Infrastructure P3s in the Multi-Level Governance Context Within the Canadian Federal System: An Overview of the Organizational, Financial and Policy Frameworks
by
Joseph Garcea
Presented to the Session on “Collaborating and Partnering for Public Policy Action”
The International Conference on Public Policy
Milan, Italy July 4, 2015
Preliminary Draft: Please do not cite without permission of the author
Table of Contents
1. Introduction 1
2. The Increasing Reliance on Infrastructure P3s 3
3. The Canadian Polity & The Infrastructure P3s 5 3.1 Jurisdictional Responsibility for Infrastructure 5 3.2 Number of Governments and/or Public Authorities Involved in P3s 6 3.3 Complexity of the P3 System(s) in Canada 6
4. Federal Infrastructure P3 Frameworks 7 4.1 Organizational Frameworks 7 4.2 Financial Frameworks 7 4.3 Policy Frameworks 9
5. The Provincial Infrastructure P3 Frameworks: Comparative Overview 11 5.1 Organizational Frameworks 11 5.2 Financial Frameworks 15 5.3 Policy Frameworks 16
6. Municipal Infrastructure P3 Frameworks 20 6.1 Organizational Frameworks 20 6.2 Financial Frameworks 21 6.3 Policy Frameworks 21
7. Key Features of P3 Systems in Canada 22 7.1 Complex System(s) 22 7.2 Vertically and Horizontally Linked/Integrated System(s) 22 7.3 Provincially and Municipally Differentiated System(s) 23 7.4 Asymmetrical System(s) 23
8. Directions & Focus For Further Research 24
9. Conclusion 25
References 26
1 1. INTRODUCTION1
In Canada, as in many other countries, the number and types of public-private partnerships (P3s) have been increasing substantially during the past two decades. A substantial number of those partnerships, and particularly the largest ones have tended to emerge in the procurement of various types of infrastructure.2 Invariably, the public sector partners in such partnerships have been the federal, provincial, municipal governments and some of their respective authorities, as well as Aboriginal governments and authorities.
In Canada and elsewhere much of the P3 literature tends to focus primarily on the types of partnerships, the roles and responsibilities of various stakeholders or partners involved in partnerships, and the arguments made by proponents and opponents based on considerations related to costs and benefits of partnerships (Loxley 2010; Osborne 2000). Much less attention is devoted to analyzing either of the following two facets of P3s in Canada: (a) the organizational, financial and policy frameworks that have been established to deal with P3s in the multi-level context of Canadian federalism and to some extent also Treaty federalism;3 and (b) the impact of multilevel governance on P3s and the impact of P3s on multilevel governance.4 The paucity of literature devoted to those two facets of P3s in Canada is somewhat surprising given that a substantial body of literature has been emerging on multilevel governance within the Canadian federal system (Horak and Young 2012) as well as other federal systems (Lazar and Leuprecht 2007).
This paper is the first part of a two-part research project designed to contribute to analyzing both of those major facets of P3s in Canada. However, its central focus is on the first facet. Thus, the overarching purpose of this paper is to provide an overview of the organizational, financial and policy frameworks that have been established at the federal, provincial and municipal levels to deal with P3s in Canada as well as the factors that have shaped those frameworks during the past two decades. This purpose is based on the premise that an understanding of the fundamental features of the institutional components of systems is essential for a fuller understanding of their impact on policies, programs and politics (and vice versa) which is evident in some extant comparative works on institutional and governance structures of P3s (e.g., OECD 2010).
1 The author acknowledges the very valuable research assistance of Christina Beauregard. 2 For purposes of this paper, infrastructure refers to two major categories of projects— transportation infrastructure and major community facilities needed by municipalities and other major community service provider agencies (e.g., water and sewage treatment facilities, health facilities, educational facilities, etc.). 3 Treaty federalism refers to the federal principles and arrangements embodied in the treaties between First Nations and the Canadian Crown negotiated and signed largely in the 1800s and the so-called ‘modern treaties’ that have been negotiated and signed in recent decades. 4 For purposes of this paper multi-level governance refers to the complex interplay in policy-making and decision-making involving combinations of governmental and non-governmental stakeholders at the local, provincial, and national levels.
2
The central objectives of this paper are fourfold: • to provide a brief overview of the factors that contributed to the emergence of and increased the reliance on infrastructure P3s within the Canadian federal system; • to provide a comparative overview of the federal, provincial and municipal organizational, financial and policy frameworks most directly related to infrastructure P3s; • to highlight some of the key features of those frameworks, which collectively constitute, the P3 system(s) in the context of multi-level governance within the Canadian federal system; • to outline some directions for further research regarding P3s and multilevel governance within the context of the Canadian federal system.
2. INCREASING RELIANCE ON INFRASTRUCTURE P3s IN CANADA
To reiterate, in Canada, as in many other countries, during the past two decades P3s have become increasingly prevalent in their manifold forms, ranging from partnerships that merely allow the private sector partner(s) to operate public owned infrastructure through leasing arrangements, to those that also allow the private sector partner(s) to become involved in designing, building, financing, or even owning some components of public infrastructure either in whole or in part at various points in time (Loxley 2010, 1).
The principal factors that have contributed to the prevalence of P3s in Canada have been a combination of what the ‘infrastructure deficit’ or ‘infrastructure gap’, and fiscal challenges, and the ideological orientations and the special interests of governmental and non-governmental stakeholders. Collectively those deficits, challenges, and ideological orientations provided the impetus for the Alternative Service Provision (ASP) movement and models.
The ideological orientations of governmental and non-governmental stakeholders have been rooted in neo-liberal and neo-conservative precepts of a ‘hollowed-out’ and ‘functionally limited state’ that would perform primarily a “steering rather than rowing role”. Part and parcel of those precepts have been the notions regarding the virtues of a realignment of functions between the governmental and both the corporate and not-for- profit sectors through various means, including various types of partnership arrangements.
The interests of governmental stakeholders have been rooted both in policy rationality and political rationality. In the case of policy rationality, governments have opted for P3s to help them deal both with their respective massive infrastructure deficits and their fiscal challenges. In the case of political rationality, they have opted for P3s in an attempt to curry favour and votes among voters who benefit from the resulting infrastructure projects. The interests of non-governmental stakeholders within the for-profit sector have
3 been rooted primarily in the pervasive phenomenon of “private sector opportunism” (Loxley 2010, 7-8) and business rationality in which profit maximization is of paramount importance. As suggested by one analyst: “The convergence of interests of neo-liberal states and the private sector is, at root, the basis of the growing use of P3 arrangements as alternatives to conventional methods of delivering public services and infrastructure in Canada, the United States, the U.K. and around the world” (Loxley 2010, 8).
At least two other major factors have contributed to the prevalence of P3s in Canada during the past two decades. The first might be termed the ‘push-pull’ factor. All the aforementioned factors combined to create multiple and complex ‘push-pull dynamics’ between the various governmental and non-governmental stakeholders. This dynamic results from prospective or actual partners either pushing or pulling and others being pushed or pulled to participate in P3s (Kitchen, 2006; TD Economics 2006; Vander Ploeg 2006; Hamel 2007). In the words of one author who commented on this phenomenon in an analysis of the municipal involvement in P3s: the “…higher level governments have been pushing the concept of P3s, to the point of forcing municipalities to consider using them”(Hamel 2007).
Another major factor that accounts not only for the increased number of P3s, but also for the parallel movement of various orders of government to become involved in partnerships, is policy literature is referred to as ‘policy learning’ (learning from their own experiences and experiences of others) and ‘policy emulation/imitation’ (copying in whole or in part the policy initiatives of other governments). Various orders of government have been monitoring not only for what purposes they are using P3s for infrastructure projects, but also how they are creating, operating and evaluating such projects. This factor accounts for the striking similarities and convergence that have bee emerging in the statutory, policy, organization and funding approaches to infrastructure P3s.
A full understanding of infrastructure P3s in the context of multi-level governance within the Canadian federal system requires an understanding of the following three matters: (a) the alignment of jurisdictional responsibilities of the various orders of government and public authorities for infrastructure; (b) the number of governments or public authorities that might be involved in a given infrastructure P3 at any given point in time; and (c) the complexity resulting from multi-level governance for the creation, operation, evaluation and termination of P3s in Canada.
4 3. THE CANADIAN POLITY & INFRASTRUCTURE P3S
3.1 Jurisdictional Responsibility for Infrastructure In the case of jurisdictional responsibility for infrastructure it is important to note that it can rest with one or more orders of government, public authorities and agencies. For example, some transportation infrastructure is either exclusively or primarily the responsibility of the federal government or some of its agencies (e.g., international transportation infrastructure such bridges between Canada and US, harbours/ports, military infrastructure such as military bases and other types of military facilities, etc.). Provincial governments are responsible for some of the major transportation infrastructure within their borders (e.g., provincial highways). Municipal governments are responsible for transportation infrastructure within their local or regional boundaries (roadways, and overpasses), as well as various other types of infrastructure (water, sewer, recreational facilities, etc.) (Vander Ploeg 2006).
In addition to these three orders of government some community infrastructure is the responsibility of First Nations governments within their reserve boundaries (e.g., transportation infrastructure such as roadways, community services infrastructure such as water and sewage treatment facilities, schools, community halls, recreation facilities, etc.).
