Evidence of meeting #56 for Transport, Infrastructure and Communities in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was infrastructure.
A recording is available from Parliament.
5:10 p.m.
Mayor, City of Gatineau
Absolutely.
It was an extremely significant step forward for cities.
5:10 p.m.
Conservative
5:10 p.m.
Mayor, City of Gatineau
We essentially dedicated 100% of the amount to water treatment facilities.
Does the $56 million come from Quebec City or Ottawa?
5:10 p.m.
Denis Tassé
Actually, $53 million comes from the Government of Quebec.
5:10 p.m.
Mayor, City of Gatineau
Given that we had costed out our needs well and projected them over the long term, we received a contribution from the Government of Quebec, which, I believe, may have been in partnership with the Building Canada Fund. It allowed us to do up to $100 million worth of work in our plants. In a few years, all our plants will be repaired.
That ability to plan into the future is priceless. With the Building Canada Fund, we used everything we were able to ask for.
5:10 p.m.
Conservative
Peter Braid Conservative Kitchener—Waterloo, ON
One of the other flexible tools that we built into the gas tax fund is the opportunity for municipalities to bank their gas tax funding or to borrow against it. Have you ever used either one of those mechanisms, and are they helpful to you?
5:10 p.m.
Mayor, City of Gatineau
I do not think we have done so, but that kind of tool could be very useful. We can invest in the water supply, sewers and asphalt. But when you start talking about a plant, the costs are huge. We are talking about $25 million for a single project. So it is a useful tool.
5:10 p.m.
Conservative
Peter Braid Conservative Kitchener—Waterloo, ON
I have one final question for you, Mr. McBride. You said in your presentation that Canada has become a leader in the world with respect to P3 expertise and procurement. How has that happened? Why has that happened? How do you back up that claim?
5:15 p.m.
Chief Executive Officer, PPP Canada Inc.
That's by the volume and the quality of the pipeline of projects, the number of jurisdictions that are involved, and the number of sectors. Why has it happened? That's for a variety of reasons. One is the creation of public sector expertise to do that, and leadership at the provincial level that has been then echoed at the federal level. There's also a commitment to open competition, an area that has brought international expertise and has helped to develop a strong Canadian industry as a result, and the uniqueness of capital markets.
What do I mean by that? We used to criticize Canadian banks for being conservative. They didn't lend long term against infrastructure projects, which created in Canada a unique project bond market, a unique capital market to support long-term infrastructure projects. Post-financial crisis, when European banks and others went down, the Canadian capital markets, through the regulatory strength that has happened here in Canada, survived and blossomed through that to continue to be able to provide cost-effective financing. People talk about the financing where this is less than 2% as the difference between the private sector financing and the public sector financing. It's less than 2%. It still can cost money.
We have rule of law, public sector expertise, competition, and capital markets.
5:15 p.m.
NDP
The Vice-Chair NDP Hoang Mai
Thank you, Mr. McBride.
Thank you, Mr. Braid.
Mr. Komarnicki for the last question, you have five minutes.
5:15 p.m.
Conservative
Ed Komarnicki Conservative Souris—Moose Mountain, SK
I'll come back to Mr. Leclerc, but Mr. McBride, I have a question.
If I'm a municipality, I'm accustomed to maybe having an engineer telling me what I need, and then putting the thing to tender, and hopefully taking the reasonable bid, and building. When I hear you talking about contractual obligations and the complexities and how risk might be assigned to one party or another and one instance where risk wasn't assigned and they had guaranteed a loan, which removed the risk essentially, that's all somewhat complicated. Trying to determine the value of the risk and trying to determine the cost of financing are unknown territory to many municipalities, and so there's the fear of the unknown. Are you really getting value for dollars? It seems to me you need a lawyer who is familiar with contractual drafting. You need an accountant who will be able to crunch the numbers, and maybe you need a technical expert to understand the criteria and develop those. It's pretty complex. What can I as a municipality expect from an organization like yours in terms of assistance? You say to tell you what we want and you'll see if you can get it for us, but let's say I want a particular project. What can I expect from you if I'm a municipality?
