The federal government has historically helped fund local infrastructure like roads, highways, sewers, bridges and recreation centers. The Harper Conservatives, like the Martin Liberals before them, are using that role to promote privatization.
PPP Canada Inc. was established in March 2007, modeled on provincial organizations with similar mandates in British Columbia, Quebec and Ontario. While other federal funding programs also encourage privatization through Public-Private Partnerships (P3s), this new corporation takes federal efforts to force P3s on communities to a new level.
What is a P3?
A P3 is a form of privatization. These multi-decade contracts for private management of public services or infrastructure can include private financing, ownership and/or operation.
The long-term financial obligations of P3s are a form of debt which may be hidden from the public. We know from experience in Canada and the UK, that the high costs of P3s are not only financial. Additional costs include loss of local control, construction delays, fewer good jobs and poorer quality service.
What is the purpose of PPP Canada Inc.?
Little information has been made public to date. Here is what we know.
PPP Canada Inc. is an independent Crown corporation designed to both promote and assess P3 projects. According to information available from the Government of Canada, PPP Canada Inc. will:
- “Grow” the P3 market in Canada;
- Manage a $2 billion+ P3 Fund, providing up to 25% of municipal and provincial P3 costs;
- Review and assess proposals for P3s seeking federal contributions using a new “P3 screen”;
- Provide advice and expertise for P3 matters; and
- Target municipal and small projects in particular.
What is a P3 Screen?
Project proposals will be subjected to a screen that will help determine their eligibility for federal support. In 2008, CUPE Research obtained Interim Guidelines for the P3 Screen that would create hurdles to keeping projects public. The intent is to establish P3s as the default solution for infrastructure projects.
“Proponents of large projects will be required to demonstrate that P3 opportunities have been considered and if a P3 option is not selected, demonstrate why.”
It’s no surprise that there is such secrecy surrounding PPP Canada Inc. when we look at who the key players are and their potential conflicts of interest.
Among the members of the recently appointed board are:
- John McBride, who helped arrange the Confederation Bridge that cost $45 million more than it would have, had it been built through traditional public procurement. He is now earning up to $230,000/ year as chair of PPP Canada Inc.
- Former and current high level players from SNC-Lavalin, BMO Financial Group, and the firm KPMG. All of these companies are active players in P3s and stand to profit from them.
Importantly, neither the Public Service Employment Act, nor the Access to Information Act, applies to PPP Canada Inc. Both of these pieces of legislation exist in order to guarantee a certain amount of transparency and accountability to the public.
What is this costing us?
A huge amount of public resources are being funneled into generating private profits through PPP Canada Inc.
In addition to managing the original $1.25 billion federal P3 Fund, PPP Canada Inc. was allocated:
- $25 million over 5 years in Federal Budget 2007;
- $5 million in operating funds in 2008; and
- $95.5 million more was allocated to the P3 Fund in 2009.
What does it mean?
The dual role of both promoting P3s and reviewing proposals is cause for concern about conflict of interest when we consider the amount of public money involved and who stands to benefit. Further, the agency lacks mechanisms to be held accountable for its spending of public funds, to protect against corruption and has not made eligibility requirements available for public scrutiny.
In addition, the recent unstable economic climate has clearly exposed the flaws of relying on the market to deliver essential public services. Yet P3s will continue to provide a cash cow for corporations while taxpayers pay the higher cost unless governments find the political will to resist the corporate pressure.
But the Harper Conservatives (and the Liberals before them) view government as promoter of private investment, not deliverer of services.
Privatization and lack of transparency put democracy and public services at great risk. Paired with evidence of P3 failures in terms of compromised quality and cost overruns, our governments should be heeding the warning signs.
What do we want?
PPP Canada Inc. should be turned into a Public Assets Management and Infrastructure Investment office. It should support local communities to retain control of projects through the provision of low-cost loans and grants. Dedicated infrastructure funding, long terms secure bonds that will attract pension funds to invest, and a program to support Public-Public Partnerships could be administered by this office.
What’s next?
Email or call your Member of Parliament and talk to them about your concerns.
To find your MP: www.parl.gc.ca
and enter your postal code.
Send a copy to Minister of Transport, Infrastructure and Communities,
John Baird: bairj@parl.gc.ca