Finally, some infrastructure is the responsibility special authorities operating within the aegis of any of these orders of government. For example, provincial governments have regional and local authorities within their aegis (e.g., school boards and health boards), which need large and costly facilities (e.g., schools and hospitals) in providing the specialized services that fall within the scope of their respective mandates.
3.2 Number of Governments and/or Public Authorities Involved in P3s
Notwithstanding the jurisdictional responsibility for various types of infrastructure, in some instances more than one of the aforementioned orders of government, authorities or agencies become involved in a particular P3 projects because of their extensive reliance on sharing the costs of many P3 projects, and especially the larger infrastructure projects. The result of such extensive reliance on joint cost-sharing arrangements is that rather than one government or public authority being involved in a P3 project, two or more become involved. In becoming involved, of course, their roles and responsibilities are not necessarily the same. Indeed, in most instances only one government or public authority is the legal contracting party for the procurement, and the others may simply be contributory members whereby they simply contribute funds, lands or other resources to a particular project. For those governments or public authorities that are not legally committed or bound as members of the procurement or contracting team, their role is to make the contribution and their responsibility is to ensure that the contribution is used for the stated purposes. Details aside, the important residual point here is that more than one government, public authority or public agency may be, and in most cases are, involved in a partnership, but not all of them have the same roles or legal responsibilities.
5 3.3 Complexity of the P3 System(s) in Canada
Multilevel governance in relation to P3s within the context of the Canadian federal system is quite complex. The complexity is created by several interrelated factors: the first is the multiplicity of governments and public authorities that exist within the Canadian federal system at the national and sub-national levels; the second is the exclusive or shared responsibilities that they have for various types of infrastructure; and the third is the existence of the multiplicity of organizational, financial and policy frameworks of the governments, public authorities and public agencies that exist at the national and sub-national levels, which are discussed in the subsequent sections of this paper. Invariably, the dynamic interactions between those elements of the infrastructure P3 systems render the creation, operation, evaluation and termination of infrastructure P3s highly complex.
Before turning to the next section, it is important to note that the procurement of transportation infrastructure in the context of Canadian federalism has been complex and has occurred in a multi-level governance context for a long time. The reason for this is that inter-governmental collaboration and cost sharing has been prevalent in procuring transportation infrastructure. The major change in recent decades, of course, has been the involvement of private sector entities as ‘partners’ with shared, roles, stakes and risks in the context of P3 procurements, rather than simply as service providers on a contract or fee for service basis pursuant to the traditional procurement models at least for some transportation infrastructure projects.
4. FEDERAL P3 FRAMEWORKS
The existing federal organizational, financial and policy frameworks for P3s have been developed incrementally by successive Liberal and Conservative governments since the mid-1990s. The genesis of those frameworks can be traced to the Liberal government’s Throne Speech of 1997 in which it articulated its intentions to pursue partnerships with for-profit and not-for profit entities. Thereafter, several federal departments started producing documents that provided the rationale, and in some cases fledgling policy pronouncements and frameworks, related to P3s. Notable examples include documents on the use of P3s for highways, municipal infrastructure, and for P3s in other sectors such as industry, agriculture and Aboriginal communities (Loxley and Loxley 2010, 42; Hambros 1999a & 1999b; Canada 2001, 2003 & 2004). Then in 2004 the Paul Martin Liberal government created the position of Parliamentary Secretary for the Minister of Finance with special responsibility for P3s in dealing with the P3 agenda and files. That year it also articulated the principle that federal infrastructure funding would be tied to P3s, and that the “… burden will be on the proponents of a project to demonstrate that a P3 is inappropriate” (Loxley 2010, 42; Hasselriis 2004, 3). This principle was upheld by the successive Stephen Harper Conservative governments that have been in power since 2006.
6 The key elements of the federal government’s P3 frameworks consist of three major agencies, three major funds, a few key statutes and policy documents, which are discussed in turn below.
4.1 The Federal P3 Organizational Framework The three principal federal government agencies that deal with infrastructure P3s, albeit in different ways and to varying extents, are Industry Canada, PPP Canada, Aboriginal Affairs and Northern Development Canada (AANDC)—two of which are line department and the other a Crown corporation.
Industry Canada is a large federal line department responsible for various matters related to industrial and commercial development in Canada, including funding support for the development and maintenance of the requisite infrastructure. Its mandate includes providing funds either through traditional forms of procurement or through P3s for infrastructure projects from the Building Canada Fund.
PPP Canada is a federal Crown corporation, established in 2008 by an Order in Council of the federal cabinet, that reports to Parliament through the Minister of Finance. The core mandate of PPP Canada is to “…provide expertise and advice in assessing and executing P3 opportunities at the federal level as well as leveraging greater value for money from Government of Canada investments in provincial, territorial, municipal and First Nations infrastructure through the P3 Canada Fund” (Canada 2015a). Since 2011, PPP Canada has been responsible for applying the ‘P3 Screen’ to any project funding applications within the scope of the Building Canada Fund for projects worth $100 million or more that are advocated or supported by any public or private sector proponents of any infrastructure project.
Aboriginal Affairs and Northern Development Canada (AANDC) is a line Department that is primarily responsible for a wide array of matters including infrastructure, related to Aboriginal communities, in the ten provinces and the three northern territories.
4.2 The Federal P3 Financial Framework Those three federal agencies are responsible for three major funds established within the scope of what is known as the ‘Building Canada Plan’ from which infrastructure P3s may be funded, subject to some criteria or conditions related to each one (Canada 2015b). The three major funds are the Building Canada Fund, the First Nations Fund, and the Public-Private Partnership Canada Fund (P3 Canada Fund), which are described in turn below.
4.2.1 Building Canada Fund Industry Canada is responsible for the Building Canada Fund (CBF), which has been established within the scope of the “Canada Strategic Infrastructure Fund Act” originally enacted in 2002 (Canada 2002). The Building Canada Fund has two major funding program components—the National Infrastructure Component (NIC) and the Provincial/Territorial Infrastructure Component (P/TIC).
7 (a) National Infrastructure Component of CBF The National Infrastructure Component (NIC) supports projects of national strategic significance, that have broad public benefits, and that contribute to Canada's long-term economic growth and prosperity (e.g., transportation and trade corridors). Funding from NIC can be accessed only through applications pursuant to requests for proposals; there are no pre-determined provincial or territorial allocations. Any projects with eligible costs over $100 million will be required to undergo a P3 Screen that is administered by PPP Canada. For any P3 projects proposed by for-profit private sector companies the maximum contribution is 25%. For all other eligible projects the federal government will generally cover only one-third of the costs, but in exceptional cases it will consider funding up to 50% for provincially owned highways and major roads, as well as public transit projects (Canada 2015c).
(b) Provincial/Territorial Infrastructure Component of CBF The Provincial/Territorial Infrastructure Component (P/TIC) of the Building Canada Fund, which has been allocated $10 billion, is consists of two sub-funds: the National and Regional Projects Fund (NRPF), which is devoted to projects in communities with a population more than100,000 (Canada 2015d); and the Small Communities Projects Fund (SCPF), which is devoted to projects in communities with a population less than 100,000. Each province and territory will receive a base amount of $250 million plus a per capita allocation. Eligible projects will be for the construction, renewal, rehabilitation or material enhancement of infrastructure for public use (Canada 2015d).
4.2.2 FNIF - First Nations Infrastructure Fund The First Nations Infrastructure Fund (FNIF) consists of funding transferred and from the Gas Tax Fund, and the National Infrastructure Component of the New Building Canada Fund. The FINF is managed by Aboriginal Affairs and Northern Development Canada (AANDC). Money from the FNIF is allocated to First Nations communities primarily through various programs and projects within the scope of the First Nations Infrastructure Investment Plan (FNIIP) (Canada 2013b). However, they also receive funding for infrastructure programming from other funds of AANDC and other federal ministries and agencies. Such funding can be used for infrastructure designed and utilized only by First Nations communities, or for infrastructure that they might share either with other First Nations or non-First Nations communities (Canada 2014, 2015e & 2015f).
4.2.3 Public Private Partnerships Canada Fund (P3 Canada Fund) The third major fund within the scope of the Building Canada Plan is the Public Private Partnerships Fund (P3 Canada Fund) (Canada. 2015g).This fund, which was established in 2008, is managed by PPP Canada. The purpose of this fund has been to supplement other contributions under the original Building Canada Fund and the New Building Canada in supporting projects to be procured using a P3 approach. Since its was established the fund has had $1.25 billion to be used over five-year period. The fund included $10 million to cover up to half the cost of procurement option assessments, and to develop municipal P3 business plans (with a limit of $200,000 per project) (CUTA 2014).
8 All applications to the funding programs with the New Building Canada Fund for projects worth more than $100 million will receive a screening assessment to determine whether P3 procurement could provide better value for money than traditional forms of procurement. If, as explained in more detail below, a P3 procurement could be a viable option, the federal government will make it a condition of its contribution towards that project; the maximum federal contribution from all sources for the projects will then be a maximum of 25% in any of the ten provinces, and a maximum of 75% in any of the three territories. To be eligible for this fund the P3 projects must be supported by provincial, territorial, municipal or First Nations partners. PPP Canada Inc. can also use the P3 Canada Fund to offer loans, loan guarantees, non-voting shares, and repayable contributions to private partners (Canada 2008a).
