Public-Private Partnerships (PPP) Sector in Canada

An Expert's View about Building Products and Construction in Canada

Posted on: 8 Sep 2010

Many Canadian government agencies throughout all levels (municipal, provincial/territorial, federal) have established framework for the use of Public-Private Partnerships (PPP)

Sector briefing Public-Private Partnerships (PPP) Opportunities in Canada NB: Latest available figures used Why Canada? Many Canadian government agencies throughout all levels (municipal, provincial/territorial, federal) have established framework for the use of Public-Private Partnerships (PPP) as an alternative form of financing infrastructure projects. Canada is experiencing growing populations throughout the country, greater demands on government services and increasing infrastructure gaps with an inadequate tax base to cover requirements. The infrastructure deficit in Canada is forecast at CAD$300B (£193.5B) by 1 2025 . The provincial governments, with responsibility for key infrastructure such as hospitals and ?The infrastructure deficit transportation, are the most proactive in in Canada is forecast at pursuing PPP projects. British Columbia, CAD$300B by 2025.? Alberta, Ontario and Quebec have established related agencies to manage the PPP agenda. Find general information on the Canadian market conditions on the UKTI Website. The Doing Business in Canada Guide for Canada gives an overview of Canada?s economy, business culture, potential opportunities and an introduction to other relevant issue. 1 Infrastructure 2007 - A Global Perspective, Jonathan D. Miller, Urban Land Institute and Ernst & Young UK Trade & Investment Sector briefing: Public-Private Partnerships Opportunities in Canada (£6.4B), CAD$5B (£3.2B) of which is private Opportunities 4 capital . British Columbia (BC) is considered the most Overall, PPP continues to gain acceptance as advanced of the provinces with regard to an alternative form of financing for all levels of 5 pursuing PPP projects . Factors supporting the government (municipal, Provincial/territorial, 6 BC model include : federal) in Canada. Many provincial levels of 7 ¾ The establishment of Partnerships BC to government have led the momentum and foster PPP expertise in the public sector and established dedicated PPP agencies to drive providing guidance during the procurement forward the PPP agenda in Canada. Many UK process; project assessment, business plan, companies have established a presence in 8 approval phase, implementation phase . Canada to better service the PPP market, Projects originate from Partnerships BC, including Carillion Canada, John Laing which are then presented to BC ministries Infrastructure Canada, Balfour Beatty Capital, for consideration. Turner & Townsend. Other UK companies are ¾ Use of the Capital Asset Management able to serve the market without maintaining a Framework (CAMF) to assess traditional physical presence in Canada. versus alternative means of financing projects. ¾ Maintaining a balance between the public?s Federal right to know versus protecting the private The 2007 federal budget outlined a CAD$1.3B sector?s intellectual property. (£0.83B) Public-Private Partnerships (P3 Fund) ¾ Commitment to the use of PPP; 10-20% of to invest in PPP suitable projects based on the capital projects are expected to use PPP. Building Canada Fund. The 2008 federal budget included the establishment of a crown corporation, PPP Canada Inc, to develop and Alberta: Alberta has established the support the PPP market in Canada. It is meant Alternative Capital Financing Office (based to facilitate the use of PPP for infrastructure within the Alberta Treasury Board) to assess projects throughout the country at all levels, the use of alternative means, including PPP, in including all projects requesting over CAD$50M pursuing capital projects where better value (£332.3M) of federal funding will be required to can be demonstrated. The province?s 2010-13 evaluate their suitability as a potential PPP Capital Plan outlines plans for CAD $20B 2 9 project . The Agency completed its first call (£12.9B) worth of capital projects for for project applications to the P3 Fund in municipal infrastructure, highways, healthcare, October 2009. Twenty applications were schools, community facilities, water and received from provincial and territorial wastewater management, housing, governments as well as Indian and Northern government facilities, equipment and other Affairs. Six applications were for municipal capital. PPP projects pursued in the province projects. The projects ranged from CAD$45M include the Anthony Henday Southeast ring (£29M) to CAD$500M (£322.3M) in capital road in Edmonton, the Northeast Stoney Trail costs. PPP Canada Inc aims to commit over ring road in Calgary, and the Alberta Schools 10 CAD$100M in 2010 (£64.5M) to projects that Alternative Procurement project (ASAP) . In 3 demonstrate leadership in P3 procurement June 2010, 18 new schools were built using the 4 Parnerships BC Service plan 2009/10-201/12 Provincial www.partnershipsbc.ca/files/documents/partnershipsbc200 9-10to2011-12serviceplanfinal_000.pdf 5 British Columbia In terms of PPP legislation; a dedicated agency, and (BC): Led by the province?s number of projects