Thank you, Mr. Chairman, and thank you for the question. I was waiting for it and looking forward to it.
The yield at which, say, Triple-A federal government bonds are sold is typically going to be 1% or 1.25%. It would be foolhardy, however, to imagine that this represents the cost of borrowing that one should transport and carry over in comparison to a P3 contract.
First of all, the debt incurred if the financing is done in-house bears an opportunity cost. It's money that could have gone somewhere else; it could have gone to debt reduction. Here the Parti Québécois, in the course of its most recent election in Quebec, was on to something when they said that perhaps government ought not to be investing in risky assets on behalf of its residents, but reducing debt, because the risks associated with debt reduction are approximately zero and you have a known return: you have the interest costs avoided by reducing your debt instead.
On the first instance there's an opportunity cost associated with government taking on the financing. Second, there is of course the dead-weight loss associated with the implicit tax burden associated with debt. You have to do a little calculation after the fact to account for the fact that taxes cost money, they impose a burden on the economy, and the effective interest rate in net present value terms is much higher than the 1%, because there's a cost of taxation associated with it.
Then, of course, there's the financing risk itself. If government takes on full financing—