quietly benefit from the impossibly costly (although largely hidden) subsidy provided to homeowners.

This not only helps the homeless, it turns out to be cheaper.

Ontario’s privatization director will have sweeping powers and little public accountability.

Originally published in the Toronto Star April 6, 2023.

This trail-blazing by Biden, a centrist Democrat, should stiffen the spine of Canada’s strikingly timid “progressive” politicians.

Originally published in the Toronto Star March 23, 2023.

After years of retreats and only part of the reforms still intact, Trudeau’s government quietly folded its tent and let the industry have its way.

Contrary to the Ottawa buzz, our prime minister isn’t too woke; he’s too weak.

Politicians can be judged by how well they stand up to powerful interests — that is, how tough they are in defending the public against weighty forces trying to enrich themselves at public expense.

Some politicians clearly don’t stand up to powerful interests. Doug Ford, for instance, is too busy partying with them, serving them up juicy chunks of farmland for development or coveted space on Toronto’s tiny waterfront for a private spa. It’s all just one big stag-and-doe affair.

But Justin Trudeau purports to defend the public interest and manages to win over lots of progressive voters by appearing to do so. Out of the limelight, however, he’s weak standing up to the powerful — as we can see in the sad case of his feeble attempt to control spiralling drug prices.

This is a hugely important file — drug prices in Canada are among the highest in the developed world, contributing to inflation and rising health care costs. But correcting the problem means taking on the multinational drug industry which, through its patent monopolies, controls access to vital, often life-saving drugs.

Ottawa used to protect Canadians from Big Pharma’s monopoly power through “compulsory licensing” — which allowed generic versions of brand-name drugs to be produced under licence.

This highly effective system was scrapped by the Mulroney government due to pressure from Washington during free trade negotiations in the 1980s. Washington was championing the interests of the big U.S. brand-name drug companies, which always hated compulsory licensing. They preferred outright monopoly.

Bowing to U.S. demands, Mulroney replaced compulsory licensing with a regulatory body called the Patent Medicine Prices Review Board (PMPRB).

But the new system never worked very well for Canadians. Without compulsory licensing, the brand-name companies got to enjoy a longer monopoly period before the patent on a new drug expired and generic versions were allowed on the market.

Drug prices rose incessantly, with a year’s supply of insulin, for instance, reaching $2,500 — five times the 1985 inflation-adjusted cost.

The brand-name companies also failed to deliver on their promise that, without compulsory licensing, they’d increase their R&D spending in Canada; their spending (as a ratio of sales) has actually fallen by more than 70 per cent since 1995.

So, in 2017, proclaiming his intention to protect Canadians from “excessive drug prices,” Trudeau introduced reforms to make the PMPRB more muscular in order to save Canadians about a billion dollars a year in drug costs.

But the highly organized drug companies swung into action, determined to prevent the PMPRB from setting an international precedent for taking on Big Pharma.

The industry played hardball, delaying the introduction into Canada of half a dozen important new drugs — including for cancer and Parkinson’s — thereby effectively holding Canadians hostage in its war against the government’s attempt to rein in its profiteering.

The industry was able to draw on support from right-wing media commentators and patients’ rights groups — some of which are industry-funded — that blamed government for the drug delays.

In response, the Trudeau government kept limply retreating, setting a date to implement its reforms and then timorously backing off at the last minute. After years of retreats, and with only part of the original reforms still intact, the Trudeau government has quietly folded its tent, letting the industry have its way.

As documented in a recent investigative piece by Kelly Crowe in The Breach, Health Minister Jean-Yves Duclos wrote confidentially to the head of the PMPRB last November urging the board to suspend its reform process. The PMPRB chair resigned and has been replaced by an industry-friendly lawyer.

While purportedly championing the public interest, the government has secretly sided with the drug companies when the cameras aren’t rolling.

Big Pharma is an intimidating force that fights relentlessly, publicly and privately, to protect the interests of its shareholders. But is it too much to expect the Trudeau government to fight with similar zeal, publicly and privately, to protect the interests of its citizens?

Originally published in the Toronto Star March 9, 2023.

Ottawa’s snub of public ownership appears to be rooted in the notion — pushed by business interests — that the private sector does things better.