completed, underway or planned. PPP agency, Partnerships BC, since its 6 Creating the Winning Conditions for Public Private establishment in 2002, 25 projects have been Partnerships (P3s) in Canada, TD Economics Special completed, are under construction or have Report, 22 June 2006: 7 Modelled after Partnerships UK. been announced. The investment value of 8 The BC treasury approves and oversees capital projects. these projects is approximately CAD$10B 9 Alberta?s 2010-13 Capital Plan www.finance.alberta.ca/publications/budget/budget2010/c 2 Building Canada Plan www.buildingcanada- apital-plan.pdf 10 chantierscanada.gc.ca/alt-format/pdf/booklet-livret- A presentation on Alberta?s plans for PPP schools can eng.pdf?wt.ad=plan-eng viewed at 3 Budget 2010 www.budget.gc.ca/2010/plan/chap5- www.education.gov.ab.ca/P3Project/ANewApproachtoBuildi eng.html ngSchoolsAH.pdf UK Trade & Investment Sector briefing: Public-Private Partnerships Opportunities in Canada PPP. These schools were completed a month ? One-quarter valued over CAD$250M ahead of schedule and (£161.3M) it is estimated that the Ontario?s infrastructure gap is estimated to be province saved CAD$97B (£62.3M) compared 18 over CAD$100B (£64.5B) . to the cost had the schools been built using traditional methods. The second phase of 14 new P3 schools is currently under construction 11 Quebec: In 2010, Infrastructure Québec was and is due to be completed in 2012-13 . established to oversee all provincial government infrastructure procurement and The Province does received substantial construction in Quebec. It will consider how royalties from the oil and gas sector and is the projects are procured and assumes the role of only province without a provincial sales tax. However, i the former L'Agence des partenariats public-nfrastructure demands have not privé du Québec (PPP Quebec). kept pace with Alberta?s recent and rapid economic expansion. Municipal: More and more, municipal levels of Ontario: governments are taking up the use of PPP. In 2004, the Ontario Ministry of 12 Their limited resources, capacity and internal Public Infrastructure Renewal (MPIR) expertise in this field has lagged from the pace released its framework strategy for Alternative of provincial level of government using PPP. Financing and Procurement (AFP), ?Building a 13 There are a number of municipalities that are Better Tomorrow? and in 2005, established 14 now actively pursuing a PPP agenda, including Infrastructure Ontario , a branch of MPIR. the cities of Ottawa, Winnipeg, Calgary. This framework follows similar to that of BC in terms of approving PPP/AFP projects encompassing appropriate risk transfer and Outlook and Market Access visible value for money under a system of With the majority of responsibility for transparency and accountability. The Ontario infrastructure development at the provincial government outlines priorities and outcome level, the pace of PPP progress will continue to objectives. Infrastructure Ontario is tasked w differ across the country. However, ith determining which method of procurement 15 governments are seeking new solutions to to utilise; PPP and non-PPP options . The meet infrastructure demands and overall, PPP ReNew Ontario: Five-Year Infrastructure 16 is gaining momentum as a viable alternative. Investment Plan includes CAD$30B (£19.4B) worth of infrastructure The federal government has recognised this investment. About one- and has established a federal government quarter of these projects will be AFP. There agency, PPP Canada Inc, to better co-ordinate are 40 AFP projects currently in the pipeline for efforts across the country. development, most in the healthcare sector. 17 Of these : Provincial government agencies recognise ? One-quarter valued between CAD$50M (£32.3M) and CAD$100M (£64 domestic capacity is being strained to fulfil the .5M) one-half valued between CAD$100M (£64.5M) and current PPP pipeline, with many PPP project CAD$250M (£161.3M) tenders seeing similar bidders shortlisted partly due to limited domestic PPP expertise. These 11 Government of Alberta press release governments are encouraging more www.alberta.ca/acn/201006/28469F3D7C00F-D5F0-14B5- international bidders/consortium partners on CFFD525DC98458AD.html 12 projects in order to ease the pressure on The Ontario Ministry of Public Infrastructure Renewal domestic capacity, and introduce more www.pir.gov.on.ca 13 Building a Better Tomorrow innovation and competition in the market for www.pir.gov.on.ca/english/aboutpir/publications/BBT- PPP projects. Framework_EN.pdf 14 Infrastructure Ontario www.infrastructureontario.ca 15 Certain restrictions exist to direct market Ontario has moved away from PPP terminology in favour access by foreign firms such as practising law, of reference to AFP. 16 ReNew Ontario: Five Year Infrastructure Investment Plan some government tenders may require local www.pir.gov.on.ca/english/aboutpir/publications/Renew- partners, differing levels of government Ontario_EN.pdf 17 Infrastructure Ontario Discusses Approach and Deal Flow 18 for Alternative Financing and Procurement ReNew Ontario: Five Year Infrastructure Investment , David Livingston, President & CEO, Infrastructure Ontario, For Plan the Record, Canadian Council for Public Private