The Canadian Council for Public-Private Partnerships

PPP in Canada: A Model for Public Infrastructure Procurement Mark Romoff President & Chief Executive Officer

Seminar on Public Private Partnerships (P3) Oslo, March 5, 2015

Infrastructure Investment The Global Challenge

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Global Infrastructure Deficit

$57 trillion Roads

$16.6 TN

Power

$12.2 TN

Water

$11.7 TN

Telecommunications

$9.5 TN

Rail

$4.5 TN

Airports

$2.0 TN

Ports

$0.7 TN

Source: McKinsey Global Institute, “Infrastructure productivity: How to save $1 trillion a year”, January 2013

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Infrastructure Investment

• Drives Jobs

• Drives Growth + Prosperity • Drives Global Competitiveness But some realities....

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Infrastructure Challenge

Infrastructure Deficit

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Fiscal Reality

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Innovative Approaches 5

PPP Benefits

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P3 Benefits • Integration of project design, building, financing and maintenance into a single system • Allocation of risks to the party most able to deal with them  Reduces costs and increases the chances of project success

• Specification of outputs /outcomes rather than inputs  Encourages innovation and increases productivity and quality in delivery

• A payment system that aligns incentives and controls behaviour 7

P3 Benefits • Competitive contracting for the whole-life cost of a project  Encourages long-term thinking and stewardship of assets

• Financing mechanism that encourages rigorous due diligence  Increases the likelihood of a project being delivered on time and on budget

• Putting private capital at risk for the whole lifetime of the project (20 years and beyond)  Provides an in built risk assessment system for the entire length of the contract

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Canadian PPP Market

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Canadian PPP Overview

• 22 year history

• 221 projects • $70.4+ Billion

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Models of PPP in Canada

Source: The Canadian Council for Public Private Partnerships 11

PPP Projects by Sector Sector Transportation Hospitals & Healthcare Justice/Corrections Energy Education Recreation & Culture Environmental Real Estate Defence Government Services IT Infrastructure Total

Number* 49 83 19 6 11 18 24 4 1 4 2 221

* Includes projects with committed PPP Canada funding that have not gone to RFQ yet. ** Includes only actual cost figures released after financial close.

Value ($B) ** 31.4 22.4 5.5 4.5 1.7 1.4 1.2 0.9 0.9 0.5 0.0 70.4+ 12

PPP Projects by Location Province Alberta British Columbia Manitoba New Brunswick Newfoundland & Labrador Northwest Territories Nova Scotia Nunavut Ontario Québec Saskatchewan Federal Total

Number 18 39 5 11 1 2 3 2 106 17 8 9 221 13

PPP Projects by Status 140

128

120 100 80 56

60

37

40

20 0

Operational

Under Construction

In Procurement

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Canada’s P3 Model

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Canadian P3 Results • On Time • On Budget

• Less Cost • Less Risk • 290,680 Direct Jobs • $25.1B Contribution to Direct GDP • $9.9B Cost Savings

• $7.5B Tax Revenue

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Canadian P3 Agencies • Federal – PPP Canada Inc.

• Provincial – Infrastructure Ontario – Partnerships BC

– Alberta Infrastructure – Infrastructure Québec – Partnerships New Brunswick – SaskBuilds 17

Success Factors: Canadian P3 Model

• Committed Governments – P3 Champions

– Consistent Deal Flow

• Strong Legal Framework

• Value for Money – Performance-based Contracts – Appropriate Risk Transfer – Built-in Lifecycle Maintenance 18

Success Factors: Canadian P3 Model

• Deep Financing Markets • Public sector expertise – Institutionalized through dedicated agencies – Standardized Documentation

• Procurement – Competitive – Efficient – Transparent and fair 19

Canadian P3 Projects

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Canada Line Vancouver, BC

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Bridgepoint Health Toronto, Ontario

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Alberta Schools Alternative Procurement (ASAP I)

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Waterloo Region Consolidated Courthouse Waterloo, Ontario

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Goderich Water & Wastewater System Ontario

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Montréal Concert Hall – Maison Symphonique, Québec

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Single Room Occupancy Project British Columbia

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Communications Security Establishment Canada Long-Term Accommodation Project, Ottawa, ON

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Pan Am Athletes’ Village Toronto, Ontario

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Next Generation of P3s Canada and Beyond

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The Next Generation of P3 in Canada Players • Provinces • Territories • Municipalities • First Nations

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The Next Generation of P3 in Canada Sectors • Urban Transit • Water/Wastewater • Social Housing • Green Energy • Broadband

• Government Services 32

Taking Partnerships Global Location: Melbourne, Victoria, Australia Value (NPV): A$1 billion Financial Close: 16 December, 2011 Completion Date: Early 2016 Duration: 25 years Public partner Victorian Government

The Victorian Comprehensive Cancer Centre (VCCC)

Private Partner Plenary Group (sponsor and investor) Grocon and PCL (Construction JV) Honeywell (facilities/ maintenance manager)

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About CCPPP

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CCPPP Mission

To promote innovative approaches to infrastructure development and service delivery through public-private partnerships with all levels of government

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Who We Are • Founded in 1993 • Non-profit • Member-sponsored • Non-partisan • National Representation • International Members

• Honorary Chair – The Hon. John Manley 36

What We Do • Promote collaborative partnerships between public sector agencies/departments and industry

• Educate stakeholders and the community on the economic and social benefits of P3s • Advocate for evidence-based public policy in support of P3s • Facilitate the adoption of international best practices • Promote Canada’s P3 model and expertise globally 37

Our Focus • Research • Awareness Raising / Education

• Cross-Canada Events • Annual Conference • National Awards for Innovation & Excellence in PPPs • Case Studies • Project Database

• National Opinion Poll • Next Generation Leaders (YLI, WIN, Students) 38

Project Database

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Research

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2013 National Awards Case Studies

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WWW.P3-2014.CA

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The Canadian Council for Public-Private Partnerships

www.pppcouncil.ca

@pppcouncil