Having squandered half a billion dollars in a fruitless quest to induce drug companies to produce a made-in-Canada vaccine, might the Trudeau government finally be willing to consider a truly innovative solution: public ownership?

Of course, public ownership is an old trick in the government playbook, but it’s fallen so far out of favour in recent decades that it could pass for groundbreaking.

The other thing public ownership has going for it is a stunning track record: Canada’s publicly owned Connaught Labs was one of the world’s leading vaccine manufacturers before the privatization snake-oil salesmen got control of our politics in the 1980s and, for no good reason, the Mulroney government sold Connaught to private interests.

The sheer idiocy of that privatization wasn’t widely appreciated until the onset of the pandemic, when it became clear just how vulnerable we are as a country without Connaught’s vaccine capacity. Since then, the Trudeau government has been bowing and scraping before biotech and pharmaceutical companies — while handing them truckloads of cash — in the hope of coaxing them to produce a vaccine here that Canadians can rely on.

So far, no luck.

The latest failure in this sorry hunt is the shutdown of Medicago, a Quebec biotech firm on which the Trudeau government lavished $173 million, hoping it might just be the one to produce a vaccine here. But that dream collapsed earlier this month when Medicago’s parent company, Tokyo-based Mitsubishi Chemical Group, abruptly pulled the plug.

Oh well, we tried. Or at least we spent a lot of money — which we may or may not bother trying to recover. Ottawa has also put $415 million into French pharmaceutical Sanofi (which owns the old Connaught facilities in Toronto) and numerous other companies, hoping to secure vaccines.

The one option the Trudeau government seems hell-bent on avoiding is establishing a new version of Connaught Labs: that is, a biotech company, based at a Canadian university, which Canada would own and control — an option advocated by a number of health policy experts, including the University of Toronto’s Leslie Boehm and Gregory P. Marchildon.

Ottawa’s snub of public ownership appears to be rooted in the notion — pushed by business interests — that the private sector always does things better. Not only is this notion unproven but, in the case of the pharmaceutical industry, is downright absurd.

It’s difficult to overstate how well Connaught served Canadians for seven decades. But first let’s quickly note how badly we’re served by Big Pharma.

Take Moderna, the U.S. giant whose supremely lucrative COVID vaccine created at least five new billionaires — even though there was little risk-taking by Moderna since the U.S government paid the development costs.

Now, as its government contract expires, Moderna plans to raise the price of its vaccine — the one U.S. taxpayers already paid to develop — from $20 a dose to $130 a dose. (Pfizer, another Pharma giant whose COVID vaccine was heavily subsidized by Washington, plans a similar price hike.)

Because, well, why not? These are profit-making companies and no one is stopping them.

The actual production cost is less than $3 a dose. But, with their patent monopolies, the companies charge what they please, leaving billions of people unable to afford the vaccine.

Connaught bore no resemblance whatsoever to these corporate money-machines. Started by a Toronto doctor in 1914 and affiliated with U of T, Connaught quickly became a self-sustaining, world-class producer of vaccines and medications, including insulin, all of which it produced and sold basically at cost.

Its top-notch scientists carried out basic research, contributing to some of the key medical breakthroughs of the twentieth century, including the polio vaccine, penicillin and heparin. Connaught also partnered with the World Health Organization in the successful global campaign to eradicate smallpox.

During the pandemic a century ago, Connaught not only provided Canada’s entire supply of domestic vaccines but it exported vaccines to the U.S. and Britain. It’s hard to imagine we could re-create anything as good as Connaught. But couldn’t we at least try?

Originally published in the Toronto Star February 23, 2023.

At our expense we grant huge tax relief to rich families, who channel billions of dollars to private foundations, where the money can sit for decades.

It doesn’t seem like much to ask: just by making a small tax change in the upcoming federal budget, Parliament could encourage more charitable giving, thereby helping a lot of deprived Canadians.

“Canada’s Charities Desperately Need Additional Funding,” says a full-page newspaper ad, citing the rise of food bank use and urging Parliament to introduce the new measure that would provide more tax relief to rich Canadians donating to charities.

It’s a compelling pitch, except for one thing: there’s no reason to believe that the tax change being advocated will do much — or anything at all — to help needy Canadians get charitable services.