5:15 p.m.
Chief Executive Officer, PPP Canada Inc.
If you're a municipality, first of all I'll tell you to phone us and we'll talk to you.
We run annual investment rounds, so we'll take applications, and within three months we'll tell you, broadly speaking, whether or not your project makes sense as a P3. Then we will take you by the hand through the whole process.
We've done many projects like that. We have tools on our website, if you want to take a look at certain things. You can ask yourself 10 questions, and depending on your answers, you can get a rough estimate of whether you have something that would make good sense as a P3: here's what a business case would look like; here's how you go through it. We work with our clients all the way through. We've done that with 13 municipalities across the country. Right through the procurement process, we will share with you templates of things that have been done before. We'll say here's how Regina did their waste water treatment plant, and here are the contractual models. When we help people, they agree to give us all of the intellectual property for those things and we can share that with other municipalities so they don't have to reinvent the wheel in all of these kinds of things.
We have a roster of expertise. If you want to hire a lawyer, we've already pre-qualified people who have the type of expertise you can draw on. We can bring people right through that process and provide them with that type of expertise.
5:15 p.m.
Conservative
Ed Komarnicki Conservative Souris—Moose Mountain, SK
If I have a series of projects I know I need to do, we could ask whether any of them look like they might qualify or work, and if the answer is no, we'd use a traditional method, and if the answer is yes, we might want to explore it.
5:20 p.m.
Conservative
Ed Komarnicki Conservative Souris—Moose Mountain, SK
Mr. Leclerc, I left without getting you to answer, and I think I have enough time for you to do that.
Along the line of the gas tax fund, we appreciate a couple of things. One municipality may need a water treatment plant while another one may need something else. In my riding, one municipality built a water treatment plant, and another one applied under another program and was able to get funding for that. One has a heavy tax burden, and the other one has a lighter one. One beauty of the gas tax fund is that it can be allocated as needed. There are some core municipal needs that every municipality has, but they come up at different times.
It was mentioned by Mr. Braid that if you know you're getting a certain amount every year, you can actually go to the bank and borrow over the long term to get that project committed.
Do you see all those as positives? Perhaps you could make the comment that I never got you to make in the first five minutes.
5:20 p.m.
Vice-President, Strategic Development, Canadian Urban Transit Association
It is positive. Again, we're talking about having the right mix of tools in the tool box. You need to have tools that will provide stability and predictability of funding. That's what the gas tax fund is doing. It allows flexibility to fund projects that are a priority as identified by the municipality. From our point of view, what was missing in the tool box was a dedicated and ongoing tool to specifically fund transit projects, and now we have that as well. The question is about the program design, and we'll be working with the government on that, but we're certainly on the right track.
5:20 p.m.
Conservative
Ed Komarnicki Conservative Souris—Moose Mountain, SK
For instance, when we look at national projects or regional projects, there may be a need there for applications to be made, to see which is the best, given a certain amount of funds. Is transit that type of project? When we're dealing with a core need, such as roads, water, or sewer, every community needs those things, so there's probably room for two types of funds, one like the gas tax fund, which is not specifically directed, and one that does need to be dedicated.
Is that your view of it?
5:20 p.m.
Vice-President, Strategic Development, Canadian Urban Transit Association
Yes, it is our view of it as well.
5:20 p.m.
NDP
The Vice-Chair NDP Hoang Mai
You're out of time.
I would like to thank the witnesses for coming to meet with us today.
On behalf of those who arrived late, myself included, I apologize. We were involved in a debate in the House.
I'd like to thank all the witnesses for coming here. It's really important for our study.
I'll ask the members to stay because we're going to deal with the budget for the study.
Thank you very much.
Colleagues, we'll deal with the budget for this study. You all received the budget.
We'll entertain a motion to move the budget.
5:20 p.m.
NDP
The Vice-Chair NDP Hoang Mai
It's moved by Mr. Sullivan.
Is it the pleasure of the committee to adopt the budget?
(Motion agreed to)
