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"Kids who go from Whycocomagh or Judique-Creignish will have to commute one hour each way to school. A child who spends that much time on a bus is not 100 per cent ready for learning. After all, it’s not like flying business class. Try sleeping or reading on a school bus. And those kids will also likely never have the time to participate in after-school activities."

Joyce Rankin, parent, Judique NS

Ontario formula paves P3 way — but boards not biting

Changes to the Ontario funding formula for school construction seem tailor-made to accommodate nothing but public private partnerships and lease-back schools. Grants provide instalment funding that requires school boards to finance construction costs over 25 years. Boards can only receive funding for new schools if they can prove they need the space on a board-wide basis. This usually precipitates the closure of smaller community schools in order to build new, regional schools.

Despite the regressive funding formula, Ontario has only one lease-back school, a Catholic secondary school in Cambridge. The initial 20-year arrangement for the St. Benedict school had a fixed rate of interest lower than what the board could get through bank financing, making the project financially attractive for the board.

However, within months of the agreement, interest rates started to drop and the board sought to renegotiate its interest rate. At the same time, the financing group was having trouble assembling the required funds and another financing group took over, on the condition that the lease be renegotiated from an operating to a capital lease. The change in lease status left the board assuming more risk than the original deal.

An official with the Waterloo Catholic School Board says in hindsight, if they’d known how low interest rates would fall it would have been cheaper to go to the bank.

Boards across Ontario have rejected P3 schools, with the most recent rejections coming from Peel and Dufferin-Peel boards. In both cases, the boards concluded they would not save money through lease-backs.

Yet the spectre of lease-backs still looms in Ontario, as the Conservative government tries to force boards into P3s by severely limiting capital funding options for financing new schools. These restrictions and the inability to raise their own revenues leave school boards in a difficult situation, one that threatens the quality of education in the province.

British Columbia is also home to one lease-back school in Abbotsford. In announcing the new school, the BC Minister of Finance and school district chair both highlighted avoiding debt as a positive aspect of the public private partnership. The government reports the 20-year lease will save the province $200,000 in financing costs, but those claims remain unproven.