4.3 The Federal P3 Policy Framework
For analytical purposes it is useful to distinguish between three major facets of the P3 policy framework— (a) policies on undertaking P3s, (b) policies on funding P3s, and (c) policies on creating and managing P3s. Each of these facets is discussed briefly in turn below.
4.3.1 Federal Policies on Use of P3s Federal policy on use of P3s for infrastructure procurement purposes is that alternative financing arrangements, including P3s are an acceptable, desirable and in some cases even mandatory. In effect, the federal government has adopted a policy that P3s should be considered and used for procuring infrastructure. The two major considerations or criteria for determining whether to use P3s are costs and risks. In the case of costs the focus is both on capital building costs and also maintenance and operating costs over time. In the case of risks the focus is on various types of risks, including financial, legal, safety and national security risks. The critical decision-making calculus is based on reducing costs and limiting risks for the government and its ministries and agencies. This is true of the procurement of all P3 projects regardless of the form or extent of federal government involvement.
4.3.2 Federal Policies on Funding P3s Federal policies on funding P3s consist of criteria regarding qualifying for federal funding for projects procured as P3s. One policy is that any infrastructure project for which a P3 procurement process is being considered or has been approved in principle can seek and receive federal funding. This is true of infrastructure projects that involve any governmental or public sector agency at the national, provincial or local levels. Whether funding is made available is contingent on the eligibility of the project from any federal funding program, including the various funding programs within the scope of the ‘Building Canada Plan’.
Another element of federal policies on funding P3s is, as noted in a previous section above, the explicit requirement for any projects worth more than $100 million seeking funding from the various funding programs within the Building Canada Fund (i.e., the National Infrastructure Component or the Provincial/Territorial Infrastructure Component) is subjected to a mandatory screen administered by PPP Canada. The
9 purpose of the screen is to determine whether it is feasible for the project to be procured through a P3. This includes projects for which any federal agency is a proponent as well as projects seeking federal funding from the Building Canada Fund for which any provincial, territorial or municipal governments, or any regional and local authorities are the proponents. Any projects subjected to the screen that “…demonstrate potential to succeed as a P3 will be required to work with PPP Canada to develop a Procurement Options Analysis” (Canada 2015h). To assist PPP Canada and proponents in developing the procurement options analyses for proposed projects, the federal government has allocated $10 million and PPP Canada has produced The Guide to the new Building Canada Fund P3 Screen-Suitability Assessment (Canada 2015i).
The P3 project screening policy stipulates that if the PPP Canada screening process indicates that P3 procurement is suitable and feasible for proposed project, funding from the Building Canada Fund will only be provided if the proponents agree to procure it as a P3 project. In the event that the proponents do not believe that it cannot be procured as a P3 project the onus is on them to make a bona fide convincing case to that effect, otherwise the project will not receive federal funding under the Building Canada Fund.
Such conditions attached to federal funding both under the Building Canada Fund and the New Building Canada Fund regarding the requirement for a P3 screen for a project worth more than $100 million and the use of P3 procurement for projects for which it is feasible and appropriate, is a particular form of conditional funding by the federal government. Moreover, it is a case of the federal government using its so-called ‘power of the purse’ to constrain, motivate and even mandate all public and private sector agencies, including its own agencies, to ensure they give due consideration to procurements through P3s.
4.3.2 Policies Related to P3 Procurements The federal government also has numerous policies related to various facets of P3 procurements. Generally those policies are embodied in a plethora of statutes, regulations, and policy circulars related to various processes, roles and responsibilities for the procurements, management and disposal of any infrastructure projects in which they are merely involved in limited contributory partnership or in a more full-some co- management partnerships. The core statute from which other policy documents directly related to P3s flow is the Canada Strategic Infrastructure Fund Act (Canada 2002), which authorizes the creation of P3s as follows: “The Fund shall, where appropriate, promote the use of partnerships between public and private sector bodies.” The statute also stipulates that its object “…is to provide for the payment of contributions to eligible recipients for the carrying out of large-scale strategic infrastructure projects that contribute to economic growth or quality of life in Canada and that advance Canada’s objectives with respect to infrastructure” (Canada 2002). The list of strategic infrastructure includes highway, rail and local transportation, water and sewer infrastructure and urban development and tourism infrastructure, or any other infrastructure prescribed by regulation. The eligible recipients are (a) provincial governments, or any municipal or regional governments created by provincial legislation; (b) any public sector body that is established through provincial legislation or regulation or is wholly owned by a province; (c) any private sector body that is either in
10 partnership with a province a one of the aforementioned governments or acting on its own that the federal minister deems capable of undertaking a public project in Canada. That statute has been supplemented by other statutes, regulations and policies related to specific funding programs, especially the ones profiled above, that have been promulgated over time. It has also been supplemented by a wide range of policy various statutes, regulations and policies related to, among other things, each of the following: (a) financial management in procuring, managing or disposing of any assets (e.g., Financial Administration Act); policies and regulations related to transparency and accountability (e.g., Federal Accountability Act); and policies and regulations related to Access to information and privacy protection (e.g., Access to Information Act, Privacy Act).
This overview of the federal government’s organizational, financial and policy frameworks for P3s reveals that they have been developed substantially during the past fifteen years. The most significant components of the federal frameworks for P3s in the context of multi-level governance context are the funding programs which provide large amounts of funding for many infrastructure projects for which its own agencies as well as other governments, public agencies and private sector entities are proponents, including those for which P3 procurement model is used. Some of that money, of course, is transferred to provincially based committees to distribute according to various guidelines. In addition to the amount of funding that the federal government provides through such programs, the other significant aspect of its funding are the conditions that it attaches. This is particularly true of in the case of projects worth at least $100 million.
5. PROVINCIAL P3 FRAMEWORKS: A COMPARATIVE OVERVIEW
The objective in this section is to provide an overview of the following three facets of the provincial frameworks related to P3s: (a) the organizational mechanism for P3s; (b) the financial frameworks related to P3s; and (c) the policy frameworks related to P3s.
5.1 Provincial Organizational Mechanisms for P3s During the past fifteen years the number and types of departments or agencies authorized to deal with various facets of infrastructure P3 projects has varied across the provinces. Generally, however, the provinces have relied primarily on three types of organizational mechanisms in dealing with P3s, namely line departments, special agencies within line departments, and specialized stand-alone agencies incorporated as Crown corporations. Directly or indirectly, these three types of organizational mechanisms have been responsible for one or more categories of infrastructure (e.g., transportation, water and sewage treatment facilities, health facilities, educational facilities, etc.). Moreover, as explained in more detail below, in several provinces the roles and responsibilities for P3s of these different types of organizational mechanisms have been overlapping, rather than completely separated or mutually exclusive, because more than one of them tends to be involved in the various decision-making processes related to P3s.
11 During the past fifteen years five of the ten provinces have relied exclusively on line departments either individually or jointly in considering or in undertaking any P3s (i.e., Alberta, Manitoba, Nova Scotia, Newfoundland and Prince Edward Island). Among these particular provinces, Alberta has been the most active in utilizing the P3 procurement model, and it is the only one that has developed set of written guidelines that must be followed for P3 projects (Alberta 2011).
Unlike those five provinces, the other five provinces established special agencies to deal with P3 and other forms of partnerships. Moreover, whereas four of these provinces established stand-alone special agencies, one established a special operational unit within a line department. The special operational unit within a line department is the Partnerships New Brunswick branch within the Department of Transportation and Infrastructure (New Brunswick 2015). The stand-alone agencies in the other four provinces have all been incorporated as provincial Crown corporations. The four provinces with such agencies are Ontario, British Columbia, Quebec and Saskatchewan.
• Ontario established Ontario Superbuilds in 1999 specifically for the purpose of dealing with partnerships (Ontario 1999). The provincial government eliminated Superbuilds in 2003 and replaced it with the Ontario Infrastructure Projects Corporation (OIPC) in 2005. The OIPC was initially merged with the Ontario Strategic Infrastructure Financing Authority (OSIFA) in 2006 (Ontario 2006), and then with both the Ontario Realty Corporation and the Stadium Corporation of Ontario in 2011 to become the Ontario Infrastructure and Lands Corporation (OILC). • British Columbia established Partnerships BC in 2002, which continues to operate today, to deal with all types of partnerships, including P3s (British Columbia 2015). • Quebec established the Agence des Partenariats Public-Privé du Québec (APPPQ) in 2004, but eventually disbanded it in 2009 (Quebec 2004). This agency was replaced with Infrastructure Québec between 2009 and 2013 (Quebec 2009). In 2013 Quebec created the Société Québécoise des Infrastructures by merging Infrastructure Québec and the Société immobilière du Québec (SIQ)(Quebec 2013). • Saskatchewan established SaskBuilds in 2012, which continues to operate today (Saskatchewan 2013a and 2015a).
The list above reveals that at various points in time during the past fifteen years all four of these provinces have created special stand-alone agencies, which have been incorporated as Crown corporations, to take the lead role in dealing with P3 infrastructure projects. These provinces are using the same model as the federal government which, to reiterate, in 2007 also created a special stand-alone agency incorporated as a Crown corporation, namely PPP Canada.
