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Published: 2008-03-26

Public-Private Partnerships in Canada in 2005



This article surveys the evolving Canadian experience with public-private partnerships (P3s) and the opportunities that are developing across the country in health care, energy and infrastructure.

Canadian provinces and territories are increasingly recognizing the benefits of partnering with the private sector to build and restore Canada 's aging infrastructure, although not without a certain degree of ambivalence.

British Columbia remains a hub of P3 activity, the concept of P3s has gained traction in Québec and, as we predicted a year ago, P3s have resurfaced in Ontario under the name "alternative finance and procurement" (AFP).

P3 activity in Ontario virtually ground to a halt in October 2003 with the election of the provincial Liberals who campaigned on a platform that was critical of P3s. However, the Liberals have since recognized that meeting Ontario 's infrastructure challenge with a $130 billion deficit will not be possible without private investment.

Just prior to the release of Ontario's 2005 Budget, the Honourable David Caplan, Ontario's Minister of Public Infrastructure Renewal (MPIR), delivered a well-publicized speech promoting private sector investment in public facilities under the AFP banner. Minister Caplan also announced the creation of Ontario Infrastructure Projects Corporation, a new agency that will oversee "new, large, alternatively financed" infrastructure projects.

To support the development and implementation of the Ontario government's new infrastructure strategy, the MPIR released Building a Better Tomorrow: An Infrastructure Planning, Financing and Procurement Framework for Ontario's Public Sector in July, 2004.2 It established clear guidelines for planning, financing and procuring public infrastructure assets based on the following principles: (i) public interest is paramount; (ii) value for money must be demonstrable; (iii) appropriate public control/ownership must be preserved; (iv) accountability must be maintained; and (v) processes must be fair, transparent and efficient. These principles were re-affirmed in the 2005 Budget. The Ontario framework promotes public-private collaboration where appropriate, but emphasizes that public ownership, control and accountability will be preserved for hospitals, schools and water projects.

On May 25, 2005, the Ontario government announced that over the next five years, the government and its partners will invest more than $30 billion in public infrastructure, including:

• approximately $5 billion for health care projects, including 105 hospital projects;

• more than $10 billion to improve elementary and secondary schools and to renew postsecondary facilities; and

• about $11.4 billion to improve public transit, highways, border crossings and other transportation systems.3

Approximately $2.3 billion of the overall $30 billion investment will come from alternative financing and procurement arrangements for large-scale projects such as hospitals, the justice sector and other areas. The government also stated that it has reformed the systems used to plan, build, finance and manage public infrastructure to get better use of existing facilities, to ensure that new projects are completed on time and on budget, and to provide the promised public benefits.

The Ontario government also stated that over the next 24 months, 72 hospital projects and over 50 highway expansion projects will be at various stages of construction and completion.

In late 2004, the Canadian Council for Public-Private Partnerships (CCPPP) released survey results of 2,000 Canadians and their attitudes on the infrastructure deficit and appetite for private sector involvement in the delivery of public services. The survey reported that almost 90% of Canadians believe that governments at all levels are having difficulty meeting infrastructure needs and approximately 60% of Canadians support the use of P3s as an infrastructure solution.4 With the increasing willingness of governments to test the merits of P3s and the positive experience to date, the support for P3s in Canada will likely increase. In summary, there are more P3 projects than ever across Canada, with additional projects expected to be resurrected in Ontario under the AFP model recently endorsed by the Ontario government in its ReNew Ontario infrastructure plan. This article summarizes some of the more significant developments.

A CANADIAN DEFINITION OF P3s

P3s encompass a range of models involving different degrees of private versus public participation and risk. Few involve true legal partnerships. In Canada, governments wish to maintain the perception of ongoing public control while accepting the necessity of innovation and private sector funding.

The CCPPP broadly defines a P3 as:

a cooperative venture between the public and private sectors, built on the expertise of each partner, that best meets clearly defined public needs through the appropriate allocation of resources, risks and rewards.5

This definition is broad enough to encompass the Ontario AFP model contemplated in MPIR's policy papers,6 the Ontario Budget and ReNew Ontario.

