Another look at Toronto budgetCarlo Fanelli, “An Incomplete Victory or

the Beginning of the End for Ford Nation?” See chart for services “saved” and “cut” Plus a general discussion of the local

political context and fiscal situation.

Transit City, back in the news “TTC head favours surface LRT on suburban

stretch of Eglinton” - TTC chair Karen Stintz

“Mayor Rob Ford had no authority to cancel Transit City, lawyers say”

“Rob Ford: ‘I did what the taxpayers want’”

The Ontario Government and P3s

Week 4

“The Top 100 Projects of 2012” by Mira Shenker “New to the list this year, the

Communications Security Establishment Canada (CSEC) is responsible for the collection of electronic intelligence to support the defence and foreign policy of the Canadian government, as well as the protection of electronic information and communication.”

“The Top 100 Projects of 2012” by Mira Shenker “The new facility for CSEC (number 35 on the

Top 100), a federal project, is being developed using a P3 model, as is the new RCMP E Division Headquarters project (number 32). The new facility will act as the hub for the collection of electronic intelligence by the Canadian government.”

“The Top 100 Projects of 2012” by Mira Shenker “As such, building security is paramount for ensuring the CSEC

can successfully fulfill its role. The use of private contractors for running many of the facilities [sic] operations after construction marks the first time that operations and maintenance work will be handled by a private company within a high-security federal facility. The use of private contractors for this project has prompted some CSEC personnel to voice their concerns publicly.”

“Concerns have mostly been around allowing staff from private companies into high-security sections of the facility. CSEC employees worry that allowing employees from private companies into secure rooms represents a security risk because these people will not have taken the same oaths as CSEC’s full members.”

“The Top 100 Projects of 2012” by Mira Shenker “The project highlights a trend already prevalent in

Ontario: the use of public-private partnerships (P3s) to fund high-security projects. In Ontario, every new courthouse is being constructed through a P3 model, usually a design-build-finance-maintain contract. Five of these justice P3s are currently featured on the Top 100. Together, the projects represent $1.8 billion in federal infrastructure spending. In Ontario, secure facilities have a total contract value of $1.6 billion.”

http://top100projects.ca/map/

The map is sortable by Sector Province Funding (public, private, P3)

25 of the top 100 are P3s (12 in health care, 7 public buildings, 5 transportation, 1 transit)

[7 more are listed as public/private]

Ontario and P3s

The Bob Rae led, NDP government (1990-95) used a P3 to build Highway 407.

The Mike Harris, PC government (1995-2002) privatized Highway 407.

Under Harris, “P3s began to assume a much higher profile than they had done in the past” (Loxley, 2011: 43).

Office of Privatization, created 1996. Created Ontario Superbuild Corporation to develop

infrastructure through P3s.

Ontario and P3s

The PC government leased the Bruce Power nuclear facility to the private sector.

And they launched the development of P3 hospitals in Brampton and Ottawa.

In the lead up to and during the 2003 election, Liberal leader Dalton McGuinty expressed opposition to the use of P3s in the health sector.

McGuinty and P3s in 2003

“We believe in public ownership and public financing. I will take these hospitals and bring them inside the public sector” --Dalton McGuinty, May 28, 2003

“I’m calling on Mr. Eves to halt any contract signings when it comes to P3s. I stand against the Americanization of our hospitals.”--Dalton McGuinty, September 26, 2003

“Shortly after the government was elected, it announced that the projects in Brampton and Ottawa would proceed” (Block, 2008: 2).

Ontario: From P3s to AFPs

The McGuinty government introduced what it called “alternative financing and procurement” for public infrastructure.

“Its position is that AFPs are not P3s because they will remain publicly owned and controlled. However, AFPs still look very much like P3s because they will be privately financed, and some will be bundled with lengthy complex service agreements” (Block, 2008: 2).

Infrastructure Ontario, created 2005“What we Do”Infrastructure Ontario plays a key role in the Province of Ontario’s long-

term infrastructure plan to repair, rebuild and renew the Province’s roads and highways, bridges, public transit, schools and post secondary institutions, hospitals and courthouses in communities across Ontario.

On behalf of the Province of Ontario, Infrastructure Ontario procures and delivers large, complex projects using the Province’s alternative financing and procurement (AFP) method – a public-private partnership delivery method -- as well as other delivery models to deliver special projects and small projects.

Infrastructure Ontario partners with public sector agencies, including provincial ministries, Crown corporations, municipalities and not-for-profit organizations to renew infrastructure across Ontario. Projects delivered by Infrastructure Ontario are guided by five key principles: transparency, accountability, value for money, public ownership and public control, and public interest are paramount.

Infrastructure Ontario

“Since 2006, the AFP program has brought more than $23 billion in capital projects to market, including such projects as the North Bay Regional Healthcare Centre, Sunnybrook Health Sciences Centre, Roy McMurtry Youth Centre, and the Durham Consolidated Courthouse.”

Loxley: “P3s remain controversial in Ontario over issues of transparency, accountability and value for money” (2011: 45).

Brampton Civic Hospital(William Osler Health System) In 2003 a P3 agreement reached to provide a new

608-bed hospital in Brampton. A private consortium would finance, design, and

build the facility. They would also provide certain non-clinical services (such as laundry, cleaning, food, security, maintaining and servicing the facility) for 25 years.

The consortium would receive a monthly payment in return over the 25 year period.

The hospital opened in October 2007 with 479 beds in service.

Office of the Auditor General of OntarioOn Brampton Civic Hospital P3

2008 Annual Report Chapter 3, Section 3.03 looks at this P3. 2010 Annual Report Chapter 4, Section 4.03 provided an update.

Ontario Auditor General, 2008 Before the government decided to support a P3

option, “the costs and benefits of alternative procurement approaches, including traditional procurement, were not adequately assessed” (104).

The health centre itself was directed to compare costs, but “the assessment was not based on a full analysis of all relevant factors and was done too late to allow any significant changes or improvements to be made to the procurement process” (104).

Ontario Auditor General, 2008 “Had the province financed the design and

construction costs at its lower rate, the savings would be approximately $200 million over the term of the project’s P3 arrangement” (105).

Ontario Auditor General, 2008 Total consulting fees (legal, technical,

financial and other) related to project were $34 million.

“About $28 million of these costs related to the work associated with the new P3 approach” (105).

Ontario Auditor General, 2010 “the all-in cost could well have been lower

had the hospital and the related non-clinical services been procured under the traditional procurement approach” (306).

Cost of traditional methods were “significantly overstated” (307).

Government’s cost of borrowing was lower than that of the consortium, but that was not included in the comparison.

Research Essay

Due Date: Section C (Wednesdays): March 14 Section B (Mondays): March 19

Assignment has been posted to course website.