March 25, 2018

Manitoba Is Not Backing Away from P3s

by Mark Romoff, President and CEO, The Canadian Council for Public-Private Partnerships

This opinion editorial was published on March 25, 2018 in the Winnipeg Sun.

This may sound unusual coming from the Canadian Council for Public-Private Partnerships (CCPPP),  but, as the the leading voice for public-private partnerships (P3s) in Canada, we whole heartedly endorse Premier Pallister and the Manitoba government’s approach to building five new schools in the province – even though, in the end, they decided against using the P3 model.

Premier Pallister announced his intentions last May, at an event co-hosted by CCPPP and the Winnipeg Chamber of Commerce, to explore the possible benefits of a P3 to build schools. It was clear at the time he wanted to take a thoughtful and pragmatic approach. He was well advised.

P3s are not a one-size-fits-all solution to building infrastructure. They are successful when done for the right reasons and on the right projects. They are typically highly complex contracts that extend over 20 or 30 years, so they require rigorous due diligence before an RFP is even issued.

Above all, a P3 must demonstrate real value for taxpayers’ money. KPMG conducted a value for money analysis that resulted in Budget 2018 indicating the government has opted for a modified traditional procurement rather than a P3.

All indications are this decision was not driven by ideology, but was based on evidence. The Premier’s willingness to explore the benefits of a P3 model led to the modified plan laid out in Budget 2018 – which draws on many of the best practices found in the P3 approach. It demonstrates greater value for money. So much so, the government was able to add a fifth school to the project, which simply could not have happened without the P3 due diligence. This is great news for Manitoba students, teachers, parents, and all taxpayers.

We have a hard time arguing with that process and those intentions. Other jurisdictions would do well to learn from this example of a government willing to conduct its due diligence and avoiding the “we’ve-always-done-it-that-way” trap.

To be clear, this in no way means the government has turned its back on P3s. On the contrary, we know the Premier remains fully committed to the benefits of P3s and partnering with private enterprise in Manitoba.

In fact, there are half a dozen projects in the province to illustrate how well they work - including the Chief Peguis Trail extension and the Disraeli Bridges in Winnipeg. Manitoba’s P3s have also saved taxpayers upwards of $171 million.

They count among the 272 active P3 projects in Canada, with those already in operation or under construction, valued at more than $125 billion. Overall, the Canadian Centre for Economic Analysis has independently estimated that P3s have saved Canadians as much as $27 billion over the last 25 years. They are built 13% faster than traditionally procured projects adding $11 billion in value to Canadian economy.

The P3 track record in Canada speaks for itself. We know the model will be a critical tool for governments across the country as they explore the ways and means of addressing the infrastructure gap.

We know Premier Pallister understands the benefits of the P3 model. We also know, based on his openness to explore all options for the building of five new schools, he has his eye on the real prize – and that’s getting the best possible return on tax dollar investments.

We commend him for that.