P3S IN THE HEALTH CARE SECTOR

The federal government funds Canada 's provinces for health, post-secondary school education and social services through the Canada Health and Social Transfer program.

Transfer payments are made under the Federal-Provincial Fiscal Arrangements Act and are targeted to specific areas like health care. Recipient provinces must adhere to the principles of the Canada Health Act (CHA), which require provinces to provide comprehensive universal coverage for all "medically necessary" hospital and physician services. "Extra billing" and user fees are prohibited for insured services. Any province permitting them is penalized through a reduction in cash transfers.

The CHA affects the development and scope of P3s in health care. It forces a distinction between "clinical" (i.e., those directly provided by regulated health care professionals) and "non-clinical" services. To date, P3s have related to "bricks-and-mortar" and non-clinical services such as maintenance, food services and certain technologies.

Ontario public hospitals are governed primarily under the Public Hospitals Act and receive funding from various sources, including research grants and donations, patient revenues and retail operations. However, most funding comes from the provincial government.

In January 2002, an Alberta Advisory Council on Health released "A Framework for Reform," recommending fundamental changes to Alberta 's health care system to ensure its economic sustainability. The report advocated an expanded private sector role in delivering and funding health care in the province. Its recommendations have been endorsed by the Alberta government.

A report issued in October 2002 by a Senate Standing Committee concluded that "Canada 's publicly funded health care system as it is currently organized and operated is not fiscally sustainable given current funding levels."7 It encouraged both federal and provincial governments to explore P3s as an option for obtaining additional investment in hospitals.

Countrywide, the non-covered portion of health spending is rising faster than the portion covered by the CHA. An Ontario Hospital Association (OHA) survey found that Ontario hospitals forecast capital needs of $8.4 billion between 2002 and 2005. The average age of Ontario hospitals is 43 years, compared to 12 years in the United States. According to the survey, 106 Ontario hospitals indicated that they require an aggregate of $4 billion to bring their facilities into good repair, $2.7 billion of which they plan to spend over the next three years.8 A report by the Fraser Institute released in March 2004 indicates that government spending on Ontario hospitals is on track to double after inflation and population growth by 2028.9   

In Alberta, British Columbia, Québec and recently, Ontario, P3s have emerged as the preferred method for tapping private sector resources.

UNIVERSITY HEALTH NETWORK (TORONTO )

University Health Network (UHN), Canada's largest acute care teaching hospital, completed a five-year redevelopment project in 2003 partially financed by a $281 million public bond issue, the first Canadian hospital "finance-only" P3. UHN's 25-year amortizing bonds are secured by charges on the hospital's assets but are not guaranteed by the province. Given the success of this project, the finance-only model may become an attractive alternative to P3s in Ontario, but may not be viable for smaller hospitals.

WILLIAM OSLER HEALTH CENTRE AND ROYAL OTTAWA HOSPITAL

In 2001-2002, the former Ontario government approved two pilot P3 hospitals - the William Osler Health Centre (WOHC) in Brampton and the Royal Ottawa Hospital (ROH). As part of his election platform, now-Premier Dalton McGuinty vowed to bring these P3 projects back into the public system, an election promise critics maintain he has broken. While the AFP framework will apply to all major projects in Ontario, the government has maintained that hospitals will always be publicly owned.

The WOHC entered into an agreement with The Healthcare Infrastructure Company of Canada (THICC), a private consortium, for the development of a new $536 million, 608-bed facility. While WOHC will continue to own the land, over a 25 year period, THICC will design, build, finance, operate, manage and maintain the new hospital and provide certain non-clinical support services. Construction is scheduled to be completed in July 2007.

On July 23, 2004, an agreement was entered into with THICC to build the ROH, a 399,178 square foot psychiatric hospital and research institute. Under the arrangement, the ROH project will cost $256 million over the course of a 20-year 8-month period. The hospital will own the land and the facility while THICC will design, construct, develop, lease, service and deliver certain non-clinical services. Construction is scheduled to be completed by the end of 2006.

