Thank you, Mr. Chair.
I appreciate the opportunity to speak today about the Ministry of Infrastructure and the ministry's central role within the Ontario government to oversee capital infrastructure investment. The ministry is integral to modernizing Ontario's infrastructure, and also has responsibility for overseeing Ontario's growth planning policies and Ontario's large portfolio of real estate assets.
In this role, the ministry has legislative responsibility for Infrastructure Ontario, the agency of the government that manages delivery of major infrastructure projects. I should note that IO's responsibilities have increased since the June 2011 merger of the agency with the Ontario Realty Corporation, which managed the realty portfolio I just mentioned.
Well-maintained public infrastructure is the backbone of a strong economy and the cornerstone of healthy communities. But from the mid-1970s until the turn of the century, developed economies typically underinvested in infrastructure. Over the past decade, however, there have been significant increases in international infrastructure investment.
In Ontario, the province has been making historic investments in public infrastructure. In total, Ontario invested about $75 billion in infrastructure from 2004-05 to 2011-12 and plans to spend another $12.9 billion in this fiscal year.
As the province committed itself to increased investment, there was also recognition of the need to modernize our approach and reform our methodologies around infrastructure expenditures. In other words, in order to enhance economic competitiveness and improve delivery of social programs, the Ontario government updated procurement processes to get more bang for our buck.
That’s why Infrastructure Ontario was established in 2005—a single, dedicated infrastructure agency that uses the alternative financing and procurement model, or AFP, for capital projects. This model delivers value for money by involving the private sector. It leverages private sector expertise to build public infrastructure on time and on budget, letting the private sector take on the market risks that it is best able to manage. IO’s track record has proven highly successful, delivering 24 major AFP projects, virtually all of them on time and on budget, with value-for-money savings of more than $600 million.
The Ministry of Infrastructure works closely with IO in an oversight capacity. The ministry provides the policy framework, and all projects deemed suitable for AFP delivery are assigned to IO through the direction of the Minister of Infrastructure. Those AFP projects must demonstrate value for money and are procured by IO through a standardized process.
Because of IO’s track record, the Ministry of Infrastructure is expanding the use of AFP. Ontario’s long-term infrastructure plan, Building Together, was released in June 2011. It outlined a number of key initiatives, including a broad focus on improved asset management and the expansion of IO’s role. The Ministry of Infrastructure will make recommendations to the government on the procurement method and delivery of all infrastructure projects valued at more than $50 million owned by the province and for hospital and college infrastructure. Building Together also noted that recipients of provincial infrastructure funding in excess of $100 million will consult with IO to determine whether IO can assist with their procurement.
A few weeks ago the Government of Ontario submitted recommendations for the federal long-term infrastructure plan to succeed the 2007 Building Canada plan. The submission mirrored Building Together and advised the federal government to build on the establishment of the P3 Canada Fund and to promote greater use of AFPs, where appropriate, across jurisdictions.
Our economy and quality of life depend on the modern public infrastructure. In the current climate of fiscal restraint, it matters all the more that public infrastructure projects are well-managed to maximum impact. This committee's hearings are important in this regard, as attention focuses on the size, means and benefit of public infrastructure expenditures.
Thank you.