Opinion: P3s are an answer to Canada’s infrastructure crunch

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Canadian infrastructure is at a crossroads. The need for substantial investments in bridges, highways, schools and hospitals has never been greater, made more dire by our rapidly growing population and aging infrastructure. But with increasing demands for investments, labour shortages, inflation and growing debt, how can we build and maintain the infrastructure our communities desperately need?

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Traditional public financing and procurement methods have struggled to keep pace with these demands. They are often slow, costly and insufficient for addressing the scale of the issues we face. In addition, traditional models typically do not consider
and account for the whole-life planning of an infrastructure project, including capital and long-term maintenance. Now is the time to redefine how Canada funds, procures and delivers major infrastructure projects, ensuring that assets meet
immediate and long-term needs while offering sustained value to Canadian communities.

For over 30 years, public-private partnerships (P3s) have proven to be a successful approach to delivering infrastructure. P3s are more than just a funding mechanism; they represent a strategic collaboration between the public and private sectors to finance, design, build and maintain public infrastructure. This model combines the best of both worlds: the public sector’s mandate to serve the community, and the private sector’s expertise and efficiency.

One key advantage of P3s is cost-efficiency. Private partners invest their own capital, ensuring they have a vested interest in the project’s success. This leads to efficient management, with projects delivered on time, within budget and with cost savings passed back to taxpayers. Unlike traditional funding models, where the public sector shoulders the entire burden, P3s distribute responsibilities and risks. Each party manages the risks they are best equipped to handle, leading to better overall outcomes.

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Moreover, P3s can accelerate project timelines, addressing urgent infrastructure needs more swiftly. They also often include long-term maintenance and operational responsibilities for the private sector, ensuring infrastructure is well-maintained
over its lifecycle. Additionally, the private sector brings specialized expertise, innovative technologies and progressive management practices, resulting in higher quality and more technologically advanced results.

For example, Concert Infrastructure recently collaborated with Bird Construction, GDI Ainsworth and the Government of Alberta to deliver five new high schools using the P3 model. This project saved taxpayers over $114.5 million and created
1,700 local jobs. As Concert Infrastructure is owned by 10 Canadian union and management pension plans, the funding and development of these schools have also supported the long-term financial future of over 200,000 hard-working Canadians.

But as our society continues to evolve, a clear, consistent and modernized approach to P3s must be established to deliver infrastructure assets at the best value. The Canadian Council for Public-Private Partnerships (CCPPP) recently released a report titled “Modernizing Canada’s Approach to Public-Private Partnerships (P3s)” that offers eight key recommendations for government policymakers and private-sector decision-makers.

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These best practices acknowledge that, while we must continue to do what works, ongoing evolution is necessary to achieve better project outcomes, drive greater value for tax dollars and foster a competitive environment. Private capital must remain a cornerstone of the P3 model. By utilizing private investment, including contributions from Canadian pension funds, we can stretch scarce tax dollars further, ensuring more projects can be funded and completed.

This approach also brings enhanced oversight and accountability. A long-term perspective is also essential. Governments must prioritize infrastructure procurement with a focus on multi-decade maintenance and lifecycle renewal. By planning for the future, we can avoid deterioration and costly overhauls that often plague public assets. This forward-thinking approach will save money and ensure our infrastructure remains functional and reliable for generations to come.

To truly meet the challenges ahead, we must integrate strategic best practices that can enhance the P3 model’s effectiveness now. The CCPPP advocates for earlier engagement with contractors, allowing for better planning, risk management and cost control. Breaking down large projects (exceeding $500 million) into smaller, more manageable phases can also attract greater competition, leading to cost savings for taxpayers.

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Furthermore, governments could adopt a more flexible approach to risk allocation, viewing themselves as “industrial owners” rather than mere contractors, actively overseeing P3 contracts, providing centralized support and minimizing disputes. This shift will enhance transparency and foster a more collaborative environment between the public and private sectors.

Governments should also work together to share best practices and establish new cross-Canada standards.
Ultimately, P3s are a powerful tool for addressing Canada’s infrastructure needs. By governments of all levels embracing the recommendations from the CCPPP, Canada can deliver high-quality, cost-effective projects that meet the needs of today while laying a strong foundation for the generations of tomorrow. Quite simply, everyone wins — especially Canadians — when the public and private sectors work together.

Derron Bain is CEO of Concert Infrastructure and board director, Canadian Council for Public-Private Partnerships.