“We are going to be unlocking the power of business to help us grapple with some of these challenges,” says Manitoba's NDP Premier, Wab Kinew.
While Manitoba's prior two-term Tory government shuttered more public housing units that it created, the Manitoba NDP has gone further than mere cuts and has started sending millions of dollars into the coffers of private developers in a doomed, corruption-prone bid to create affordable housing.
October 8, 2024 press conference where Manitoba Premier Wab Kinew announced $10 handout to Business Council of Manitoba.
The signs of a retreat on housing were visible only three months after the election that brought Wab Kinew and the Manitoba NDP to power. Back in January, the Manitoba NDP halted a late initiative by the unpopular Tory government to build 300 new affordable social housing units and subsidize an additional 400 units.
The Manitoba NDP claimed that the $13 million earmarked for the 300 new units was insufficient (an additional $3.4 million was budgeted for the rental subsidies). Specifically, the Request For Proposals issued in July 2023 was said to be short $6 million, although the former PC housing minister claims this is not true. With no further public reporting on the fate of this initiative, it appears this entire project is now on ice.
Yet, nine months later, the Manitoba NDP has announced $10 million in public taxpayer money will be given to the Business Council of Manitoba to run a so-called affordable housing program. The $10 million "start up" grant - not a loan! - is intended to "attract investment".
Public-Private Partnerships: The Road to Corruption
What we have here is a classic Public-Private Partnership, or P3. These immensely corrupt and costly infrastructure-building strategies are notorious for lining corporate pockets while delivering subpar, costly and late projects. They're often protected by secretive contracts that protect corporate players and their corruption from public scrutiny.
It was University of Manitoba scholar, the late John Loxley (1942-2020), who wrote one of the most important books on P3s in Canada with Salim Loxley. In Public Service, Private Profits, the Loxleys conclude,
"Our analysis suggests that the public financing of P3s is not an advisable policy option. The VfM [Value for Money] case for P3s is extremely weak, and governments are better advised to retain ownership of public assets...It certainly entails governments improving their capacity to manage capital projects more efficiently, which in all probability would entail the strengthening of public sector expertise rather than cutting it back..." (pages 182-183)
"If P3 financing of infrastructure is to continue, then there must be clear rules put into place to protect the interests of both workers and other citizens....these agreements must be completely open for public scrutiny. They should be subject to public discussion before being signed, and any private company wishing to access public funds through the P3 mechanism must agree to such disclosure in advance." (page 183)
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| Published by Fernwood in 2010. |
“When in opposition, the NDP were highly critical of public-private partnerships, so it’s interesting to see that they are taking this approach,” said Kirsten Bernas, who chairs the Right to Housing Coalition in a report by the Winnipeg Free Press.
“Surely, private investors will be expecting a return on investments. How much of the housing will be owned by non-market housing providers? Will any of it be owned by the private sector? How many of the new units will be below-market affordable housing and how is that defined?”
Bernas is right to pose these questions. Private developers build housing for profit. They are not interested in building "affordable" housing unless someone is covering the losses and profits. This is where corporate welfare comes in. And that's exactly what the Manitoba NDP is doing.
From Manitoba to British Columbia...
This $10 million dollars could cover the alleged $6 million shortfall for the 300 units promised by the prior Tory government, and could also be used to extend and expand rental subsidies as a stop-gap measure until more government-financed affordable housing stock is built. The money could also be invested in cooperative housing corporations to ensure that permanent non-market affordable housing is established and beyond the control of predatory profit-driven landlords and developers.
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| The Vivid housing scandal may help bring down the NDP in British Columbia |
Like the BC NDP, which may be thrown out of office in this month's provincial election, the Manitoba NDP has doubled down on public subsidies for private developers. This will accomplish nothing except deepen the housing crisis and make developers and other real estate scammers richer.
We only have to look at the Vivid housing scandal in Victoria to see how bad things have become with P3 housing scams under the eye of the BC NDP, including current Premier David Eby who was BC's Housing Minister from 2020 to 2022. The P3 housing project may have been put in motion by a BC Liberal government, but recent reports demonstrate that while David Eby was Housing Minister, the BC Housing crown corporation deliberately kept quiet on the crimes of rich speculators and landlords in flaunting the rules around ownership and renting allegedly "affordable" 135-unit Vivid apartment complex.
It has been seven years since the BC NDP were first elected and nothing has been done to resolve the housing crisis other than scapegoat the homeless, and fuel racism by imposing a tax on foreign home owners. Firm rent controls, prioritizing public and cooperative housing, public landlord registries, crackdowns on realtor corruption, and expropriations of criminal landlords and developers have all been off the table. Instead, the BC NDP has implemented a housing strategy virtually identical to that of Doug Ford's gangster government in Ontario: strong-arming municipalities into greenlighting private development at all costs.
If governments are not interested in building and maintaining their own housing stock, then give the money to cooperative housing corporations. Handing money over to developers who are only interested in profit is the height of corrupt right-wing governance. Once again, the NDP has proven what kind of party it is.