Public Accounts Committee on June 7th, 2018

[Alexandra Mendes, Liberal, Brossard—Saint-Lambert, QC]

On the question of tolls, we are putting an electric train on the bridge, and this is being done by the Quebec pension fund, is a big project of the Caisse de dépôt et de placement du Québec. As far as I understand, the financial arrangement is that they will obviously be getting some revenue from running the train over a period of 30 or however many years it will be, which is clearly why they're investing. They're not doing it simply for investing in the train.

Could this compensate in any way for the taking away of the tolls?

[Kelly Gillis]

Any of the changes, any costs related to the REM train coming on the particular bridge, would be borne by CDPQ in making sure that the design of the bridge is not financially impacted by that change.

[Alexandra Mendes, Liberal, Brossard—Saint-Lambert, QC]

I understand that part, but I want to try to understand the situation for the private investor, SSL, the constructor, the builder. They won't get the revenue from tolls, but will they get any revenue from the Caisse de dépôt et de placement?

[Kelly Gillis]

The toll revenue was never going to go to SSL. It was always separate from that. It was always going to go back to the fiscal framework.

[Alexandra Mendes, Liberal, Brossard—Saint-Lambert, QC]

That was not how they were going to get back their part of the P3.

[Kelly Gillis]

No. It was always separate. It was going back to the fiscal framework, taking into consideration the finance for the overall general revenue. It was never directly related to the—

[Alexandra Mendes, Liberal, Brossard—Saint-Lambert, QC]

How were they going to get their compensation from the P3?

[Kelly Gillis]

They would be reimbursed with service arrangements, payments from the government directly, for meeting service standards and maintaining the operations of the bridge.

[Alexandra Mendes, Liberal, Brossard—Saint-Lambert, QC]

Okay, that would be a different kind of P3 from the ones we've seen here, for example, where the ones who build toll highways usually are the ones who get the tolls back. This is completely different.

[Kelly Gillis]

This would be different. There's a full range of P3s, some with a revenue risk component. This was never intended to have that. It was never part of the operations from the beginning. That is not a change.

[Alexandra Mendes, Liberal, Brossard—Saint-Lambert, QC]

Mr. Ferguson, does that change your opinion on how this fiscal arrangement may or may not impact the viability of P3?

[Michael Ferguson]

Again, as the deputy said, it wasn't part of the compensation for the department. The impact of the reduced revenue is an impact on the government's fiscal framework. The impact on the contract is the fact not having tolls will cause more traffic on the bridge. The private partner is responsible for the maintenance of the bridge through that first 30 years. That will have an impact on what they have to do.

There will be an impact for the maintenance, not on the revenue side but on the cost side. Then on the revenue side, the impact is on the government itself, because that money is no longer in future budgets.

[Alexandra Mendes, Liberal, Brossard—Saint-Lambert, QC]

Thank you very much.

[The Chair, Conservative, Kevin Sorenson]

We'll move to Ms. Sansoucy again.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

Thank you, Mr. Chair.

My questions will be for the Infrastructure Canada officials.

As you said at the outset, the report gives you an opportunity to learn and improve your practices. I looked over the detailed action plan you submitted in response to the Auditor General's recommendations, and I have a few questions.

The recommendation in paragraph 4.62 of the report indicates that the method for evaluating proposals for public-private partnership contracts should include the development of assessment criteria and the determination of evidence required to ensure that bidders meet the requirements. You stated that, next year, you will work with Public Services and Procurement Canada, or PSPC, to review the evaluation approach.

Do you already work with the department on a consistent basis? Given your experience, what changes do you think could be made?

I know you're doing a study and will be submitting the results, but do you already have a sense of the changes that could be made in light of this recommendation?

[Kelly Gillis]

Thank you for your question.

Yes, PSPC has always been a member of our team. I mentioned in my opening statement that our team was made up of representatives from various departments. We have a great working relationship with PSPC.

When dealing with a project as complex as this one, we always learn lessons and look at the factors we need to consider in projects going forward. We've already taken certain things into consideration and shared information in support of the other bridge we are currently building, the Gordie Howe International Bridge. The idea is to take what we learned from this project and apply it to others.

That process has already begun, but once the bridge is complete, we will need to look back over the entire project to determine what we can do better to improve our processes.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

Do you already have an idea of the types of changes that should be made?

[Kelly Gillis]

I think we've already learned how important the governance mechanism and information system are. A tremendous amount of documentation and information is shared between the government and the private partner. It's important to make sure that a good information system is in place. That's something we've already communicated. It's also important to make sure that, through the governance structure and with the government's independent technical experts, the support is there to help them review the information that is coming so that we get the best possible advice throughout the process.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

I see.

Do you have anything to add, Mr. Fortin?

[Marc Fortin]

Yes, if I may. I think you raise a very important point, Ms. Sansoucy.

We build infrastructure of all sizes, and we see in our programs, other than the Champlain Bridge project—other types of programs, like public transit—that when infrastructure is built, a long-term maintenance plan is sometimes necessary right from the get-go. In many cases, infrastructure is built and problems crop up later.

I think this is a good example. From the outset, the systems the deputy minister was talking about were put in place, and they will remain in place. We need to make sure that the contract with the partner clearly provides for this kind of follow-up mechanism.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

Thank you.

In response to the recommendation in paragraph 4.45, which concerns future analyses, you state the following:

Infrastructure Canada will examine the development of a benchmark study in collaboration with Public Services and Procurement Canada (PSPC).

The benchmark study will be developed against a representative sample of traditionally procured infrastructure projects on cost and time performance indicators.

Forgive me for asking, but wasn't that already in place?

[Kelly Gillis]

We do have information, but we can always learn from our project experiences and improve accordingly.

I will now ask Ms. Bossé to comment, as she may be able to provide more details on the information we already have.

[Natalie Bossé]

Indeed, the existing information did ultimately inform our decision-making. We have found, however, that there is always room for improvement. It's important, though, to make sure that all the data can be found in the same place, and that's why, in our response to the audit recommendation, we said we would work with the authority responsible for federal procurement, PSPC. That way, the lessons we learn from our experiences can also inform other projects.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

My next question may lead us into a discussion on information management.

The recommendation in paragraph 4.44 concerns the choice of procurement models and the government's 2011 decision to use a P3 procurement model. The recommendation applies to the period before the qualitative and value-for-money analyses were done. In your response, you said that Infrastructure Canada completed a business case leading to a determination as to the procurement model.

I'd like to know whether the business case was done before or after the procurement model was chosen. When I read the report, I got the sense that the decision had already been made and that the sequence of events leading up to the decision could also serve as a lesson learned.

It's a key question.

[The Chair, Conservative, Kevin Sorenson]

Pardon me?