Until fairly recently, social and community benefits in infrastructure were undertaken primarily on an ad-hoc basis as municipalities have historically required developers to implement infrastructure to achieve specific community objectives. Early P3 infrastructure projects included requirements to involve local labour and provide employment and/or apprenticeship opportunities for specific community groups. However, there was not a consistent approach or policy guiding the delivery of social and community benefits.

As infrastructure has become a significant component of the Canadian economy, social policy has formalized to institutionalize the implementation of social objectives through infrastructure delivery. The social principle enshrined in Ontario’s Infrastructure for Jobs and Prosperity Act, 2015 is directed to the improvement of the well-being of a community affected by a project, such as local job creation and training opportunities and the improvement of public space.

Under the more recent federal Investing in Canada initiative, recipients of federal funding for new major public infrastructure projects will be required to take the social and economic impact of their project on the community into consideration and determine how they can encourage inclusive participation. As a result of the federal initiative, integrating a social and community benefits requirement into the procurement of major infrastructure has become a current issue for many provinces and municipalities.

Operationalizing these policy statements into procurement documents and, ultimately, a project agreement is crucial. Soft targets are not sufficient and penalty clauses are unlikely to incentivize the desired behaviour. A one-size-fits-all approach will miss project-specific opportunities. What is needed is a thoughtful regime that is well-coordinated and integrated with the rest of the project agreement’s risk allocation to incentivize private partners to exceed the specified social and community benefit requirements.