There are some interesting and important similarities and differences in the mandates and functions of the various provincial agencies listed above, regardless of whether they are stand-alone agencies incorporated as Crown corporations or special units within line departments. The key similarities and differences between them are based on the precise
12 numbers and types of function they perform. For analytical purposes it is useful to distinguish between them with respect to which of the following four/five sets of functions they perform. It should be noted at the outset that these functions tend to be overlapping, rather than mutually exclusive, and that whereas some agencies perform only some of these functions, other agencies perform all these functions.
(a) Strategic Planning Function A significant commonality among the organizational mechanisms is the their general strategic planning function. This refers to the assessment of infrastructure needs and developing plans on how to meet those needs most efficiently and effectively. Most, if not all the organizational mechanisms performed this particular function. To varying extents all of them were mandated to provide a lead role in assessing the infrastructure needs in their respective provinces and to provide either coherent and comprehensive plans or at least some advice and recommendations on the prioritization of those needs and the means by which to meet them. A notable example in this respect is SaskBuilds, which was mandated “to establish a central process to advise upon, determine, plan, integrate, co-ordinate and prioritize the infrastructure needs of the Provincial Government...[and to develop] annual and long-term capital development plans for infrastructure projects (Saskatchewan 2013a, 5).
(b) Partnerships Screening Function This function entails determining whether a particular infrastructure project should be undertaken as a P3. All of the aforementioned stand-alone agencies and special agencies within line departments perform this particular function either very formally with a specialized screening tool with detailed and clear criteria, or less formally based on some general criteria. After all they are the ones who advise governments on the feasibility and merits of undertaking a particular infrastructure project as a P3. With one possible exception, none of the provinces have developed their own P3 screens comparable to the one used by PPP Canada. The notable exception is Quebec’s successive agencies dedicated to infrastructure partnerships, which developed a P3 screen and used it for various infrastructure projects in that province. This included projects in Quebec that would have been subjected to the federal government’s P3 screen, which was developed and applied by PPP Canada, were it not for the special bilateral Canada-Quebec infrastructure framework agreement that exempted such projects from that particular screen (Canada, 2008c). In other provinces it may be more accurate to say line ministries and special agencies have created P3 pre-procurement assessment systems, rather than P3 screens per se. A notable example of this is Partnerships BC, which developed and uses what might be termed a partnership viability assessment tool rather than a screening tool per se. The reason for this is that Partnerships BC has only an advisory or consultative role in determining the feasibility and viability of a P3 project, rather than a determinative role in whether any projects proposed by any of its clients, including provincial ministries, meet or do not meet the criteria to be deemed a P3, to be undertaken as a P3, and to be funded as a P3.
13 (c) Partnerships Project Procurement Management Function This function entails the management of the procurement of P3 projects. Among other things, it involves ensuring the requisite coordination in performing various project planning, development, and assessment or evaluation tasks. All the aforementioned agencies perform this general function, albeit to varying extents. For example Partnerships BC performs a multiplicity of functions at three stages in the early life cycle of a P3, which it labels (a) the business planning support stage, (b) the procurement process stage, and (c) the post-contract close stage (British Columbia 2014). Partnerships New Brunswick, which was established in 2010, lists the various services it provides on a fee for service basis as follows:
“The services of Partnerships New Brunswick cover the full range of assessing, procuring and implementing P3 projects including screening potential projects, conducting value-for-money assessments, advising on procurement processes, assisting with the development of RFQs and RFPs, advising on the preparation of project scope and requirements, assisting with the evaluation (including the development of evaluation criteria) of qualification and proposal submissions, assisting with project implementation and operation”(New Brunswick 2015).
The major difference between them tends to be with respect to the categories and/or number of infrastructure projects for which they are mandated to perform this particular function at any particular point in time. For example, during the first three year of its existence, SaskBuilds has been mandated by the provincial government to work on only four distinct P3 projects: the construction of a transportation corridor; the construction of a long-term care facility; the construction of a dual facility project that includes a hospital and a correctional facility on the same site; and the construction of nine elementary schools project.
(d) Partnerships Projects Advisory or Consulting Function This function entails providing advisory or consulting services to various governmental and non-governmental entities related to any contemplated, proposed and actual P3 projects, usually on a fee for service basis. This function is performed, albeit to varying degrees, by all the aforementioned agencies. The clients they are mandated or authorized to provide such services are profiled either in statutes, regulations or ministerial orders. Generally this includes provincial departments and agencies, various types of local and regional authorities (e.g., municipalities, health boards, school boards). However, some of them are also mandated to provide such services to First Nations governments and communities (e.g., SIQ, Partnerships New Brunswick). Several provincial agencies provide their services on a fee for-service-basis intended to help them cover their costs. A notable example of this is Ontario’s fee for service approach, which between 2005 and 2014 generated approximately $450 million. Despite the fact that Infrastructure Ontario used just over half of that amount to cover transaction costs such as external advice, project management fees, and legal fees, it still left approximately $200 million in the agency’s coffers (Ontario 2014b, 194).
14 (e) Project Funding or Lending Function Some of these special agencies also perform a project funding or lending function. The notable example of an agency that performs a project funding function is SaskBuilds which is mandated to utilize $150 million for contributing to infrastructure projects, including those procured through P3s (Saskatchewan 2014a, 6). The notable example of an agency that performs a lending function is Ontario Infrastructure, which administers the Infrastructure Ontario Loan Program, designed to provide loans to municipalities and eligible public sector and not-for profit organizations (Ontario 2014c, 5).
5.2 Provincial Financial Frameworks for P3s
Provincial financial frameworks for P3s consist of two basic components. The funding programs from which P3s can be funded; the authority for funding P3s; and the type of agencies and projects that are eligible for P3 funding.
5.2.1 Funding Programs for P3 Infrastructure Projects Every province has funding programs for infrastructure project. Such funding programs can be used to fund the procurement of infrastructure projects either via traditional or alternative funding models. The bulk of the funds for such programs are derived either from provincial coffers, federal coffers or some combination of the two. The funds from federal coffers come through a combination of grants, revenue-sharing arrangements or cost-sharing arrangements. The amount of funding that is derived from the federal coffers is determined through negotiations between federal and provincial officials using various logics and formulas. The amount of funding derived from provincial coffers is based on decisions made through their respective annual budget-preparation exercises.
5.2.2 Funding Decisions The decisions regarding the amount of funds that will be committed to various projects are made either by officials in one or more ministries or special agencies responsible either directly or indirectly for various categories of infrastructure, or in some cases by intra-governmental or intergovernmental funding committees.
One of the notable cases in which some funding decisions for infrastructure projects are made by a special agency is found in Saskatchewan. SaskBuilds, the Crown corporation, which has the authority to contribute some money from the SaskBuilds Fund to any prioritized large scale infrastructure project using either the traditional or P3 procurement modalities. Not coincidentally, perhaps, Saskatchewan is the only province that has a special dedicated fund for procurement of infrastructure projects deemed to be a priority by the provincial government. The $150 million that have been allocated for a five-year period is to be used primarily for contributing some funds to “… large scale (over $100 million) infrastructure projects” regardless of the source(s) of other funding for such projects —whether it is from the private sector or other levels of government (e.g., P Canada). Municipalities would not be excluded from participating with SaskBuilds and/or P3 Canada on large scale projects” (Saskatchewan 2015b). This is in contrast to project funding in other provinces that do not have a dedicated fund administered by a stand-alone Crown corporation.
15 Some notable intergovernmental funding committees are those involving provincial government officials and representatives of the major municipal associations in the province, which are mandated to establish infrastructure priorities and the amount of funding that should be devoted to each of the prioritized projects. Such joint provincial- municipal funding committees limit federal and to some extent even provincial responsibility for any funding decisions. The result is a shared responsibility among the individuals on those committees and the governments or agencies they represent.
All provinces have criteria related not only to which public or private organizations are eligible to apply for funding, but also regarding the types of projects for which they may apply. Moreover all provinces have their own regulations, protocols and guidelines related to the project management and financial management conditions that must be met to qualify for funding. As well, in cases where the federal government or any of its agencies contribute funds for infrastructure projects then some of their own regulations, protocols and guidelines related to project and financial management. The result of the contributions from the various orders of government and public agencies, as well as the roles and responsibilities of various intra-governmental and inter-governmental committees in the allocations of funds, attests to the ‘entanglements’ that occur as a result of multi-level governance within the context of Canadian federalism in funding infrastructure projects through any means, including P3s. The question is the extent to which it involves what in the Canadian federalism literature has been described as ‘constructive entanglement’ (Romanow 1998; Marchildon 1999).
5.3 Provincial Policy Frameworks
Most, if not all, provincial governments have policy frameworks that directly or indirectly impinge on P3 infrastructure projects. The key components of those policy frameworks are contained in various types of policy documents (e.g., statutes, orders in council, regulations, policy or program guidelines, toolkits and discussion papers). Whereas some of those policy documents are devoted exclusively to procurement using P3 models, others are broader in scope and are devoted to infrastructure procurement through any means, including public-private partnership arrangements.