Before Parliament creates any new tax breaks for the charitable sector, Canadians should be told a basic fact that may surprise them: there is already $100 billion in charitable funds locked away in private foundations where the money sits idle, year after year, doing nothing to help Canada’s needy.

We don’t need more tax breaks for charitable giving — Canada already has among the world’s most generous charitable tax breaks, and we are overflowing with charitable funds.

It’s just that we can’t get at them.

What’s needed is a major overhaul of Canada’s two-tier charity sector where private foundations controlled by wealthy families sit on mountains of idle cash while thousands of working charities are starved for funds as they struggle to deliver services to Canadians. Private foundations are certainly a big part of the problem, as more and more of Canada’s charitable donations are given to these massive private holding tanks.

Although donors receive an immediate tax break, private foundations are only required to pay out 5 per cent of their funds each year for actual charitable purposes. The rest of the money accumulates in the foundation, which is allowed to employ family members, whose compensation is paid out of the foundation’s funds.

If the minimum payout were raised to 10 per cent — as many in the voluntary sector advocate — private foundations would be required to disburse, roughly, an extra $5 billion each year.

Still, there would be no guarantee that any of that extra $5 billion would end up actually helping disadvantaged people. That’s because private foundations get to decide where to direct their largesse, and they have shown little interest in helping those at the bottom.

Rather, they tend to direct their disbursed funds towards charitable endeavours that create personal legacies for themselves — their alma maters, hospitals, opera houses and art galleries, where their donations are prominently proclaimed and celebrated.

They also support organizations (with charitable status) that promote their favoured causes, like reducing taxes on the rich.

A study of Canada’s top 20 private foundations revealed some startling facts: fully 34 per cent of their disbursements went to institutions in foreign countries. Meanwhile, only 6 per cent went to Canadian charities focused on poverty reduction.

Just 7 per cent went to organizations “benefiting communities” and this category included the Fraser Institute, a right-wing think tank, which was a major recipient.

Only a minuscule amount of the disbursed funds went to organizations supporting Indigenous people (0.2 per cent), while even less (0.1 per cent) went to racialized communities, according to the study by The Charity Report.

Of course, the rich should be allowed to give their money to whomever they please — except that the money in their foundations has been given special treatment, allowing them to reduce their taxes, thereby obliging the rest of us to pay higher taxes to support Canada’s infrastructure and public programs.

So, at our expense, we’re granting huge tax relief to wealthy families, enabling them to channel billions of dollars into their private foundations where the money can sit for decades, serving no ostensible purpose other than enhancing the family’s prestige and influence.

Now some tax professionals are pushing for a new measure that would allow owners of private companies to be spared paying capital gains taxes when they donate their shares to a charity — most likely a private foundation.

If Parliament is seriously looking for a way to help needy Canadians, it can do better.

Originally published in the Toronto Star February 9, 2023.

The Bank of Canada is driven by anti-inflation extremism. It’s the AR-15 method of inflation control.

Now that the inflation hawks have prevailed, the Bank of Canada is rolling out its big guns, raising interest rates with great gusto to slay inflation.

While there are celebrations inside Bay Street investment houses and think-tanks, there should be no joy among ordinary Canadians over this banking bravado — those interest rates will also plunge us into a deep economic abyss.

And as we sink into it, let’s not be under any illusion that what’s happening is unexpected, that this dark hole wasn’t what was intended for us.

In fact, the Bank of Canada has a history of reckless extremism, of playing fast and loose with the economic security of millions of Canadians. Its current brass-knuckle actions against inflation hearken back to its earlier anti-inflation zeal, bordering on fanaticism, that helped trigger the recession of the early ’90s.

To be clear, when the Bank of Canada raises interest rates as aggressively as it is currently doing — and more aggressively than other central banks in the West — it does so in order to squeeze the vitality out of the economy. This is sometimes compared to taking away the punch bowl at a party, but that puts too pretty a face on it.

Basically, the higher rates disable or kill most moving parts in the economy. Eventually that slows down inflation too.

It’s the AR-15 method of inflation control.

Bank of Canada governor Tiff Macklem tried to assure us last month that the bank is aiming for a soft landing. He might as well have offered us some valuable swampland in Florida.

His goal is to get inflation down to the bank’s target rate of two per cent. But that means using interest rates to reduce the current inflation level by 6.1 percentage points — a whopping drop that the bank has never managed to engineer along with a gentle landing.

