STANDING COMMITTEE ON THE ECONOMY Hansard Verbatim Report No. 40 — April 10, 2019 Legislative Assembly of Saskatchewan Twenty-Eighth Legislature STANDING COMMITTEE ON THE ECONOMY Ms. Colleen Young, Chair Lloydminster Ms. Vicki Mowat, Deputy Chair Saskatoon Fairview Mr. David Buckingham Saskatoon Westview Mr. Terry Dennis Canora-Pelly Mr. Delbert Kirsch Batoche Mr. Warren Michelson Moose Jaw North Mr. Doug Steele Cypress Hills Published under the authority of The Hon. Mark Docherty, Speaker STANDING COMMITTEE ON THE ECONOMY 729 April 10, 2019 [The committee met at 17:59.] and prioritize major infrastructure investments and to drive innovation in infrastructure delivery. Through that mandate, The Chair: — Good evening, everyone, and welcome to the SaskBuilds has managed a portfolio of four public-private Standing Committee on the Economy. Tonight we have in as partnerships or P3 projects worth more than $3 billion that are committee members myself, Colleen Young, as Chair; delivering critical infrastructure for Saskatchewan people and committee members David Buckingham, Terry Dennis, Delbert communities: The Meadows long-term care centre in Swift Kirsch, Doug Steele. Sitting in for Warren Michelson is Everett Current; 18 joint-use schools in Regina, Saskatoon, Warman, and Hindley, and sitting in for Vicki Mowat is Ms. Sproule. Martensville; the recently opened Saskatchewan Hospital North Battleford; and the Regina bypass project, which is on track to General Revenue Fund open on time and on budget this fall and whose first phase has SaskBuilds Corporation been open for more than a year now and has already significantly Vote 86 improved traffic safety and reduced collisions along the Trans-Canada corridor east of Regina. Subvote (SB01) I know that members of the opposition don’t like to hear that, The Chair: — We will now begin our consideration of the Madam Chair, but it simply must be said that using the P3 model estimates for vote 86, SaskBuilds Corporation, subvote (SB01). allowed our government to save nearly $600 million overall Minister Wyant is here with his officials, and I want to ask all compared to the costs of the traditional builds: the Regina bypass, officials to state their names and their positions the first time they $380 million in savings; joint-use schools, $100 million; speak at the mike. Minister, please introduce your officials and Saskatchewan Hospital in North Battleford, $90 million; and The begin with any opening remarks you have. Meadows, $16 million. Hon. Mr. Wyant: — Well thank you very much, Madam Chair, P3s also support local businesses and local jobs. More than 250 and to the committee. Before I begin, I would like to introduce Saskatchewan-based companies have been involved in the four the SaskBuilds officials that are here with me today. To my left, P3 projects, 70 per cent of all businesses involved: on the Regina Kyle Toffan, president and chief executive officer of SaskBuilds. bypass, 106 Saskatchewan-based companies; in the joint-use Kyle joined SaskBuilds as its new CEO [chief executive officer] schools, 73 Saskatchewan-based companies; the Saskatchewan in December, and this will be his first role in estimates. If he Hospital North Battleford, 31 Saskatchewan-based companies; looks familiar, you may know that he’s had some experience in and with The Meadows, 54 Saskatchewan-based companies. the civil service before, including previous roles at SaskBuilds as Saskatchewan’s P3 projects have created more than 12,000 jobs well as roles within the ministries of Government Relations and during a time of low resource prices. Finance. Saskatchewan’s experience with these four projects proves that To my right is Teresa Florizone, vice-president of corporate P3s work. They allow government to invest in critical services and chief financial officer. Also with us today, infrastructure while saving money and transferring risk to the vice-president of Priority Saskatchewan, Reg Howard; chief private sector. Saskatchewan Hospital North Battleford, or procurement officer, Greg Lusk; director of corporate services, SHNB, has been a good example of how P3 risk transfer protects Alicyn Miller; executive director of strategy and engagement, government and taxpayers. While we would always prefer that Lisa Danyluk; and my chief of staff, Julie Leggott. I want to projects be completed on time, in the case of a P3 like SHNB, thank them all for being here today and for the important work government and taxpayers are protected against risk and that they do on a daily basis for the people of Saskatchewan. associated costs in the case of delays. Madam Chair, this is my second opportunity to serve as the The private sector partners on the project were not able to meet Minister Responsible for SaskBuilds