The following overview of the policy documents reveals patterns of similarities and differences in the scope and robustness of the provincial policy frameworks for infrastructure P3s. The policy frameworks are diverse, rather than uniform, both in their scope and robustness. Not all have the same types or number of policy documents with the same level of detail. The scope and robustness of the provincial policy frameworks for P3 infrastructure projects are somewhat, though not perfectly, correlated both to the population size of the provinces and to the number of infrastructure P3 projects that are undertaken therein involving either the provincial governments, First Nations governments or any local and regional public authorities. Whereas large provinces such as Ontario and Quebec have relatively comprehensive and robust policy frameworks, the policy frameworks of most of the smaller provinces tend to be less comprehensive and robust, especially in terms of policy documents devoted explicitly to P3s.
16 The central objective in this section is to provide a brief overview of the following aspects of those policy documents: (a) their general purposes; (b) some of their specific purposes; and (c) their relevance or significance for governance, management and funding P3s in the context of multi-level governance in Canada.
5.3.1 General Purposes of Policy Documents
The four general purposes of the provincial policy documents are: (a) To create the organizational mechanism needed to deal either exclusively or partly with infrastructure P3s and the functions that they must perform (e.g., Partnerships BC, SaskBuilds, Ontario Infrastructure, SQI, and Partnerships New Brunswick); (b) To create special funds for P3s and to specify who manages those funds, the purposes for which they can be used, by whom they can be accessed, and how they can be accessed (e.g., SaskBuilds Fund, and other funds created pursuant to infrastructure funding which can be dedicated to infrastructure P3s); (c) To provide the regulatory and policy frameworks related to various aspects of the creation, management and administration of P3s; and (d) To provide various public sector partners (e.g., provincial, municipal, and regional authorities) as well as private sector partners with guidelines and toolkits to help them deal with various aspects of their involvement in P3 projects.
The policy documents that created the organizational and financial frameworks of relevance for P3s have been discussed in the previous sections of this paper. Therefore, the focus in the remainder of this section is limited to profiling policy documents that provide regulatory frameworks, policy frameworks, guidelines or toolkits for various agencies at the provincial, regional and local levels.
5.3.2 Special Functions of Policy Documents
Although all provinces have some statutory and non-statutory policy documents related to P3s, not all of them have policy documents dedicated specifically to P3s. Nevertheless, regardless of whether they have policy documents dedicated exclusively to P3s or whether P3s fall within the aegis of policy documents that are broader in scope, invariably all policy documents serve one or more special functions. Some of the most significant of those functions are: partnership authorization, assignment of roles and responsibilities, tendering and investment, financial management, and information management. 5.3.2.1 Specific Functions of Statutory Policy Documents
(a) Partnerships Authorization Function All provinces have one or more policy documents that provide what might be termed a ‘partnerships authorization’ function. These policy documents provide the authorization needed for various governmental entities to enter into partnerships. Whereas some statutes provide authorization to enter into partnerships in any sectors for any purpose, others are limited to partnerships in only one sector. Examples of the latter are a statute enacted by the Quebec authorizing partnerships in relation to transportation
17 infrastructure (Quebec 2000), and a statute enacted by British Columbia authorizing P3s for infrastructure and services in the health sector (British Columbia 2003).
(b) Assignment of Roles and Responsibilities The provincial policy frameworks also consist of statutory documents containing provisions that, either explicitly or implicitly, assign roles and responsibilities for various aspects of any P3 projects to elected and appointed officials. Whereas the assignment of roles and responsibilities often tends very general, in some cases it can be very specific depending on the precise nature of the infrastructure project to which it applies. An example of a statute that deals primarily with project management is British Columbia’s Transportation Investment Act. Part 2 of that statute, which is explicitly devoted to any P3s establishing concessions (e.g., toll booths and tolls, service centres, etc.) along a highway, outlines the powers and obligations of the Minister for, among other things, entering into agreements for concessions, dealing with concessionaires, and termination of concession agreements.
(c) Regulating Project Tendering and Procurement Processes The provincial policy frameworks also include statutes general or generic statutes, designed to regulate some aspects of infrastructure project procurement and financial management matters, which although they do not mention P3s explicitly, still apply to P3s. Two examples of such statutes are Newfoundland and Labrador’s Public Tenders Act (Newfoundland and Labrador 1990) and British Columbia’s Transportation Investment Act (British Columbia 2008).
(d) Regulating Financial Management There are also some general statutes designed to regulate financial management to the procurement, use and disposal of all assets, including those procured through P3 processes. One example is British Columbia’s Financial Administration Act, which explicitly authorizes the Treasury Board to authorize a minister responsible for a public- private partnership project to make a payment from the consolidated revenue fund for fees, commissions or expenses relating to the project (British Columbia 1996).
(e) Regulating Transparency, Accountability, Disclosure of Information and Privacy Provincial policy frameworks also consist of statutes designed to regulate transparency, accountability, freedom of information and privacy. Whereas some of these statutes apply exclusively to P3s, as is the case with Manitoba’s Public-Private Partnerships Transparency and Accountability Act (Manitoba 2012), and British Columbia’s Procurement Related Disclosure for Public Private Partnerships (British Columbia 2010); others statutes apply to P3 as well as other forms of procurement as is the case with Nova Scotia’s Freedom of Information and Protection of Privacy Act, which specifies that information can be accessed relating to P3s (Nova Scotia 1993).
18 5.3.2.2 Special Functions of Non-Statutory Policy Documents
(a) Regulatory and Quasi-regulatory Functions In addition to the statutory policy documents discussed above, provincial governments have also developed many non-statutory policy documents devoted to one or more facets of P3s. Whereas some of those non-statutory documents are intended to serve as regulatory or quasi-regulatory policy guidelines that must be adhered to by those involved with P3s, others are simply intended to provide some guidance or information and ‘how-to’ toolkits to help members of the public and private sectors involved with P3s or are considering becoming involved with P3s. Furthermore, whereas some of these non-statutory documents are relatively broad in scope in that they apply to many aspects of P3s, others are relatively narrow in scope and apply to very few aspects of P3s.
Four examples of non-statutory documents that are relatively broad in scope are: British Columbia’s Capital Asset Management Framework Guidelines (British Columbia 2002); Quebec’s Public Private Partnerships Framework Policy (Quebec 2004); Alberta’s Public Private Partnerships Framework and Guideline (Alberta 2011); and Saskatchewan’s Public-Private Partnership Project Assessment and Procurement Guideline (Saskatchewan 2014b). These four documents are designed to provide detailed information on many aspects of P3s including project selection, procurement processes, contract management, financial management, and accountabilities.
Examples of non-statutory documents that are narrower in scope are what might be termed provincial ‘manuals for P3 funding’ that contain regulations or guidelines for accessing funds for P3s from a particular funding program. A notable example of such a document is Ontario’s manual for its Community Infrastructure Fund (Ontario 2014a), which has been developed within the scope of the federal government’s Small Communities Fund (SCF). Not surprisingly, therefore, such provincial P3 funding manuals supplement and must be consonant with federal P3 funding program manuals.
(b) Orientation and Educational Functions Several provincial governments had also developed special P3 toolkits for officials in their regional and local governments and authorities. Such toolkits serve an orientation or educational function insofar as they provide such officials with an understanding of P3s and some general policy and procedural guidelines to follow both in considering and in undertaking P3 projects. Examples of such toolkits include the following: Nova Scotia’s Strategic Public Private Partnering: A Guide for Nova Scotia Municipalities (Nova Scotia, no date); New Brunswick’s Protocol on Public-Private Partnership (New Brunswick 1999); British Columbia’s Public Private Partnerships: A Guide for Local Government (British Columbia 1999); and Ontario’s Building Together: Guide for Municipal Asset Management Plans (Ontario 2012). Another such P3 toolkit for local governments is titled Public-Private Partnerships: A Guide for Municipalities (CCPPP 2011). This toolkit was produced by the Canadian Council on Public Private Partnerships (CCPPP) in partnerships with PPP Canada, and with the assistance of the Federation of Canadian Municipalities (FCM) and some large municipalities.
(c) Policy and Program Development Function
19 Lastly, several provinces have also produced policy documents that perform a policy and program development function. These are discussion papers related to various aspects of P3s, which are designed to foster thinking and discussion related to the development of policies and programs. A recent example of such a paper is British Columbia’s Methodology for Quantitative Procurement Options Analysis: Discussion Paper (British Columbia 2014).
5.3.3 Significance of Provincial Policy Documents for P3 System(s)
However, not all provinces have opted for infrastructure P3s with the same degree of interest or vigour over time. The extent to which they have pursued P3s varies depending on precisely what type of infrastructure is being considered and the predisposition of governments that are in power at any given point in time.
In summary, all provinces have policy frameworks that permit and facilitate the creation of infrastructure P3s, and which serve various general and specific functions related to P3s. Most of the provisions in various policy documents devoted either exclusively or partly to infrastructure P3s are designed to create various components of what might be termed the P3 governance, regulatory and funding regimes. There are various patterns of similarities and differences across the provinces in the types, numbers and functions of the various policy documents. Regardless of the types, number and functions of the various policy documents they provide the bases for the operation of the P3 system(s) in each of the provinces.