“If modern Canadian history is an indicator, there is a 0% success rate of reducing inflation by 6.1 percentage points and avoiding a recession,” notes David Macdonald, senior economist with the Canadian Centre for Policy Alternative.

Of course, we’re routinely told that inflation is a great evil that particularly hurts low-income people, who struggle with bigger grocery bills. True. But inflation also greatly impacts rich people.

That’s because inflation erodes the real value of money. Thus, people with a lot of money have a great deal to lose. If you owe the bank $50,000 and the inflation rate is eight per cent, then the real value of that debt shrinks by eight per cent a year.

That means you’ll be repaying that debt with less valuable dollars. Banks don’t like that.

That’s why banks, their shareholders and the rest of Bay Street demand that the central bank raise interest rates to kill inflation.

But killing inflation with higher interest rates drives up unemployment, which hurts ordinary people even more than inflation. And unemployment isn’t just a cruel by-product of the bank’s higher interest rates — it’s actually central to the strategy.

High unemployment disciplines workers. A large pool of idle workers makes other workers insecure and reduces their leverage to demand higher wages. This tames inflation, even as it diminishes the overall bargaining power of labour, quietly advancing a class war.

Of course, this anti-worker bias is never admitted. But inside banking circles, there’s a technical term for this strategy — the Non-Accelerating Inflation Rate of Unemployment (NAIRU) — that is, the amount of unemployment deemed necessary to keep inflation in check.

When the Bank of Canada experimented with extreme anti-inflation policy in the early ’90s, unemployment soared to 11.3 per cent as a recession threw hundreds of thousands of Canadians out of work.

We’re headed back in that direction, with little consideration being given to alternative ways to tackle inflation, like tightening mortgage regulations, limiting rent increases or imposing a windfall profits tax.

If the bank were to adopt a more moderate inflation target — four per cent was traditionally considered acceptable — we’d have a better chance of avoiding a devastating bout of unemployment. But not everyone wants to avoid that.

Originally published in the Toronto Star July 28, 2022.

Private operators may offer faster access to services for their paying clients, rather than determining access to care based on the urgency of need.

Now that it’s clear Premier Doug Ford will rule over Ontario for another four years, we can begin to survey the damage he’s likely to do in some key areas — like health care.

Somehow, Ford managed to get through the recent provincial election campaign with almost no scrutiny of his health-care plans.

The media is largely to blame. Media outlets mostly ignored the most significant thing Ford’s Progressive Conservatives revealed during the campaign about their health-care plans: that they intend to expand private health care as a way to deal with the huge medical backlog created by the pandemic.

In other words, COVID will be the cover for doing what they want to do anyway.

Now, this doesn’t mean we’ll end up with a disastrous health-care system like the largely private one south of the border. It takes decades of careful planning and wilful treachery to devise a health-care system as wretched as the American one.

Instead, we’ll maintain our basic public system, but more medical entrepreneurs will be allowed to operate private clinics, often as part of corporate chains. One thing is clear: these private operators will make a good profit for themselves, so that a growing portion of our public health-care dollars will go to enriching them.

In many cases, the private operators will offer faster access to medical services for their paying clients, rather than determining access to medical care based on who is sickest, as the public system requires.

It’s easy to sympathize with private clients wanting to get treated as fast as possible. But faster service for them means slower access — or no access at all — for others.

That’s because there are a limited number of medical professionals, and they all work within the same broad, publicly subsidized system.

The public system pays for the education of doctors and nurses employed by the private clinics, and it provides the high-level medical infrastructure of publicly funded hospitals, which are essential in case things go wrong at the clinics.

If the private operators were obliged to cover the full costs of providing their services — paying to educate their medical professionals and providing the sophisticated health-care infrastructure needed as backup — their costs would be astronomical and their business model wouldn’t be viable.

Instead, private operators take full advantage of the public system, and then use their power within it to move their clients to the front of the line, ahead of sicker people who haven’t paid them a fee.

In effect, the private clinics are, leeching off the public system. They couldn’t exist without it. But even as they rely on the public system to function, they subvert its key goal of prioritizing patients by sickness.

In the process, the sickest patients are kicked to the curb.

