Can Public-Private Partnerships Improve Quality Of Life For Canadians In Rural Areas?
Development and Innovation When building important infrastructure in the Arctic — like roadways, hospitals, and airports — P3s transfer challenges and financial risks to the private sector.
Unique challenges to building Arctic infrastructure
Major infrastructure projects like building roadways and constructing hospitals are a significant feat on their own, requiring several contracts to design, build, and maintain over their life cycle. Conducting these projects in Canada’s northern regions poses a unique set of challenges. From transporting building materials to remote locations and sourcing skilled labour to a shorter building season, and enduring a harsh climate, these complicated large-scale projects post a significant risk to smaller provincial governments. The lack of experience with major infrastructure-building and a limited capacity for risk is the major concern.
Long-term maintenance of important assets
Instead, this risk can be transferred to the private sector through a P3 — a public-private partnership. “The main advantage we see with the P3 model is bundling all the contracts into one,” explains Steve Hobbs, Director of Strategic Planning and Partnerships of The Canadian Council for Public-Private Partnerships. “Having everything from design to building to operations through one contract, you truly are thinking about an asset over its life cycle.”
“It’s an engine for the future economics of living in Nunavut.”
Through P3s, government maintains ownership of the asset while the private sector takes on financial risks by accepting payment only upon completion of the project. “The private sector has taken out money with financial organizations on their own, and if they miss those timelines, it’s actually them that’s losing money on the project,” explains Hobbs.
This is the case with the Stanton Territorial Hospital Renewal Project in Yellowknife. A consortium, Northern Territories Healthcare Solutions, is designing, building, financing, and maintaining the facility — effectively accepting full risk and responsibility and ensuring the public benefits as much as possible, and that the government only pays for the project upon satisfactory completion.
Innovations to permafrost at Iqaluit Airport
By using the private sector, P3s are also great opportunities for innovation. For major renovations at Iqaluit Airport, that meant finding creative solutions to permafrost, which freezes and thaws the ground and potentially causes buildings to shift and depressions to appear in runways. “They’ve actually put in devices to keep the earth frozen in the summertime,” explains John McBride, CEO of P3 Canada. “It remains a solid foundation upon which to build the terminal and the airport.”
Improving the quality of life in Canada’s north
For vulnerable communities in the Northwest Territories and Nunavut, P3s mean an investment in improving the quality of life. “You’re dealing with governments that can’t afford cost overruns and even the cost of time delays that can be compounded due to the shorter building season,” says Hobbs. In the case of the Iqaluit Airport, as John McBride explains, a P3 ensures that Nunavut has a reliable method of transporting not just people but goods into the region, with better, longer runways, new buildings, and a new terminal. “It’s an engine for the future economics of living in Nunavut.”