6. MUNICIPAL P3 FRAMEWORKS
In the past few years some of the largest cities have followed the lead of the federal and provincial governments in developing some, though by no means all, components of the frameworks related to infrastructure P3s.
6.1 Organizational Frameworks
Almost all municipalities generally rely on their public works departments to deal with infrastructure projects, regardless of whether they are procured through traditional models or P3 models. Very few, and possibly as few as one, has established a special agency for P3s. The one notable exception has been the City of Ottawa, which established such an office in the mid-2000s that continues to exist today to facilitate the procurement of some P3 projects. Ottawa’s office has focused exclusively on facilitating the procurement of city’s own P3s projects or the City’s participation in any other P3 projects, and does not engage in any consulting work outside the aegis of City Hall (Ottawa 2015).
6.2 Municipal Financial Frameworks
Like their federal and provincial counterparts municipalities devote funds to P3 projects. Unlike the federal government and the Saskatchewan provincial government, however, no municipal government has established a special fund for P3s. Rather than having a
20 fund dedicated exclusively to P3s per se, municipalities tend to fund P3s either from their general revenue funds or from special infrastructure reserve funds dedicated specifically to particular infrastructure projects, and any special funds for P3s established by the provincial and federal governments.
6.3 Municipal Policy Frameworks
The major similarity between the P3 frameworks of few larger municipal governments and those of the federal government and some provincial governments is the existence of policy frameworks for P3s. A few of the largest cities in some of the provinces have adopted formal policies and guidelines that have been reviewed and approved by the municipal council, rather than relying just on administrative policy or procedural circulars as guides in reviewing, approving, monitoring, and evaluating P3 projects. Notable examples of these types of municipal policy documents devoted specifically to P3s include those produced by three cities in the province of Alberta (Calgary 2008; Edmonton 2010; and St. Albert 2012), and one city in the province of Ontario (Ottawa 2013).
The purpose of those municipal P3 policies is essentially the same as the one articulated in the City of Edmonton’s P3 policy, which states that its purpose is to: “Guide the City’s approach to evaluating and pursuing potential P3s. The Policy provides process certainty and clarity for all stakeholders throughout a P3’s life cycle by ensuring a consistent framework for selection, evaluation, approval, delivery and monitoring of P3s” (Edmonton 2012). Generally, those policies contain principles and provisions regarding the importance of maximizing value for money and calculating risk, as well as particular tasks such as the screening, assessment, and procurement processes for P3 projects.
These municipalities have produced such P3 policy frameworks and have opted for relying on the P3 procurement model for several reasons. One reason is that they are being encouraged, implored and even mandated to consider the benefits of P3s where appropriate (Murphy 2007; Leong 2012). Another, and even more significant reason, is that they have become increasingly aware of the fact that federal and provincial policies related to infrastructure funding require municipalities to consider P3s. The City of Calgary’s policy produced in 2008, for example, noted that: “With such large capital needs and funding gaps, there is a need to investigate all sources of funding for infrastructure and services. P3s should be considered one option for delivering infrastructure and services. In some cases, access to grants from the other orders of government (such as the Federal Government’s Building Canada Fund) may be contingent on the project considering a P3 as a method of delivery” (Calgary 2008, 2). The policy reiterates this as follows: “The new federal infrastructure funding program Building Canada will also require the consideration of a P3 delivery model for projects that include municipal funding partners where the federal contribution is at least $50 million“ (Calgary 2008, 19).
21
22 7. OVERVIEW OF KEY FEATURES OF CANADA’S P3 SYSTEM(S)
Whereas the objective in the preceding sections of this paper has been to provide a comparative overview of the organizational, financial and policy frameworks established by the federal, provincial and municipal governments during the past two decades, which collectively constitute what might be termed Canada’s P3 system(s), the objective in this section is to highlight some of the key features of the P3 system(s) in the context of multi-level governance within the Canadian federal system.
The overview of the federal, provincial and municipal frameworks (i.e., organizational, financial and policy frameworks) provided in the previous sections of this paper reveal several important features of the P3 system(s) in the context of multilevel governance within the Canadian federal system.
7.1 Complex System(s)
First, it reveals that collectively they constitute a complex governance, management and funding system consisting of numerous organizational mechanisms, funding programs and policies. The complexity is created by several interrelated factors: the first is the multiplicity of governments and public authorities that exist within the Canadian federal system at the national and sub-national levels; the second is the exclusive or shared responsibilities that they have for various types of infrastructure; and the third is the existence of the multiplicity of organizational, financial and policy frameworks of the governments, public authorities and public agencies that exist at the national and sub- national levels. Those particular features of this complex system also render it both polycentric and polymorphous, rather than unicentric or uniform. Furthermore, the dynamic interactions between the various elements of the infrastructure P3 system(s) can render the creation, operation, evaluation and termination of infrastructure P3s highly complex.
7.2 Vertically and Horizontally Linked/Integrated System(s)
Second, the overview also reveals that the P3 system is somewhat linked or integrated both vertically and horizontally. There are some linkages in the interface between the various federal, provincial and municipal organizational, financial and policy frameworks that constitute the P3 system. In other words, generally those frameworks tend to exist and operate in relation to the others, rather than separately or independently. However, the extent, strength of efficacy of the linkages or integration is highly variable across each of the three major sets of frameworks examined in this paper and, therefore across the P3 system as a whole.
23 7.3 Provincially and Municipally Differentiated System(s)
Third, the comparative overview of the various provincial and municipal frameworks that constitute the provincial P3 system in each province revealed that they tend to be differentiated, rather than uniform. Such differentiation was evident in the case of organizational, financial, and policy frameworks. Simply put, those frameworks are not identical in all the provinces. The same is also true of the fledgling and nominal policy frameworks that have been developed by a handful of the larger cities. Indeed, the overview revealed substantial differences in the scope and robustness of those three sets of frameworks of various provinces and municipalities. Despite such differences, there are also some notable similarities in those frameworks particularly between the federal government and some of the provincial governments that have relatively institutionalized and robust P3 systems. The overview also revealed, albeit largely implicitly, that the P3 system(s) and the similarities and differences in the organizational, financial and policy frameworks of the various orders of government are products of what is generally referred to as intergovernmental or inter-organizational policy or program diffusion, imitation, supplementation, coordination, and harmonization.
7.4 Asymmetrical System(s)
Finally, the overview also revealed that at the federal-provincial level the P3 system has been asymmetrical in at least two ways. First, not all provinces are equally predisposed to opting for P3 procurement model that may be required to qualify for federal funding programs. Second, not all provinces have had precisely the same arrangements vi-a-vis the federal government in the terms and conditions related to the application of the federal P3 screen and the reporting requirements for using or not using the P3 procurement model for any project worth at least $100 million pursuant to the bilateral federal-provincial infrastructure agreements that has existed both under the old and the new Building Canada Fund. The asymmetry stems from the fact that, to reiterate, Quebec has been granted and has utilized a special status in relation to the P3 screening process.
24 8. DIRECTIONS & FOCUS FOR FURTHER RESEARCH
Given the increasing reliance on P3 models for procuring infrastructure in the context of multilevel governance (MLG) within federal and non-federal systems, further research is required in some potentially interesting and important areas, such as the following effects:
Effects of Multilevel Governance on P3 Frameworks and System(s) • Effects of MLG on Emergence/Evolution Organizational Frameworks for P3s • Effects of MLG on Emergence/Evolution Financial Frameworks for P3s • Effects of MLG on Emergence/Evolution of Policy/Program Frameworks for P3s
Effects of Multilevel Governance on Policy and Program • Effects of MLG on Policy/Program Diffusion & Imitation • Effects of MLG on Policy/Program Supplementation • Effects of MLG on Policy/Program Coordination • Effects of MLG on Policy/Program Harmonization
Effects of Multilevel Governance on P3 Procurement • Effects of MLG on Project Priorities • Effects of MLG on Project Procurement Modes • Effects of MLG on Governance and Management Modes • Effects of MLG on Project Transaction Costs
Effects of P3s on Governance/Management in Multilevel Governance Context • Effects of P3s on Transparency in MLG Context • Effects of P3s on Accountability in MLG Context • Effects of P3s on Responsibility in MLG Context • Effects of P3s on Confidentiality in MLG Context
Effects of P3 Procurement on Relations in Multilevel Governance Context • Effects of P3s on Intergovernmental Relations • Effects of P3s on Public-Private Sector Relations • Effects of P3s on State-Society Relations
25 9. CONCLUSIONS
During the past two decades the federal, provincial and municipal governments in Canada have been working severally and jointly in developing and institutionalizing what might be termed the P3 system(s). They have done so in the face of ongoing debates on whether P3s should be used for procuring various types of infrastructure, or anything else. While those debates have slowed down the use of the P3 procurements models, they have not stopped it; in fact the use P3s has increased steadily over time, particularly for large transportation projects and municipal, education and health facilities in many provinces.
The extent of the institutionalization of the P3 system(s) has been influenced by many political and economic factors that led to innovation by some governments who were ‘early adaptors’ of P3 procurements and emulation or imitation by others. The institutionalization of the P3 system(s) have also been influenced by the incentives (positive and negative) provided by successive federal governments and many provincial governments for using P3 procurement models. Such incentives have been directed not only at each other and at their respective ministries and agencies, but also at municipal governments and various regional and local authorities.