If we reject this corporate freeloading, it doesn’t mean we have to accept overrun emergency departments or endless waits for medical treatment.

Much of what ails our system can be fixed — not through the self-serving private solutions always being peddled, but by adequately funding our public system.

Ottawa definitely needs to increase its health-care funding. But so does Ontario — a rich province but a cheapskate when it comes to health care.

Ontario actually spends less per person on health care than any other province, according to Ontario’s Financial Accountability Office, the province’s independent financial watchdog.

It’s this underfunding that creates a demand for private health care.

Consider this: if Ontario just spent as much as the average of the other provinces — which isn’t setting the bar unduly high — it would mean an extra $7.6 billion a year for health care, notes Ricardo Tranjan, a political economist at the Canadian Centre for Policy Alternatives.

Imagine what could be done with that money! With even a small portion of it — $2 billion — Ontario could hire an additional 24,000 registered nurses.

I’d wager that an extra 24,000 registered nurses would do more to reinvigorate our overwhelmed emergency rooms than an influx of medical entrepreneurs, driven by a desire to redirect a big chunk of our public health dollars to themselves.

Originally published in the Toronto Star July 19, 2022

Many commentators insist we have no choice; we’re already in World War III. But we’re not. The very suggestion downplays the incomprehensible horror.

In a recent TV interview, the celebrated U.S. political scientist Francis Fukuyama made what struck me as possibly the most foolish remark ever uttered on TV. And I know that’s a high bar.

“The nuclear threat, I think, is a bogeyman,” Fukuyama said in a MSNBC-TV interview about the war in Ukraine. “Of course, everybody is going to be worried about the possibility that you could eventually get there. But there are so many stopping points before you reach that point that, I think, you know, that is not something anyone should be worried about.”

Suggesting nuclear war is “not something anyone should be worried about” is stunningly foolish — and dangerous.

Fukuyama’s minimization of the nuclear threat — a stance that underlies much of the commentary on Ukraine — implies the public should relax about nuclear conflict since the chances of it are remote.

After all, according to Fukuyama, “there are so many stopping points” before we’d reach nuclear war.

The problem is he’s dead wrong about that.

In truth, there are virtually no stopping points. Things could move from a mistaken belief that the enemy has fired a nuclear weapon to an all-out nuclear war that would kill hundreds of millions of people in less time than it takes to eat a veggie burger.

That’s because the United States and Russia both have hundreds of nuclear-armed missiles on “hair-trigger alert,” ready to launch on warning.

The U.S. president “has roughly six minutes to make a decision if it appears we are under attack,” according to the late Bruce Blair, a Princeton University professor and expert on command-and-control systems for nuclear weapons.

Indeed, an accidental triggering of nuclear war — due to a false or mistaken warning signal — is the most likely way a nuclear war would begin, according to Daniel Ellsberg, author of “The Doomsday Machine” and a former nuclear war planner in the Kennedy administration.

Such an accidental war becomes all the more likely when there’s heightened tension and mistrust, leaving both sides more inclined to believe the other has launched an attack.

Earlier this month, Ellsberg said that today’s extreme tension over Ukraine makes nuclear war “a more imminent possibility than the world has seen since the Cuban Missile Crisis in 1962.”

Clearly, Russia’s invasion of Ukraine is an appalling act of aggression, and it’s right for the West to help the Ukrainians defend their country.

But nuclear war must never be on the table.

Germany, France and Italy have correctly pushed for negotiations towards a diplomatic solution in Ukraine. However, the U.S. is digging in, moving beyond the original goal of helping defend Ukraine to adopting the more ambitious and perilous goal of weakening Russia.

In late April, U.S. Defense Secretary Lloyd Austin said Russia should be “weakened to the degree that it can’t do the kinds of things that it has done in invading Ukraine.”

But while teaching a schoolyard bully a lesson can be satisfying, it’s a crazy idea when the bully has nuclear arms and humiliating him could set off World War III.

Ottawa, responding to persistent demands from Washington, is increasing our military spending to bolster NATO forces in eastern Europe.

Former Canadian senator Douglas Roche questions this focus on military spending, noting that “Canada already spends 20 times more on its military than on diplomacy” and this “dwarfs our contributions to the UN’s sustainable development programs.”

“Human security today does not come from the barrel of a gun. It comes from preventive planning,” Roche argued in a recent op-ed.