www.pir.gov.on.ca/english/aboutpir/publications/Renew- Partnerships, 6 April 2006 Ontario_EN.pdf UK Trade & Investment Sector briefing: Public-Private Partnerships Opportunities in Canada support for PPP, etc. However, factors such as staff overseas in British Embassies, High a similar legal system to the UK, language, Commissions and Consulates, across all sectors longstanding Canada/UK historical, cultural and and in over 100 markets. business relationships, skilled workforce, etc, give rise to opportunities for UK firms in the You can be alerted to business opportunities on Canadian PPP market. a regular basis by registering on the UKTI website. More on UKTI?s business opportunities The UK financial and related professional service services industries are well regarded in Canada. Canadian industry is keen to partner with British players to create win-win business relationships. UK firms with PPP expertise are winning business in the Canadian market, either directly or with Canadian partners. Opportunities for UK firms include: ¾ Direct bidding on government tenders. PPP tenders can be viewed on related provincial PPP agency sites or on Merx www.merx.com, a central procurement portal utilised by all levels of government to post public tenders. Some exceptions apply to listing, for example, on Merx, value of the tender, sensitive nature of software/technology required, emergencies, etc. In these instances, the agency will manage the tender directly. ¾ Providing guidance to Canadian governments at all levels and the private sector on the PPP process. The UK?s experience and expertise in this field lends well to Canada?s developing PPP industry. The market welcomes and is keen to understand lessons learned from the UK. Though Canada maintains a highly skilled workforce, UK expertise can fill the knowledge gap in order to strengthen the PPP skills set of the Canadian market. ¾ Canadian firms have ready and direct access to the market. UK firms can leverage this advantage to partner with firms interested in pursuing PPP projects. Though progress on PPP may differ among governments, the private sector is eager to pursue opportunities in this field and develop its expertise. ¾ Many Canadian companies have established business relationships with other markets such as the US and South America. Once partnerships in the Canadian market are established, there may be potential for Canada/UK partnerships to pursue PPP projects in third markets. If you have any questions on the opportunities above, contact the UKTI contacts named in this report. Business opportunities aimed specifically at UK companies are added daily to UKTI?s website. These leads are sourced by our UK Trade & Investment Sector briefing: Public-Private Partnerships Opportunities in Canada Major events and activities UKTI contacts Canadian Council for Public-Private Gilda Carbone Partnerships (CCPPP) Annual Conference Trade Officer www.pppcouncil.ca/events_nationalCon.asp British Consulate-General Toronto, Canada Tel: (001) 416 593 1290 ext 1+2224 Email: Gilda.Carbone@fco.gov.uk Find full details of all events in this Web: www.ukti.gov.uk country and sector on the UKTI website. New export events are added daily to the site Mathieu Blandford and you can register to be alerted to them on a Trade Associate daily, weekly or monthly basis British Consulate-General Toronto, Canada UKTI?s Tradeshow Access Programme (TAP) Tel: (001) 416 593 1290 ext 1+2257 provides grant support for eligible Small & Email: Mathieu.Blandford@fco.gov.uk Medium Sized Enterprises (SME's) to attend Web: www.ukti.gov.uk trade shows overseas. Find out more about UKTI support for attendance at overseas events UK Trade & Investment Sector briefing: Public-Private Partnerships Opportunities in Canada Next steps - How UKTI can help ? Arranging appointments British companies wishing to develop their ? Organise seminars or other events for you business in the Canadian market are advised to to meet contacts and promote your undertake as much market research and company in the Chinese market planning as possible in the UK. UKTI?s team in Canada with its wide local knowledge and This work is available via ourOverseas Market experience, can provide a range of services to Introduction Service (OMIS) a chargeable British-based companies wishing to grow their service which assists British-based companies business in global markets. wishing to enter or expand their business in overseas markets. This can include: ? Provision of market information To find out more about commissioning this ? Validated lists of agents/distributors work, or accessing other UKTI services and ? Key market players or potential customers specialist advice, please visit the UKTI website in the Canadian market to find contact details for your local UKTI ? Establishment of interest of such contacts office. in working with you Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Innovation & Skills, and the Foreign & Commonwealth Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. Published 2010 by UK Trade & Investment. Crown Copyright © UK Trade & Investment Sector briefing: Public-Private Partnerships Opportunities in Canada
Posted: 08 September 2010

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