OTHER

With the release of Ontario 's infrastructure investment plan in conjunction with the 2005 Budget, it is anticipated that additional public hospitals will be built or renovated using an AFP model. At the time of writing, the hospitals had not been named, but it is anticipated that a number of major hospital projects will be given the go-ahead. 

BRITISH COLUMBIA

In May 2002, British Columbia 's government established "Partnerships British Columbia " to promote P3s and identify options for maximizing the value of public capital assets. Partnerships BC is currently overseeing ten P3 projects, two of which are hospitals.

The Academic Ambulatory Care Centre (AACC) will be a 365,000 square foot facility at Vancouver General Hospital with an estimated cost of $95 million. It is scheduled for completion in the summer of 2006. Under the partnership agreement between Vancouver Coastal Health (VCH) and Access Health Vancouver (AHV), a private consortium, AHV will build and operate the facility, lease it to VCH for 30 years and transfer ownership back to VCH.

Partnerships BC is overseeing all aspects of the Abbotsford Hospital and Cancer Centre design, build, and operate P3, a $355 million project. An agreement with Access Health Abbotsford was executed in December 2004 and construction is scheduled for completion in 2008. In March 2005, this P3 was given the award for top partnership project in North America by Finance Magazine.

The B.C. Health and Social Services Delivery Improvement Act (introduced in 2003) allows B.C. health sector employers to (a) contract out "non-clinical" services (laundry, maintenance, etc.), (b) reorganize services by transferring employees within a work site or to other work sites within a 50-kilometre radius, and (c) ignore certain employment security contract terms. This Act is expected to facilitate P3s in the health care sector. A constitutional challenge by the unions was dismissed by the B.C. Supreme Court and leave to appeal was granted by the Supreme Court of Canada in April 2005.

In November 2003, the B.C. government passed the Health Sector Partnerships Agreement Act which applies to health sector employers that enter into agreements with the private sector to build or renovate health care facilities. The Act allows employers to contract outside of collective agreements with trade unions for the provision of non-clinical services and prohibits actions for damages or compensation against the government or any person because of this Act. The Act applies to Abbotsford as well as five senior care facilities which have been designated under the Act by the B.C. Health Care Facility Designation Regulation. The Act is intended to facilitate the development of new P3 health care facilities and increase the capacity of B.C.'s health care system.

ALBERTA

Alberta has established a framework for P3s in health care and other sectors. The Alberta Infrastructure Guidance Document (August 2003) is a comprehensive guide to the government's approach to assessing P3s.

In June 2004, the Calgary Health Region (CHR) opened the South Calgary Health Centre, Alberta 's first P3 health care centre. Bentall Real Estate Services built and will manage this $23 million, 130,000 square foot facility which will provide urgent care and other services. Over a 10 year period, CHR will lease back 70,000 square feet of this facility at an annual cost of $800,000.

The CHR has also approved a $23 million P3 parking project for the Foothills Medical Centre. The consortium Foothills Parkade Ltd. will lease land from the University of Calgary for the next 50 years and will design, build and operate this 1,558-stall parkade with completion expected by August 2005.

The Alberta government has recently confirmed that a P3 will not be used to build the new $500 million south Calgary hospital. The CHR and government had previously been indecisive as to whether this hospital would be built as a P3.  However, with its 2005-2006 surplus of $1.52 billion, the Alberta government has committed to fully fund this hospital.  The Alberta government has not ruled out the possibility of using P3s for additional facilities such as a new cancer clinic.

QUÉBEC

There has been much debate over the use of P3s for the building of two proposed "superhospitals" in Montreal - the Centre Hospitalier de l'Université de Montréal (CHUM) and the McGill University Health Centre (MUHC). A commission headed by former Prime Minister, Brian Mulroney, and former Québec Premier, Daniel Johnson, released a report in April 2004 which recommended a serious analysis of P3s for appropriate non-clinical activities at the superhospitals. The superhospitals are anticipated to cost between $2-3.1 billion collectively.

While CHUM is in the preliminary stages of planning, the Québec Health Minister announced that construction on the MUHC could start as early as spring 2006. The commission predicted that the buildings would be completed by 2010.

