Outsourcing Is Not A Four Letter Word
Posted September 25, 2015
The government is investigating different ways of managing its registries. Both it and the NDP have difficulty calling the project what it is.
The registries in question are for motor vehicles, land, and joint stock companies. In each case, the supporting computer systems are antiquated and unreliable.
There is little that is unique to Nova Scotia about any of these. The data about vehicle numbers, owner names and addresses, or license plates will be very similar in format to other provinces. The business of recording data and issuing permits is, likewise, similar.
Each of Ontario, Manitoba, and Saskatchewan have noticed this, and have been willing to outsource registries’ functions to corporations set up for that purpose. Teranet was founded in Ontario in 1991 as a public-private partnership to automate the Ontario public land registry system. It is owned by the infrastructure investment arm of the Ontario Municipal Employee Retirement System (OMERS).
In 2012, it reached an agreement with the NDP government of Manitoba to provide similar services. This can be a win-win because Teranet already has the required expertise, infrastructure, and systems. Manitoba retains ownership of the data, but Teranet can use the data to provide value-added services to users such as legal firms.
All of the employees were offered positions with Teranet, with 99 out of 120 accepting. They are represented by the same union and continue to participate in the Civil Service Superannuation Plan.
Nova Scotia is investigating, in a commendably transparent way, the possibility of making comparable arrangements with one or more of its registries. In theory, separate choices could be made for each of service delivery, operations support, and information technology—but the most workable version would encompass all three functions.
After consultations with prospective suppliers, a decision whether to proceed with a request for proposal will be made early next year. Any such arrangement would create an agreed constraint on future fee increases.
At present, the province makes a tidy profit of close to $100 million on these registries, primarily on the motor vehicle registry. (We are assured that all of this goes back into road maintenance.) There is no reason why that level of revenue could not be retained in any arrangement.
The alternative for Nova Scotia is to embark on a series of complex systems projects, with considerable uncertainty as to costs and outcomes. Outsourcing is likely to be a better alternative, but the government has studiously avoided calling it that.
Instead, it calls this program “Alternative Service Delivery”, which it defines as “partnerships between government, the private sector and labour to deliver public services.” Just a spoonful of sugar helps the medicine go down?
Not for the NSGEU—nor for its political arm, the NDP. Apparently, they feel that their brethren in Manitoba made a bad deal. NDP Leader Maureen MacDonald says “the McNeil government’s sell-off of provincial registries would mean the loss of millions of dollars in revenue from provincial coffers.”
Never mind that no decision has been made to seek proposals, let alone consecrate a deal. None of the deals in other provinces have sold the registries, any more than outsourcing hospital laundry services means selling the operating rooms. There is no need or sound reason for the province to forego any of the current revenue it is receiving as part of a deal.
It is a good thing if government can deliver the same (or better) services for a lower cost to taxpayers and the thinking should be expanded to other areas, particularly those that are not a critical function of government.
Top of the list is selling booze, not an essential public service. At present, the NSLC provides a 38% profit margin to government and that should be continued as a royalty. Government would still find willing buyers for most or all of its retail locations, even with current profit margins retained for taxpayers.
The government functions that really matter are things like health, education, transportation and infrastructure, community services, and economic development. Freeing up both time and money to deal with them is a commendable objective.
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