and Priority Saskatchewan, the original service commencement date of June 1, 2018. In the and I’m happy to be back in this portfolio during what promises end, service commencement was achieved on September 6th of to be a very exciting time for our organization. As I said, this is 2018. Costs related to the delays are the responsibility of Access an exciting time for SaskBuilds as an organization. It is Prairies Partnership and not the government. Thanks to the undertaking new and important work on behalf of the unique protections of the P3 agreement, government saved government and indeed the people of Saskatchewan, and that is $3.9 million in forfeited service payments, plus 484,000 for reflected in this year’s budget. delay-related expenses. As the Minister of Finance said, the 2019-20 budget strikes the I would also note that, as indicated in the October 2018 Speech right balance for Saskatchewan. It focuses on carefully managing from the Throne, we will continue to use both P3s and traditional spending while making important investments in needed procurement models to support the infrastructure needs of our services, programs, and infrastructure for the people of province, by using the model that makes the most sense with each Saskatchewan. This budget also fulfills our government’s new project. commitment to return the province to a balanced budget. It is within that context that we’re here today to discuss the budget So, Madam Chair, that’s a quick overview of where we’re at with allocation for SaskBuilds and the important work that this budget our P3 portfolio. The P3 projects have been an important part of will enable our organization to do. our original mandate. And, as I’ve mentioned, that mandate also includes infrastructure planning. As part of that original mandate, SaskBuilds’s mandate has evolved since it was created to plan SaskBuilds developed a new integrated capital planning process 730 Economy Committee April 10, 2019 for government, a first for Saskatchewan. government have access to a simplified suite of modern procurement tools to achieve value, building Saskatchewan Integrated capital planning allows government to take a strategic supplier capacity through supplier development, building approach to identifying, prioritizing, and funding infrastructure best-value procurement training for public servants, and investments. SaskBuilds leads government’s annual integrated developing a vendor performance framework. capital planning process, working closely with ministries and Crowns to ensure that decision makers have the best information However, Priority Saskatchewan’s role has been limited to possible to meet Saskatchewan infrastructure needs now and into advice, guidance, and training, and while that gave Priority the future. The integrated capital planning team has developed an Saskatchewan room to accomplish a great deal, it didn’t let us go integrated capital planning manual to support ministries and all the way. So in a nutshell, we created a team to make agencies meet the objectives and requirements of the annual call procurement better, but we left procurement decentralized across for capital plans. government. That limited government’s ability to fully transform procurement, and that’s been a frustration for Saskatchewan This integrated capital planning process also plays a role in one suppliers at a time when changes in other provinces are posing of our newest infrastructure-related mandates, working with our challenges for them too. British Columbia last year released a partners in the Ministry of Government Relations to coordinate comprehensive procurement strategy designed to protect BC long-term federal infrastructure funding under the [British Columbia] suppliers. Alberta is becoming increasingly Canada-Saskatchewan Integrated Bilateral Agreement through protectionist in their procurement framework as well. the Investing in Canada infrastructure plan. So to address these important concerns and ensure government is The agreement was signed in October of 2018, securing able to fully and truly modernize public procurement, we $896 million in federal infrastructure funding over the course of announced in the October 2019 Throne Speech that the the next decade to improve community health and safety, government is changing the way it does business by moving to a economic growth and sustainability, environmental protection, single procurement service for nearly $2 billion worth of goods and the quality of life through investments in northern and rural and services which are procured every year. and remote communities, municipal and regional infrastructure, greenhouse gas mitigation, and cultural and recreational Creating a single procurement service will ensure that the facilities.