Transport Committee on May 12th, 2015

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Mr. Romoff, I left you off last time, so I want to make sure I direct some questions to you in this round, starting with this one: how do P3s save taxpayers money?

[Mark Romoff]

Well, in several ways. I mentioned earlier the economic impact assessment we had by an independent organization just last year, which demonstrated that these projects save governments $9.9 billion. That number is a reflection of the fact that projects are coming in on time and on budget. There is an expense there that normally is incurred by governments and is averted in that particular instance.

More importantly, the essence of a public-private partnership is that 30-year life cycle. What makes P3s quite unique is that they are ensuring that an asset that's being built will be maintained to a standard agreed to by both government and the private sector at a particular level and returned to government 30 years from then in exactly the condition that was agreed to. If that isn't the case along the way, for instance, if the facility is not maintained, the private sector is penalized for that.

For instance, if it's a hospital and the contract says—it's quite granular—that the air conditioning in the OR will not be out of service for more than an hour and if it is, you'll be penalized $10,000, I can promise you that in every instance that air conditioning will be working within 59 minutes. You have these provisions in these contracts to ensure that the standards agreed to are met. If not, the penalties are severe and are all absorbed by the private sector.

The cost of traditional infrastructure is very different in a P3. As you know, there are several projects, particularly in Toronto, that are way behind schedule and way over budget, including the Spadina extension, by $400 million, and Union Station, Nathan Phillips Square, and the waterfront. They are all projects that went ahead as traditionally procured projects and are way over budget, and therefore they are incurring expenses that government otherwise wouldn't incur if it were a P3.

While I won't address Mr. Sullivan's comments in any depth, what I will say is that the Union Pearson Express, delivered on time and on budget, will be open and functional on June 6. I promise you that Mr. Sullivan will be on board at some point and going to the airport in Toronto.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

I'll watch for him and I'll let you know.

Mr. Romoff, from your perspective, what impact will the new public transit fund have on the ability of large cities to build major infrastructure projects? Also, how will they use the tools?

[Mark Romoff]

First and foremost, as you know, the announcement was made, but the terms and conditions around the way in which the fund will operate have yet to be finalized, so it's a little premature to comment on the substance of that. What I will say is that, again, experience in the public transit area in Canada has been very strong and very positive, so if you add an additional billion dollars a year into the mix, that can only make a significant contribution.

Again, it's leveraging. I'm sure that when Mr. McBride was here, he would have pointed out that his $1.25-billion fund really leverages about $6 billion to $6.5 billion of activity around the country. The same will be the case for this $1-billion transit fund. It could be a lot more, because we know that urban transit is probably every major municipality's biggest concern, and those projects are not inexpensive. The more money you can put into urban transit, the better. But what we do know is that the private sector and the private financing in particular are very actively interested in those projects and have invested substantially, including the pension funds. Again, Ms. Young will know that in the case of the Canada Line, for instance, the Caisse de dépôt out of Quebec was a major investor in that particular project.

There is a lot of private capital available in the country that is hunting for good projects. Urban transit projects are very good projects. I think you'll see that this additional billion dollars in the mix will make a significant difference over the long term.

[The Chair, Conservative, Larry Miller]

Ms. Dedman, Mr. Carlton, Mr. Rubinstein, and Mr. Romoff, thank you very much for being here. We appreciate your presentations and what you have—

Mr. McGuinty.

[David McGuinty, Liberal, Ottawa South, ON]

On a quick point of order, Mr. Chair, when Mr. Moore was here as ADM of policy from Infrastructure Canada, I requested two sets of documents.

One had to do with getting numbers in terms of what the federal government is actually putting into infrastructure and what percentage of GDP that is compared to OECD countries and their federal contributions. Can we get that number? He endeavoured to get it.

Two, he was going to get the analysis to substantiate the minister's claim that 30,000 jobs would be created on the bridge to Montreal. Do we have that information yet?

[The Chair, Conservative, Larry Miller]

They're working on it.

[David McGuinty, Liberal, Ottawa South, ON]

Do we have a timeline, Mr. Chair, when that might—

[The Chair, Conservative, Larry Miller]

I don't. I'm just going by what the clerk just said to me.

[David McGuinty, Liberal, Ottawa South, ON]

Can we ask the clerk?

[The Chair, Conservative, Larry Miller]

Yes, we can follow up on that.

They said it would be by the end of the month.

The meeting is adjourned.