The MUHC and CHUM were not mentioned in a list of P3 projects that were included in the Québec Treasury Board's recent progress report on the government's modernization plans.  Their absence from the report has lead to further speculation as to how the projects will proceed. A review by the government is expected to take place in 2005 to determine whether and how P3s could be utilized in the superhospitals.

In December 2004, the Québec government adopted Bill 61, An Act respecting the Agence des partenariats public-privé du Québec, all sections of which were in force as of May 18, 2005. The Act creates a new agency that will be responsible for: (i) advising the Québec government on P3 related matters; (ii) operating P3 knowledge centres; (iii) informing the public on the use of P3s for public management; and (iv) providing expert services related to the evaluation of the use of P3 projects, selection of partners and the negotiation and management of P3 contracts.

OTHER CANADIAN JURISDICTIONS

New Brunswick and the Northwest Territories are in the early stages of investigating the benefits of P3s for hospital infrastructure. In 2003, the Northwest Territories released a report identifying potential P3 opportunities, including those in health care. The report recognized, however, that two principal factors dictate the success of private sector partnering: (i) having a "political champion" willing to defend the principles and objectives of partnering; and (ii) public acceptance of such partnerships as a tool to address infrastructure needs.10

P3 OPPORTUNITIES IN ELECTRICITY

Historically, the generation, transmission and distribution of electricity in most provinces was the preserve of provincial and municipal governments. Over the past few years with varying degrees of conviction, some have opened the way for P3s and other forms of private sector involvement.

ONTARIO

In October 2003, the Liberal Party came to power, inheriting a provincial electricity system that had undergone huge changes since a restructuring initiated by the Progressive Conservatives in 1998. The intended movement to a competitive market had been fitful and highly controversial.

In generation, Ontario Power Generation (OPG), one of the successors to the provincially-owned Ontario Hydro, had "decontrolled" only two assets by 2003. In May 2001, the 6,000 megawatt Bruce nuclear plant was leased to a consortium led by British Energy. This innovative transaction, valued at $3.2 billion, was structured as an 18-year renewable operating lease held by a limited partnership. At the end of the term, designed to coincide with the remaining life of the generators, the plant reverts to OPG, which will be responsible for decommissioning. In February 2003, British Energy, under financial pressure at home, disposed of its majority interest in Bruce Power so that the facility is now leased by an all-Canadian consortium. The transaction has been successful on many fronts. When the private sector consortium first took over, four of the eight units had been laid up. Since then, two have been returned to service and Bruce Power has recently reached a tentative agreement with a negotiator from the Ontario government to restart the remaining two units.

The second OPG "decontrol" transaction was the sale to Great Lakes Power of the 490 megawatt Mississagi hydroelectric system in 2002.

The Ontario government has unveiled several initiatives to alleviate Ontario 's pending supply crunch. However, the need for additional generation over the next several years has been exacerbated by the government's oft-repeated commitment to close all the Province's coal-fired plants by 2008, eight years ahead of the previous schedule. Approximately 25% of Ontario 's generating capacity comes from coal.

The Province has issued four RFPs: the first is for 300 megawatts of renewable power; the second is for 2,500 megawatts of new generation (excluding renewables, coal and nuclear) or demand side management or demand response initiatives; the third is for up to 1,000 megawatts of new renewable energy supply; and the fourth, seeking up to 200 megawatts of new renewable energy supply, will be issued in draft around June 2005. The first RFP has concluded and 10 renewable energy projects have been announced. The second RFP is remarkable in that it combines new supply and demand side projects into a single RFP. The Province received 33 proposals for this RFP and has recently announced the first four winning projects, with a collective capacity of 1,675 megawatts, including a cogeneration project, a demand response programme, and two combined-cycle natural gas-fired generating plants. Two further projects, totalling 560 megawatts of gas-fired power, were commenced on May 30, 2005. All six projects are expected to be in service by 2008.

