Thank you, Mr. Chair, the clerk, members of the committee, and staff.
Established in 1993, the Canadian Council for Public-Private Partnerships is a national, not-for-profit, non-partisan, member-based organization with broad representation from across the public and private sectors. We're not a lobby group. We have government as our members and as our partners.
Our mission is to promote innovative approaches to infrastructure development and service delivery through P3s with all levels of government.
On behalf of the council, I'm pleased to appear before this committee for pre-budget consultations.
We have submitted a fulsome brief to the committee with our recommendations. Given the tight schedule, I'll just touch on a few high-level points and look forward to your questions later.
When we talk about P3s, we're generally referring to a single, fixed-price contract where the private sector designs, builds, finances, maintains, and sometimes operates infrastructure on behalf of the public sector over a long-term contract, typically 25 to 35 years.
It's important to note in these contracts that the ownership and control of the asset always remains with the public sector. P3s tend to be most suitable for complex projects that carry a significant risk and are of a large size, greater than $50 million or $100 million.
We will be the first to say that P3s are not a panacea. At present they account for approximately 10% to 15% of public infrastructure projects, but when the right project is done for the right reasons, P3s are proven to lead to higher quality infrastructure that is delivered on time, on budget, with savings to taxpayers. The transfer of risk to the private sector, putting private capital skin in the game, and taking a life-cycle view of an asset leads to significantly better results.
The Canadian P3 sector has been active and continues to grow and is now recognized as a best-in-class model worldwide. We now have 236 projects under way in Canada, either in operation, under construction, or in procurement, and the value of projects reaching a financial close is now over $93 billion. An independent economic impact assessment completed by InterVISTAS demonstrated that in the last decade, P3s created over 290,000 direct jobs, added over $25 billion to direct GDP, and saved governments $9.9 billion in measurable results.
Looking to this budget, we know, as you know, that the economy is in need of a boost, and we know that all levels of government are facing large infrastructure deficits. We support the need for short-term stimulus, and we believe a focus on infrastructure will be your best investment, even if that means running modest deficits. Our recent public opinion research confirms the vast majority of Canadians support this position.
It is likely that P3s will only play a role in short-term stimulus spending where major infrastructure projects are already in the P3 procurement pipeline. Those projects should continue moving ahead under the P3 model.
The council is primarily focused not on the short term, though, but on how the government can benefit from P3s under its long-term infrastructure plan. To that end, we support the government's focus on economic, social, and green infrastructure. I believe you'll find that P3s do have a strong track record of success in each of those sectors. Public transit, broadband, social housing, first nations infrastructure, and water and waste-water facilities are just some of the priority areas within those three categories. Our submission goes into greater detail with examples of P3 success stories across those sectors.
We believe there is an opportunity with this budget to set out a long-term infrastructure plan that addresses the needs of municipalities, provinces, territories, indigenous governments, and of course, the federal government.
With decision-making on projects moving to the local level, our preference is to keep the P3 screening for projects over $100 million, but in lieu of that, if decision-making is going to a local level, the federal government ought to ensure that due diligence is happening within other levels of government, and assisting with resources of that capacity does not currently exist.
It is important that communities have the capacity to make fact-based decision-making around procurement options as time delays and cost overruns can have a significant operational impact on local governments. One needs to look no further than the traditionally procured York to Spadina subway in Toronto, which is now delayed and running $400 million over budget, leaving York Region and the City of Toronto to make up that shortfall.
We know that P3s will be one of the critical tools at the government's disposal to ensure its infrastructure plan is successful, and we know Canadians understand the importance.
Just last month we commissioned a study by Nanos Research which found that two-thirds of Canadians support P3s, more than a 5% increase from our last study in late 2013. The results are not surprising. Increasingly, the successful track record of the P3 model is recognized.
Our council looks forward to working with the government over the coming years to help maximize its returns on its long-term infrastructure plans.
Thank you.