CCPPP: Key takeaways from provincial ministers
Lloyd Hines, Minister of Transportation and Infrastructure Renewal, Government of Nova Scotia
On the subject of partnerships, Nova Scotia minister Lloyd Hines highlighted the need not only for the public and private sector to work together, but also for different levels and locational governments to collaborate. He said we are in a “world of collaboration today, courtesy of globalization”. He said Nova Scotia is encouraging investment by balancing its own budgets to “allow us to invest in Capital Growth”, along with increasing “red tape destruction”, and trying to ensure the balance of risk is not tipped toward the market players. Hines further confirmed they are working with other provinces, while highlighting that “Municipalities are leaders in the infrastructure creation process”. He feels the recent consolidation from 55 to 50 municipalities should help reduce regulatory burden.
Hines confirmed he is making a date with Prasad Panda, Minister of Infrastructure for Alberta, to follow up their shared panel and conversations at P3 2019. Their governments are set to work together on the creation of a new gas line between Alberta and Nova Scotia.
Hines can see the advantage of a P3 deal for future projects in that sector and also the potential for cross-jurisdictional P3s in the future, which he believes would mean less interference with a project by inter-municipal regulations. He also feels in such partnerships, the private partner can act as a mediator, whilst bringing experience of best practices from other projects.
In the minister’s panel at P3 2019, Hines insisted his infrastructure pipeline would “stay the gap” despite upcoming election results. He says the Canadian model of governance helps enable this as it enables a continuity of government. Moreover, Nova Scotia has recently announced its new ICP program, a 10-year irrevocable commitment no matter who the government is. Hines said this is a good move in a situation of a minority government under duress, as the program cannot simply be cancelled to cut costs, meanwhile relationships stay stable. The 10-year commitment will be key to advancing projects, particularly seasonally-affected studies and projects.
Hines feels his government received undue partisan criticism for his province’s use of P3 structures for previous school developments. He says the model was “misunderstood”, particularly in relation to costs. When the Nova Scotia government bought the schools back, he advises, they were returned in a good state, at a high level of maintenance. Hines feels this is easier to ensure through P3s, as maintenance can be inherent and built into contracts for P3s, placing this longer term burden on the private sector. He is also looking to ensure this for all future projects, through the design of the redemption phase and deferred maintenance agreements.
Finally, he praised the ability of P3 programs in Nova Scotia to meet the skilled labour shortage, with their ongoing apprenticeship and opportunity program. He said provinces need private partners as they cannot take on all of the risk; “If you eat too much ice cream you’re gonna get sick”. Specific to Nova Scotia, he added, is a need for external expertise, and experience to be shared with local players. He said there was always the question present as to whether you grow your own expertise, or do you reduce costs by importing it from abroad?
Gordon Wyant Deputy Premier, Minister of Education and Minister Responsible for SaskBuilds, Government of Saskatchewan
Saskatchewan Deputy Premier Gordon Wyant highlighted the challenges of regulation both within Canada and internationally, such as environmental legislation.
Wyant said: “We have a real strategy in Saskatchewan to deal with the environment, but if we overregulate we lose our competitive advantage”. He said that national rules can be tricky for provinces, with environmental regulations particularly difficult for Saskatchewan, due to its reliance on coal. Conversely, he believes other provinces have a competitive advantage as they have the right geography to use hydroelectricity. This builds internal trade barriers, while enhancing the need for advanced cooperative federalism to improve the quality of policy and transportation, to solve trade corridors. Similarly, he views carbon taxation as potentially damaging Canadian firm’s ability to compete with US firms.
On working with other provinces, Wyant said “We built our organization from the cooperation and assistance of Ontario and BC”, for example cooperating on Energy West. He said that while Alberta was using P3s first, and stopped due to the change in government, Saskatchewan has since adopted the model, and thus is an advisor to Alberta as they begin to re-engage with the market. He also hinted at the possibility of future cooperation with Nova Scotia.
On indigenous communities, Wyant told P3 Bulletin that “Engaging our First Nations community in our province is crucial”. He said that while there had always existed a principle of “economic reconciliation” to those communities, he realises that the Saskatchewan economy depends on its significant indigenous population and their involvement, and as such his government is now looking to offer “a hand up, not a handout”. This comes by engaging, and getting First Nations more actively involved in talking about projects.
The Saskatchewan government has set up “Priority Saskatchewan”, aimed at demonstrating their commitment in contracts to value for taxpayers.
Laurie Scott, Minister of Infrastructure, Government of Ontario
Ontario’s Minister of Infrastructure Laurie Scott highlighted the importance of transit to her government, in line with the 13 important transit projects recently announced as part of a CAD65bn pipeline. She said, however, that moves to hasten transit development must always consider indigenous community and environmental obligations. Scott praised Ontario’s “incredible” working relationship with First Nations, including a duty to consult.
Ontario should be attractive to market cooperation, Scott added, due to its proven “adaptability, aggressive moves to push on with P3s, and history of cooperation”. The aggression to move forward is shown by steps to quicken the processes around environmental assessment in a responsible way and steps to increase cooperation. Scott referred to changes made in the Union Station project, to transfer some of the risk from the private sector back to the State, and address “miscommunication”.
She said Ontario has also seen that the market “wants more room to innovate”, and has allowed for this by pushing a cultural shift towards innovation in Infrastructure Ontario; consulting 60 different infrastructure experts for the CAD65bn pipeline, as well as opening an unsolicited proposal portal in October. Here, all “reasonable arguments will be given a fair hearing”.
Scott noted the trend towards ever larger projects reduced interface risks, but could mean less bids from smaller companies, reducing the competitive bidding environment. Pressed on whether the increasing size of projects places lasting restrictions on smaller Canadian companies in bidding for projects, Scott said that the relationship between larger and smaller companies was “symbiotic”, as any larger companies in bids need talent on the ground. She praised the benefits of larger foreign companies using local companies, which helps them grow. She also suggested that using P3s for larger projects was beneficial as they were more frequently quicker, on budget, and on time.
Scott said the province would like to help other governments replicate Infrastructure Ontario in their own provinces, and that while they are always open to working with other provinces, this is currently their preferred structure for doing so.
Prasad Panda, Minister of Infrastructure, Government of Alberta
“Alberta has always believed in a balanced approach to infrastructure”, declared Prasad Panda. The province has a bold, detailed plan to reclaim its space in the P3 market. “Pipelines are our lifelines,'' he said, referring to Alberta’s detailed ambitions and renewed priority to use P3s, in order to “(maintain) fiscal balance while delivering critical infrastructure”.
He said cost was presently Alberta’s top priority due to fiscal restraints, but ultimately aims to create sustainable, affordable infrastructure.
In partnership Alberta is ready to invest both capital and a large workforce in capital projects. Panda praised the province’s energy and export infrastructure, and the 200,000 Albertans looking for work and due to be retrained to modern sectors, as great potential assets to partners. Alberta, while unable to accept heavy levels of risk due to fiscal issues, is aiming to bring back businesses that have left the province in tough economic times of late. The provincial government plans to cut red tape by one third, as well as cutting corporation tax by the same amount.
Panda said Alberta is “always open” to working with other governments, and is currently looking at experts from Infrastructure Ontario. He revealed he has “found doing business with the EU” easier than with other Canadian provinces. He would be open to the idea of interprovincial P3s, and any other ideas to develop a single market in Canada by removing internal trade barriers.