The P3 system(s) in the context of multilevel governance within the Canadian federal system is a relatively recent phenomenon that might be termed work in progress in its early stages. There is a modicum of shared, though by no means an equal, commitment, among the federal and provincial governments and to some extent also among the larger municipalities and some local and regional authorities, to continuous monitoring, learning and improvement of the P3 system(s). On a predictive note, it seems that the less problematical each project is managerially, financially and politically, the greater the likelihood that reliance on P3 models for infrastructure procurement will continue to increase. If reliance on P3 procurement models becomes even more prevalent in the future, more research is required on, among other things, its implications for context of multilevel governance within the Canadian federal system as well as other systems.
Finally, in reflecting on how well the P3 systems are working in the context of multilevel governance within the Canadian federal system it is fair to say that, notwithstanding some challenges and problems to date, they have been working relatively well (Canada 2013c) even when compared in a global context (Gill and Dimick. 2013). There is no denying that there are concerns and criticisms such as those expressed by the federal and provincial auditors regarding some aspects of financial management in those systems (Saskatchewan 2001; Canada. 2013a; Ontario. 2014c.), but invariably they tend to be directed primarily at the use of P3 models for infrastructure procurement, rather than the appropriateness or adequacy of the organizational, financial and policy frameworks that constitute the P3 systems at the national, provincial and municipal levels. This is not to suggest that there are no problems or criticisms of the P3 systems, but that they have not resulted in major set backs or crises. Nevertheless at this point in time in the evolution of those P3 systems it is useful to assess their appropriateness and adequacy. That is the central objective of the second part of this project.
26 References
Alberta. 2011. Alberta's Public Private Partnership Framework and Guideline. Treasury Board. http://www.infrastructure.alberta.ca/Alberta-P3-Framework-and-Guideline-with-appendices.pdf
British Columbia. 1996. Financial Administration Act. http://www.bclaws.ca/EPLibraries/bclaws_new/document/ID/freeside/00_96138_01#section2
British Columbia.1999. Public Private Partnership: A Guide for Local Government. Ministry of Municipal Affairs. http://www.cscd.gov.bc.ca/lgd/policy_research/library/public_private_partnerships.pdf
British Columbia. 2002. Capital Asset Management Framework. http://www.fin.gov.bc.ca/tbs/camf_guidelines.pdf
British Columbia. 2003. Health Sector Partnerships Agreement Act. http://www.bclaws.ca/EPLibraries/bclaws_new/document/ID/freeside/00_03093_01
British Columbia. 2008. Transportation Investment Act. http://www.bclaws.ca/EPLibraries/bclaws_new/document/ID/freeside/00_02065_01
British Columbia. 2009. Practice Guideline 1: Public Private Partnerships. Office of the Comptroller General. Ministry of Finance. http://www.fin.gov.bc.ca/OCG/fras/capitalization/Downloads/P3%20Practice%20Guidelines%20May%20 2009.pdf
British Columbia. 2010. Procurement Related Disclosure for Public Private Partnerships. Partnerships B.C. http://www.partnershipsbc.ca/files/documents/pbc-disclosure-guidance-19jan10-update_000.pdf
British Columbia. 2014a. Annual Report 2013/2014. Partnerships BC. http://www.partnershipsbc.ca/files- 4/documents/PBCAR201314.pdf
British Columbia. 2014b. Methodology for Quantitative Procurement Options Analysis: Discussion Paper. 2014. http://www.partnershipsbc.ca/files- 4/documents/Methodology%20for%20Quantitative%20Procurement%20Options%20Analysis%20(2014% 20update).pdf
British Columbia. 2015. Corporate Overview. Partnerships BC. http://www.partnershipsbc.ca/files- 4/documents/PBC-Corporate-Overview-2015.pdf
Calgary. 2008. Public Private Partnerships: Council Policy Framework. Department of Finance and Supply. http://www.pppcouncil.ca/pdf/calgary_p3policy_122008.pdf
Canada. 1985. Financial Administration Act (R.S.C., 1985, c. F-11) http://laws-lois.justice.gc.ca/eng/acts/f-11/
Canada. 2001. Public-Private Partnerships: A Canadian Guide. Infrastructure Canada, Service Industries Branch. Ottawa. June.
Canada. 2002. Canada Strategic Infrastructure Fund Act. Minister of Justice. http://lois- laws.justice.gc.ca/PDF/C-10.3.pdf
Canada. 2003. The Public Sector Comparator: A Canadian Best Practices Guide. Infrastructure Canada, Service Industries Branch Ottawa. May.
27 Canada. 2008a. Budget 2008: Budget Plan, Chapter 3: Investing in the Future. Department of Finance. Ottawa. February 26. http://www.budget.gc.ca/2008/plan/chap3c-eng.html
Canada. 2008b. Summary Amended Corporate Plan 2008-2012, Summary Amended Operating and Capital Budgets 2008. PPP Canada. http://www.p3canada.ca/~/media/english/corporate- plans/files/p3c_corporate_plan.pdf
Canada. 2008c. Canada-Quebec Infrastructure Agreement. Infrastructure Canada. http://www.infrastructure.gc.ca/alt-format/pdf/ifa-eci-qc-eng.pdf
Canada. 2013a. Auditor General Spring Report. PPP Canada Fund. Office of the Auditor General. http://www.oag-bvg.gc.ca/internet/English/parl_oag_201304_10_e_38195.html
Canada. 2013b. National First Nations Infrastructure Investment Plan (FNIIP)—2014-2015. Aboriginal Affairs and Northern Development Canada. http://www.aadnc-aandc.gc.ca/eng/1425477312133/1425477531299#sec2
Canada. 2013c. Public-Private Partnerships: A Tool In The Tool Box. House of Commons Standing Committee on Government Operations and Estimates. [41st Parliament, First Session]. http://www.parl.gc.ca/content/hoc/Committee/411/OGGO/Reports/RP6027931/oggorp10/oggorp10-e.pdf
Canada. 2014. National First Nations Infrastructure Investment Plan 2014-2015. Aboriginal Affairs and Northern Development. http://www.aadnc-aandc.gc.ca/eng/1425477312133/1425477531299
Canada. 2015a. Canada PPP—About Us. http://www.p3canada.ca/en/about-us/
Canada. 2015b. The New Building Canada Plan: The Largest and Longest Federal Infrastructure Plan in Canadian History. Infrastructure Canada. http://www.infrastructure.gc.ca/alt-format/pdf/NBCP-NPCC- 20150130-eng.pdf
Canada. 2015c. NIC - National Infrastructure Component: Building Canada Fund. Infrastructure Canada. http://www.infrastructure.gc.ca/plan/nic-vin-prog-eng.html
Canada. 2015d. New Building Canada Fund: Provincial-Territorial Infrastructure Component –National and Regional Projects. Infrastructure Canada. http://www.infrastructure.gc.ca/plan/nrp-pnr-prog-eng.php
Canada. 2015e. Support for First Nations infrastructure. Infrastructure Canada http://www.infrastructure.gc.ca/plan/fn-pn-eng.html
Canada. 2015f. New Building Canada Fund: National Infrastructure Component. Business Case Guide. Infrastructure Canada. http://www.infrastructure.mb.ca/wp-content/uploads/2014/11/nbcf-nic-guide-nfcc- vin-eng.pdf
Canada. 2015g. Building Canada Fund. Infrastructure Canada. http://www.infrastructure.gc.ca/prog/bcf- fcc-eng.html
Canada. 2015h. PPP Canada—Screening Advisory Services. http://www.p3canada.ca/en/screening-and-advisory-services/
Canada. 2015i. The Guide to the new Building Canada Fund P3 Screen-Suitability Assessment. http://www.p3canada.ca/~/media/english/resources- library/files/nbcf_p3%20screen_suitability_assessment_final_clean%20copy_new%20cover.pdf
28 Canada. 2015j. Procurement Plan—Knowledge Area. Public Works and Government Services Canada. Public Works and Government Services Canada. http://www.tpsgc-pwgsc.gc.ca/biens-property/sngp- npms/ti-it/conn-know/approv-procure-eng.html
Canadian Council for Public Private Partnerships (CCPPP). 2011. Public-Private Partnerships: A Guide for Municipalities. Canadian Council for Public Private Partnerships in Collaboration with PPP Canada. http://www.p3canada.ca/~/media/english/resources-library/files/p3%20guide%20for%20municipalities.pdf
Canadian Urban Transit Association (CUTA). 2014. New Building Canada Plan: The Next Decade of Federal Transit Investment. Issue Paper 44 E. Toronto: Canadian Urban Transit Association. http://www.cutaactu.ca/en/public-transit/publicationsandresearch/resources/Issue_Paper_44_E.pdf
Edmonton. 2010. City Policy. Public Private Partnerships (P3). Finance and Treasury Department. http://www.pppcouncil.ca/pdf/edmonton_p3policy_052010.pdf
Gill, Vijay and Sarah Dimick. 2013. Canada as a Global Leader: Delivering Value through Public- Private Partnerships at Home and Abroad. Conference Board of Canada. http://www.infrastructure.alberta.ca/documents/14-004_P3Leader_RPT_-_08_21_13.pdf
Hambros, S.G. 1999a. Public Private Partnerships for Highways: Experience, Structure, Financing, Applicability and Comparative Assessment: Objective Two, Final Report. Prepared for Council of Deputy Ministers Responsible for Transportation and Highway Safety. Ottawa.