The counter-party is a new government-controlled entity called the Ontario Power Authority (OPA). While the OPA is not a government, or Crown, credit, as of March 16, 2005, it has been assigned an issuer rating of Aa2. The OPA has issued two RFIs with respect to new electricity generation and/or demand reduction projects in York Region.

A further impediment to private investment in generation in Ontario has been a retail price cap introduced by the previous government in late 2002.  As of April 1, 2005, the output of OPG has been set at an average price of 4.5 cents per kilowatt-hour (kWh) on OPG's regulated assets and a revenue limit of 4.7 cents per kWh on its unregulated assets. These prices affect large industrial and commercial customers. The retail price of electricity is subject to regulation by the Ontario Energy Board, which announced that as of April 1, 2005, the price of electricity for residential, low-volume and other designated consumers has been set at 5 cents per kWh for the first 750 kWh used, and 5.8 cents thereafter. The threshold will increase to 1000 kWh during winter months.  These prices will be re-evaluated at the end of one year.

In transmission, the Ontario government is unequivocal: it has committed to keep the ownership of Ontario 's electricity highway in public hands. The focus, will be on efficiency and transmission grid improvements. New transmission, especially around the Greater Toronto Area, is needed to alleviate congestion.

Under Ontario 's restructuring, municipally-owned electricity distribution utilities (MEUs) were converted to for-profit business corporations. Monopoly distribution activities were separated from retail and other competitive services. Significant consolidation of MEUs occurred before November 2001, when a temporary "transfer tax" holiday expired. Since then, some further consolidation has occurred, some involving the private sector. For example, Newfoundland-based Fortis Inc. has acquired several MEUs and in June 2004 three large municipally-owned MEUs (which were exempt from transfer tax)-Vaughan, Markham and Richmond Hill merged to form the third largest MEU in Ontario. The pressures on MEUs to respond to a performance-based regulatory regime while initiating new demand side management initiatives has lead to speculation about even greater consolidation over the next few years. A number of private sector participants, including pension funds, have expressed an interest in participating.

ALBERTA

In Alberta, deregulation became effective on January 1, 2001, with the division of generation, transmission and distribution of electricity into three distinct functions.

Alberta is unique in Canada since it never had a single vertically-integrated, provincially-owned monopoly. It more closely resembles the U.S. model. Several vertically-integrated firms operate as franchise monopolies under cost-of-service regulation, together with an integrated transmission network. Three major vertically-integrated utilities account for approximately 90% of total generation capacity. Of these, Alberta Power and TransAlta Utilities are investor-owned. The third, Epcor, is owned by the city of Edmonton. As part of the restructuring, the rights to the output of these formerly rate-regulated units were auctioned to non-affiliated buyers in the summer of 2000. These buyers are now offering their output to the Alberta Power Pool.

In April 2002, a joint venture of Montreal 's SNC-Lavalin, the Ontario Teachers' Pension Plan Board, Australia 's Macquarie and U.S.-based Trans-Elect acquired the electricity transmission business of TransAlta for approximately $850 million. The joint venture, AltaLink, now owns Canada 's first major independent transmission company.

Generation in Alberta is primarily in the private sector with 5,200 megawatts proposed for development by the end of 2006.

BRITISH COLUMBIA

Most electricity generated in British Columbia is hydroelectric and is controlled by provincially-owned BC Hydro.

In late 2002, the B.C. government began a major restructuring of its electricity sector. BC Hydro, previously an integrated generation, transmission and distribution company, is now divided into two publicly-owned Crown entities. BC Hydro continues to be responsible for generation and distribution, while British Columbia Transmission Corporation operates the province's transmission grid.

Although these two companies will almost certainly remain in government hands for years to come, significant private sector opportunities do exist. Virtually all new generation is undertaken by independent power producers, who have historically benefited from firm "take-or-pay" power purchase agreements with BC Hydro. A new round of independent power projects is well under way.

MANITOBA

The Energy Marketing Services Alliance of Manitoba (ESAM) was formed in 2002 with the goal of developing and using sustainable sources of energy worldwide. The ESAM is a P3 between private Manitoba companies and the Manitoba government that attempts to boost the number and value of international energy contracts that are awarded to Manitoba entities.

