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The new giant in the story of capitalism: Private equity

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The following is an excerpt from Armine Yalnizyan’s Galbraith Prize in Economics lecture, delivered last month in Toronto.
Yalnizyan, Armine
Publication Date: 
18 Jun 2024


The pandemic shifted my attention to the one thing we all need at different points in our lives, from cradle to grave: care. The human need for care is a constant, but the way we access it is rapidly changing, affecting almost everyone. And that, in turn, is affecting how the economy at large works.    


I’m increasingly concerned about the ballooning size and influence of markets in the domain of care, and the growing role of investment capital, particularly the kind we know so little about in Canada: private equity.

Private equity-backed companies are the new giants of capitalism and are now extending their reach into care. The same patterns are unfolding across long-term care, hospitals, home care and child care globally: public and non-profit operators struggle while private investors reap growing profits, all fuelled by public funds. In Canada, we’re not learning fast enough from the U.K., U.S. and Australia, where private equity has been wreaking havoc on multiple sectors.


That giant sucking sound you hear is the withdrawal of dividends and fees from the revenues of newly acquired companies, sometimes bankrupting operations within months of new ownership. In the U.S., federal bills have been proposed to bar dividend extraction and outsourcing to other companies owned by the parent company for two years after purchase.

Finally, we need a workforce strategy for child care, health care and long-term care to ensure we have the right people, training and technologies in place.

The care economy matters more than ever. Its evolution impacts everyone.