Many commentators insist we have no choice, that we’re already in World War III.

But we’re not. And that very suggestion is part of the dangerous downplaying of the incomprehensible horrors of nuclear weapons.

Today’s bombs are a hundred times more powerful than the ones dropped on Hiroshima and Nagasaki. A full-scale nuclear war today could kill everyone on earth, with any survivors enduring primitive lives in a “nuclear winter.”

As Albert Einstein reportedly commented, “I don’t know (what weapons will be used in the Third World War). But I can tell you what they’ll use in the fourth — rocks.”

Originally published in the Toronto Star on June 29, 2022.

With the Highway 407 owners $1 billion in hock to Ontario, surely this was an opening for Premier Ford to win something back for beleaguered commuters.

Looking for someone to wrestle the province’s nurses to the ground? Look no further — Doug Ford’s your man.

Despite the gruelling conditions nurses have faced during the pandemic, the premier has held them to a wage increase that’s well below the rate of inflation (even with their pandemic bonus).

But while a street-fighter with nurses, the premier turns to jelly when negotiating with the corporate world — as he showed in his crucial recent dealings with 407 International Inc., the corporation that operates Highway 407.

With the provincial election just days away, it’s stunning that Ford has managed to avoid the reputation of being a wimp when it comes to standing up on behalf of the province’s commuters. Ford’s key campaign promise is to build a new highway, the 413, to relieve traffic gridlock on Highway 401, one of the world’s busiest highways.

In fact, there is a much faster, simpler, cheaper — and less destructive — way to reduce 401 gridlock. But that would have required Ford to show some toughness in dealing with 407 International, which he was either unable or unwilling to do.

Indeed, the premier blew a rare opportunity to solve a problem that has bedevilled the province since former Conservative Premier Mike Harris privatized the 407, a highway built in the 1990s in an earlier attempt to relieve 401 congestion.

Harris struck an incredibly bad deal for Ontario commuters — imposing no limit on how high tolls could be raised — as long as the 407 maintained minimum traffic volumes, allowing it to qualify as a relief route.

These terms were locked into a preposterous 99-year contract, delivering spectacular profits year after year to 407 International — a mostly foreign consortium that in 2019 became 50.1 per cent-owned by a company controlled by the Canada Pension Plan Investment Board.

With explosive population growth in the GTA over the past two decades, the 407 turned into what one bank analyst called a “cash cow” and another described as “a value-generating monster.”

It became almost like a private road where those who could afford the exorbitant tolls enjoyed a largely empty throughway, while Ontario’s common folk remained crammed together on the 401.

Then, out of the blue, the pandemic created a unique opportunity for the province to get around the terrible deal Mike Harris had signed. With its traffic volume reduced due to the pandemic, 407 International faced stiff penalties — of about $1 billion a year.

The company could have avoided the penalties by simply reducing its tolls, thereby attracting more traffic. Instead, it approached the Ford government for relief from the penalties, on the grounds the pandemic was beyond its control.

Now, here was a fabulous opportunity for Ford to play hardball. For years, 407 International had relentlessly gouged commuters with its excessive tolls — among the world’s highest. With the company now $1 billion dollars in hock to the Ontario government, surely this was an opening for Ford to win something back for beleaguered commuters from this “value-generating monster.”

There were months of secret negotiations. In the end, the Ford government walked away, leaving that $1 billion on the table, as investigative reporter Paul Webster revealed in the Star last November.

Even more astounding, Webster noted, the Ford team apparently failed to use its billion-dollar leverage to press the 407 International to lower its tolls — which could have finally turned the highway into a true relief line.

Transportation Minister Caroline Mulroney meekly defended her government’s failure to press for lower tolls: “The 407 is a private company and they make their decisions.”

Despite fierce opposition from the other three provincial parties, Ford’s Conservatives insist the only way to solve 401 gridlock is by ramming a new highway through some of the province’s finest remaining farm and conservation land, at a cost of $10 billion, in a project that will take years to complete.

So relax and get used to many more years of being stuck on the 401, while the 407 remains a pleasing speedway for the privileged — but out of bounds for ordinary suburban commuters who, paradoxically, seem poised to re-elect Doug Ford.

Originally published in the Toronto Star May 30, 2022