Harper's Building Canada Fund rules mean local P3 fightbacks, trade disciplines for cities

Brent Patterson
8 years ago

Prime Minister Stephen Harper has announced the rules for the $14 billion, 10 year Building Canada Fund that will take effect on April 1. And if the Harper government has its way, the private sector will have a bigger role in our public infrastructure.

The Globe and Mail reports, "(Municipalities) learned that any project worth more than $100-million must be approved by a Crown corporation called P3 Canada, which will make binding decisions on whether the infrastructure must be a public-private partnership." News reports suggest that the $100 million trigger refers to the overall cost of the project, not to the 1/3 to 1/2 of what the federal government could contribute to the project. In other words, even if the federal government contributed $60 million to a $180 million project, the P3 screen would apply.

The news report adds, "The $14-billion Building Canada Fund is part of a larger Building Canada Plan worth $47.5-billion over 10 years. That amount includes a $32-billion community improvement fund... The larger plan also includes a $1.2-billion P3 Canada Fund for public-private partnerships."

Yesterday, Harper stated, " (P3s are) an excellent additional tool to allow taxpayers to share risk and thus help get projects completed on time and on budget. We need to see more private sector innovation and we need to see it better utilized in developing modern infrastructure."

What public infrastructure projects will be subject to P3-ization?

The Harper government's priority list for this fund includes drinking water and wastewater management, green energy, public transit, disaster-mitigating infrastructure, airports and post-secondary infrastructure that supports advanced research. Among the specific projects being reported: a $660 million subway expansion in Toronto, a $5 billion LRT line in Calgary (and specifically $185 million for bus-only lanes), a $355-million project to reduce raw sewage dumped in the Ottawa River. Council of Canadians water campaigner Emma Lui has written, "On page 164, Budget 2014 highlights the $58.5 million allocated for a new wastewater plant in Regina, Saskatchewan, the $22.9 million for a biosolids treatment facility in Hamilton, Ontario, and the $57.3 million for a new water treatment plant in Saint John, New Brunswick."

The Calgary Herald notes, "(Calgary mayor Naheed) Nenshi said the program has problems and called on federal Infrastructure Minister Denis Lebel to meet with the country’s big city mayors in Ottawa at the end of February to work through them."

It would appear though that at least some mayors are not concerned about the P3 requirement per se, but rather the costs and time-delays that could be involved in the 6 to 18 month process related to the screen.

But they should be concerned.

Lui has highlighted, "A study of 28 P3 projects in Ontario worth more than $7-billion found that public-private partnerships cost an average of 16 per cent more than conventional tendered contracts. Allocating funding for water services under P3s entrenches water governance within a market framework that favours profit over human rights, environmental protection, social justice and public health."

And Council of Canadians chairperson Maude Barlow has warned of the implications that could arise under the Canada-European Union 'free trade' agreement. "Cash-strapped municipalities can only access federal funds if they adopt a public-private partnership model, and several cities have recently put their water or wastewater services contracts up for private bids. If Suez or Veolia are successful in bidding for these contracts (and under the new deal, local governments cannot favour local bidders) and a future city council decides it wants to move back to a public system, as municipalities are doing all over the world, these corporations will be able to sue for huge compensation."

Further reading
How Federal Budget 2014 measures up on water
Harper's Building Canada Fund promotes P3s