Thank you, Mr. Chair.
I'm pleased to be here on behalf of PPP Canada to discuss Bill C-38, An Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures.
The infrastructure delivery model, known as public-private partnerships, or P3s, has been successfully implemented through the creation of government agencies in the United Kingdom, Australia, and across Europe. To date, the provinces have led the way in the use of P3s in Canada, notably Ontario, Quebec, British Columbia, and Alberta. However, with the creation of PPP Canada, we are seeing more and more jurisdictions adopting policies and frameworks to leverage greater value for money through P3 procurement. This increase in their use has contributed to Canada becoming a recognized global leader in the P3 industry.
P3s are a long-term performance-based approach for procuring public infrastructure, where the private sector assumes a major share of the responsibility in terms of risk and financing for the delivery and the performance of the infrastructure from design to structural planning to long-term maintenance.
In practical terms, this means that governments across Canada harness the innovation and expertise of the private sector to provide the most effective solution to deliver services to Canadians. Through allowing the private sector to design, build, finance, operate, and maintain such things as roads, bridges, and water and waste water treatment facilities, it ensures that the overall cost and risk is considered up front.
More importantly, governments do not pay for the asset until it is built and a substantial portion is paid over the life of the asset if it is properly maintained and performs its services. Moreover, the costs are fixed over the life cycle of the asset, meaning that taxpayers are not on the financial hook for cost overruns, delays, or any performance issues over the asset's life.
For example, imagine that the company that built your house was also responsible for any repairs and maintenance over your 25-year mortgage. Given the amount that you will pay them every year, once it is constructed, is agreed to before the house is built, your payments do not go up if something breaks or needs replacement. Your builder, therefore, would consider the most cost-efficient way of doing something, perhaps installing a metal roof rather than shingles. More expensive to install, but more durable, and easier and cheaper to maintain in the long-run. Moreover, if your dishwasher breaks and they don't come to repair it in the agreed amount of time, you can deduct that from your next payment.
The Government of Canada has recognized the potential benefits of the P3 model and created PPP Canada, a crown corporation, to improve the delivery of public infrastructure by achieving better value, timeliness, and accountability to taxpayers through P3s.
PPP Canada's operational focus is threefold: acting as a source of expertise and advice on public-private partnerships through knowledge development, and sharing that knowledge; building P3 procurement, knowledge, and capacity among federal departments; and leveraging greater value for money from federal investments in provincial, territorial, municipal, and first nation infrastructure through the P3 Canada fund.
Budget 2011 created a new federal P3 screen for infrastructure with capital costs of $100 million or more and a useful life of at least 20 years. Federal departments are now required to evaluate the potential for using a P3 for large federal capital projects. Should the assessment conclude that there is P3 potential, the procuring department will be required to develop a P3 proposal among the procurement options. Furthermore, the budget also encouraged departments to explore the potential of a P3 approach for other types of procurements.