ATLANTIC PROVINCES

The largest single project on the horizon in the Atlantic Province is the proposed development of the Lower Churchill in Labrador. This is a hydroelectric resource with the potential for generating almost 3,000 megawatts. The Government of Newfoundland and Labrador has issued a request for expressions of interest, which were due on March 31, 2005.                    

HIGHWAYS

ONTARIO

Highway 407 serves the Toronto area as an alternative to Highway 401, one of the continent's most heavily used routes. Featuring the world's first all-electronic open-road tolling system (no toll booths), it was the first P3 highway project in the region, and the largest highway privatization in the world.

In 1999, Ontario privatized the highway to a consortium comprising Ferrovial/Cintra of Spain and Canada 's SNC-Lavalin and Caisse de depot. Initially funded by a combination of equity and debt, the project has since been refinanced through a series of public bond issues. In April 2002, following an earlier acquisition of a 40% interest in Cintra, Macquarie acquired a further 18.45% interest, taking its fully diluted interest in Highway 407 to 42.97%.

On January 6, 2005, the Ontario Superior Court upheld the previous decision of an arbitrator and ruled against the Ontario government in its ongoing battle with the Highway 407 consortium over the owner's ability to raise tolls.

BRITISH COLUMBIA

Partnerships BC is currently overseeing five highway projects, all of which are in different stages (as indicated in brackets): (i) the Kicking Horse Canyon Project (Phase 2), which involves the replacement of a bridge and an upgrade to 5.8 kilometres (km) of highway (RFPs due June 2005, completion expected for 2009); (ii) the Golden Ears bridge, a new six-lane bridge across the Fraser River (RFPs due June 2005, completion expected for 2008); (iii) the Okanagan Lake Crossing, a new five-lane bridge (proposal received, completion expected for 2008); (iv) the Sea-to-Sky Highway Improvement Project, which will improve the highway linking West Vancouver and Whistler, in preparation for the 2010 Olympics; and (v) the Sierra Yoyo Desan Road, a 188 km multi-user road aimed at resource companies for industrial activities (completion expected for December 2005).

Partnerships BC is also overseeing the Richmond-Airport-Vancouver Rapid Transit project, a rapid rail line linking Richmond, Vancouver International Airport and Vancouver. A contract is scheduled be awarded in 2005 and completion is expected for 2009.

ALBERTA

Construction is set to begin in spring of 2005 on a $493 million project for an 11 km section of the Edmonton ring road. The project is a thirty-year agreement between the Alberta government and Access Roads Edmonton, a consortium of twelve engineering, construction and maintenance companies. The project is expected to be completed by fall of 2007.

NEW BRUNSWICK

The New Brunswick government has signed an agreement with the Brun-Way Group, a private joint venture between SNC-Lavalin Inc. and Atcon Construction Inc., to complete the Trans-Canada Highway. Construction will begin in 2005 and is expected to be completed by November 2007. The project is estimated to cost approximately $543 million.

WATER AND WASTEWATER

ONTARIO

The need for significant improvements in Canada 's water and wastewater infrastructure was brought home to Canadians by events in the town of Walkerton, Ontario, in 2000. E.coli in the water system was responsible for seven deaths and hundreds of serious illnesses. A public inquiry into the tragedy confirmed that a major investment in Canada 's water and wastewater systems is required.

The former Ontario government introduced legislation requiring all entities providing water or wastewater services (principally municipalities) to identify their infrastructure needs, including the full cost of providing the services and the revenue available to provide them. Once the government has approved these reports, the service provider must prepare a cost recovery plan describing how it will pay the cost.

It is expected that these cost recovery plans will compel municipalities to look for new ways of reducing costs, perhaps including private sector investment.

To date, one of the main participants in Ontario 's water and wastewater sector has been the Ontario Clean Water Agency (OCWA), a provincially-owned Crown agency. For decades, OCWA has operated various water and sewage systems in the province under contract, principally with municipalities. More recently, OCWA has competed against private sector water companies for various outsourcing mandates.