Hambros, S.G. 1999b. Public Private Partnerships for Highways: Experience, Structure, Financing, Applicability and Comparative Assessment: Objective Three, Final Report. Prepared for Council of Deputy Ministers Responsible for Transportation and Highway Safety. Ottawa.
Hamel, Pierre J. 2007. Public Private Partnerships (P3s) and Municipalities: Beyond Principles, A Brief Overview of Practices. Institute Nationale de la Recherche Scientifique. Montreal. https://www.fcm.ca/Documents/reports/Public_Private_Partnerships_P3s_and_Municipalities_Beyond_Pri nciples_a_Brief_Overview_of_Practices_EN.pdf
Hasserlriis, Kaj. 2004. “Guess What’s on the Martin Agenda?” Organize. Canadian Union of Public Employees. Ottawa. May.
Horak Martin and Robert Young (eds). 2012. Sites of Governance: Multilevel Governance and Policy Making in Canada’s Big Cities. Montreal & Kingston: McGill Queen’s University Press.
Kitchen, Harry. 2006. State of Disrepair: How to Fix the Financing of Municipal Infrastructure in Canada. C.D. Howe Institute Commentary No. 241. Toronto: C.D. Howe Institute. December. http://www.cdhowe.org/pdf/commentary_241.pdf
Lazar, Harvey and Christian Leuprecht. 2007. “From Multilevel and Multi-Order Governance?” in Spheres of Governance: Comparative Studies of Cities in Multilevel Governance Systems, Harvey Lazar and Christian Leuprecht editors. Kingston: Institute of Intergovernmental Relations, pp. 1-21.
Leong, Melissa. 2012. Municipalities May Add Public-Private Partnerships to Infrastructure-Building Arsenal. Financial Post. November 22, 2012. http://business.financialpost.com/news/economy/municipalities-may-add-public-private-partnerships-to- infrastructure-building-arsenal
Loxley, John. 2010. Public Service, Private Profits: the Political Economy of Public Private Partnerships in Canada. Halifax: Fernwood Pub.
Manitoba. 2012. Public-Private Partnerships Transparency and Accountability Act. C-36. http://web2.gov.mb.ca/laws/statutes/2012/pdf/c03612.pdf
29 Marchildon, G.P. 1999. “Constructive entanglement: Intergovernmental collaboration in Canadian social policy.” In Collaborative Government: Is There a Canadian Way? S. Delacourt and D.G. Lenihan. Editors. Toronto: IPAC New Directions, no. 6, 72-80.
Murphy, Tim. 2007. The Next Wave: Municipal P3s – the Challenge of Building a Municipal Constituency. Renew Canada. January/February 2007. Accessed from: http://www.mcmillan.ca/Files/TMurphy_MunicipalP3s_0107.pdf
Newfoundland and Labrador. 1990. Public Tenders Act. http://www.assembly.nl.ca/legislation/sr/statutes/p45.htm
New Brunswick. 1999. Protocol on Public-Private Partnerships. Moncton. https://www.gnb.ca/0158/reports/protocol/protocol.htm
New Brunswick. 2015. Partnerships New Brunswick. Transportation and Infrastructure. http://www2.gnb.ca/content/gnb/en/departments/dti/partnerships.html
Nova Scotia. No date. Strategic Public Private Partnering: A Guide for Nova Scotia Municipalities [produced for Ministry of Municipal Affairs by Anderson Consulting]. http://novascotia.ca/dma/pdf/mun- strategic-public-private-partnering.pdf
Nova Scotia. 1993. Freedom of Information and Protection of Privacy Act. http://nslegislature.ca/legc/statutes/freedom%20of%20information%20and%20protection%20of%20privac y.pdf
OECD. 2010. Dedicated Public-Private Partnership Units: A Survey of Institutional and Governance Structure. Secretary General of the OECD. http://www.infrastructureaustralia.gov.au/policy- publications/publications/files/Dedicated_PPP_Units_OECD_2010.pdf
Ontario. 1999. O Reg 592/99. Superbuilds Corporation. https://www.canlii.org/en/on/laws/regu/o-reg-592- 99/latest/o-reg-592-99.html
Ontario. 2006. Ontario Infrastructure Projects Corporation Act. http://www.lois-en- ligne.gouv.on.ca/html/statutes/english/elaws_statutes_06o09i_ev004.htm
Ontario. 2007. Assessing Value for Money - A Guide to Infrastructure Ontario’s Methodology. Infrastructure Ontario. http://www.infrastructureontario.ca/WorkArea/DownloadAsset.aspx?id=2147488713
Ontario. 2012. Building Together: Guide for Municipal Asset Management Plans www.moi.gov.on.ca/pdf/en/Municipal%20Strategy_English_Web.pdf
Ontario. 2014a. Program Manual. Ontario Community Infrastructure Fund (OCIF). Formula-Based Component. Program Manual. Government of Ontario. http://www.moi.gov.on.ca/en/infrastructure/building_together_mis/program-manual-ocif-formula-based- component.pdf
Ontario. 2014b. Infrastructure Ontario- Alternative Financing and Procurement. Annual Report of the Office of the Auditor General of Ontario. C3 S3.05. http://www.auditor.on.ca/en/reports_en/en14/305en14.pdf
Ontario. 2014c. Infrastructure Ontario Annual Report, 2013/14. Infrastructure Ontario. http://www.infrastructureontario.ca/Templates/AboutUs.aspx?id=2147490549&langtype=1033
Osborne, Stephen P. 2000. Public-Private Partnerships: Theory and Practice in International Perspective. New York: Routledge.
30 Ottawa. 2013. Report 31. Public Private Partnerships Policy. Finance and Economic Development Committee. http://www.pppcouncil.ca/pdf/ottawa_p3_policy_04102013.pdf
Ottawa. 2015. Best Practices. http://ottawa.ca/en/business/doing-business-city/public-private-partnerships- p3s/best-practices
Quebec. 2000. An Act Respecting Transport Infrastructure Partnerships. http://www2.publicationsduquebec.gouv.qc.ca/dynamicSearch/telecharge.php?type=5&file=2000C49A.P DF
Quebec. 2004. An Act Respecting the Agence des Partenariats Public-Privé du Québec. C.A- 7.002. http://www2.publicationsduquebec.gouv.qc.ca/dynamicSearch/telecharge.php?type=2&file=//A_7_ 002/A7_002_A.htm
Quebec. 2004. Public Private Partnerships Framework Policy. Government of Quebec. http://collections.banq.qc.ca/ark:/52327/bs52107
Quebec. 2009. Bill 65, Chapter 53. An Act Respecting Infrastructure Quebec. C.53. http://www2.publicationsduquebec.gouv.qc.ca/dynamicSearch/telecharge.php?type=5&file=2009C53A.P DF
Quebec. 2013. Bill 38. An Act Respecting the Governance of Public Infrastructures, Establishing the Société Québécoise des Infrastructures and Amending Various Legislative Provisions. http://www2.publicationsduquebec.gouv.qc.ca/dynamicSearch/telecharge.php?type=1&file=3110.pdf
Romanow. Roy. 1998. “Reinforcing ‘The Ties that Bind,’” Policy Options 19, no. 4 (November 1998), pp. 6–8.
Saskatchewan. 2001. Managing Accountability Risks in Public Private Partnerships. Fall Report- 2. Saskatchewan Provincial Auditor. https://auditor.sk.ca/pub/publications/public_reports/2001/Volume_2/2001v2_04_PubPrivPartnerships.pdf
Saskatchewan. 2013a. SaskBuilds Annual Report for 2012-13. Regina. http://www.saskbuilds.ca/about%2Dus/AnnualReport.html
Saskatchewan. 2014a. SaskBuilds Annual Report for 2013-14. Regina. http://www.saskbuilds.ca/about- us/SaskBuilds%20Annual%20Report%202013-14.pdf
Saskatchewan. 2014b. Public-Private Partnership Project Assessment and Procurement Guideline. Saskbuilds. http://www.saskbuilds.ca/alternative- financing/SaskBuilds%20P3%20Project%20Assessment%20and%20Procurement%20Guideline%20- %20Final.pdf
Saskatchewan. 2015a. SaskBuilds—About Us. http://www.saskbuilds.ca/about%2Dus/
Saskatchewan. 2015b. SaskBuilds Fund Overview. SaskBuilds. http://www.saskbuilds.ca/saskbuilds-fund/
St. Albert. 2012. Public Private Partnerships. City Council Policy. http://www.pppcouncil.ca/pdf/st_albert_p3_policy_05282012.pdf
TD Economics. 2006. Creating the Winning Conditions for Public-Private Partnerships (P3s) in Canada. http://www.munkschool.utoronto.ca/imfg/uploads/20/public_private_partnerships_d._burleton.pdf
Vander Ploeg, Casey. 2006. New Tools for New Times: A Sourcebook for the Financing, Funding and Delivery of Urban Infrastructure. Canada West Foundation http://cwf.ca/pdf-docs/publications/New- Tools-for-New-Times-September-2006.pdf
31