Overall, the prospects for private sector involvement in water and wastewater in Canada are not particularly appealing. In September 2004, for example, the City of Hamilton voted to bring the water and wastewater service operations in-house. Following the RFP all but one proponent was disqualified on technical grounds and the City considered the one remaining bid to be too high to accept. These operations were first contracted out in 1994 to Philip Services for a ten-year term.

BRITISH COLUMBIA

Partnerships BC is overseeing two projects with respect to improving its water and wastewater infrastructure: the first is a $27.2 million partnership between the Province's Ministry of Sustainable Resource Management and EPCOR Water Services Inc. to operate a water treatment plant at the abandoned Britannia Mine site beginning in the fall of 2005; the second project involves the revival of the wastewater management system in Whistler. The Municipality of Whistler issued RFPs in April 2005.

THE PORT LANDS - TORONTO

The largest development site in Toronto is the port lands, comprising almost 800 acres of "brownfields" on Toronto 's waterfront. The vast majority of this land is government-controlled, most by the Toronto Economic Development Corporation (TEDCO). The infrastructure requirements for the site are huge: roads, bridges, sewers and water mains, flood control and the relocation of electrical utilities. Although it is still early, all three levels of government now seem committed to this important project and recognize that significant private sector involvement will be required. Financing options may include municipal bonds, tax incremental financing, grants and loans.

TEDCO has already issued a request for expressions of interest for a major film studio creating up to 7,000 direct and indirect jobs and with an overall construction value of $150 million.

Facilities

ONTARIO

The MPIR has announced that a new courthouse facility in Durham region that will consolidate six existing Durham court facilities will proceed as a P3. Completion of the project is expected for winter 2008-2009. The project will be managed by the Ontario Realty Corporation, on behalf of the Province, and bidders have been asked to submit proposals to design, build, finance and manage the facility.

OTHER PROVINCES

Construction has begun on a $300 million courthouse facility in downtown Calgary under a partnership between the Alberta government and a private group of companies that includes SNC-Lavalin ProFac Inc. and GWL Realty Advisors.  The private group will design, build and operate the facility. Completion is expected for summer 2007. P3 projects for courthouse facilities are also taking place in British Columbia —in Salmon Arm and Chilliwack —and Moncton, New Brunswick.

On May 31, 2005, the first official P3 Québec project of substance ($125 million) was announced with the Government of Québec inviting four consortiums to make proposals in connection with the construction, management and operation of a new facility to house the Montréal Symphony Orchestra.

CONCLUSION

Successful P3 projects such as those discussed above continue to demonstrate that private sector funding and innovation can contribute significantly to vital infrastructure. The recent endorsement of the P3 concept under the new AFP banner in Ontario is a much-anticipated positive development.

 


1 The authors wish to thank Diane Yu and David Cummings of Gowlings' Toronto office for their very able assistance in updating this article.

2 Ontario Ministry of Public Infrastructure Renewal, Building a Better Tomorrow: An Infrastructure, Planning, Financing and Procurement Framework for Ontario 's Private Sector (ON: Queen's Printer for Ontario, 2004).

3 See above, note 2.

4 The Canadian Council for Public-Private Partnerships, online: http://www.pppcouncil.ca/pdf/p3poll.pdf.

5 The Canadian Council for Public-Private Partnerships, online: http://www.pppcouncil.ca/faq.asp.

6 See above, note 3

7 Canada, Standing Senate Committee on Social Affairs, Science and Technology, "The Health of Canadians - The Federal Role: Recommendations for Reform", vol.6 (October 2002) at 9. See also "Building on Values - The Future of Health Care in Canada," (November 2002).

8 M. Gurbin, "Capital Investment in Ontario 's Hospitals" (Ontario Health Association/HCFMA presentation 8 September 2003).

9 Mark Mullins, "2028 or Bust: Ontario 's Unsustainable Hospital Funding" The Fraser Institute (March 2004) at 1.

10  RT Associates Ltd., Opportunities for Infrastructure Partnerships: Discussion Paper (2003) at 43, online: Government of the Northwest Territories Municipal and Community Affairs