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Since their overall objective should be to find ways to deliver better services more efficiently to Canadians, and given their remarkable record of success, shouldn't Canada forge ahead with a stronger agenda for more Private-Public Partnerships?
A Canadian Success Story
It's become abundantly clear that bringing private and public resources together leads to creativity and efficiency -- and to far better results than in letting government work by itself. Government working alone is beset by divisive forces and unproductive. All the evidence shows that private-sector cooperation cuts through the red tape and gets the innovation juices flowing -- especially in Canada.
Canada is a world leader in Private-Public Partnerships (PPPs), according to a report by Deloitte released in 2012. Canada was rated top for PPP activity for both the year 2012 and 2013. Provincial governments, led by PPP procurement agencies, have become experienced in driving their PPP programes forward. On March 13, 2014, the Canadian Council for Public-Private Partnerships (CCPPP) released ''10-Year Economic Impact Assessment of Public-Private Partnerships in Canada (2003-2012)."
The study concludes that PPPs are major contributors to Canada's economy, generating $51.2 billion in direct economic output and 290,680 direct full-time equivalent jobs between 2003 and 2012. The study, conducted by InterVISTAS Consulting, Inc. shows that PPPs generated $92.1-billion in economic output between 2003 and 2012 and $9.9-billion in cost savings.
To the federal government's credit, it has taken the PPP framework seriously, going as far as creating a dedicated Crown Corporation in 2009. PPP Canada concentrates exclusively on private-public partnerships and, according to the government's 2013 economic action plan, even manages its own dedicated $1.25B 3P fund. The Government says it hopes to ''improve the delivery of public infrastructure by achieving better value, timeliness and accountability to taxpayers...deliver more PPPs by leveraging incentives, demonstrating success, providing expertise and by promoting PPP best practices and capacity building.''
If PPP Canada is a step in the right direction on the infrastructure front, the Government has come short in utilizing its PPP know-how to fundamentally transform the way it provides services to the people of Canada. If they should even exist, crown assets such as Canada Post or the Royal Canadian Mint could surely benefit from a good hard look at the net benefit of the Government of Canada, even at arm's length, managing them.
The Government has a few successful test cases it can use to model this effort on. Ridley Terminals Inc., a little know west coast coal terminal was, until 2007, just another crown asset financially dependent on the Federal Government to finance its chronic operational deficits. It was an innovative yet simple PPP model that put it back on track.
In a nut shell, an all too comfortable status quo non-performing management was replaced with a private sector management firm, whose remuneration was performance based. Result? Within the first year of putting the new management agreement in place, not only was RTI profitable, it was ready to pay its very first dividend in its 30 plus years of existence. That little coal terminals' revenues, CDN$131 million in 2013, have multiplied five times since 2008.
Private-Public Partnerships provide governments with an opportunity to think outside their parochial political boxes. Since their overall objective should be to find ways to deliver better services more efficiently to Canadians, and given this remarkable record of success, shouldn't Canada forge ahead with a stronger agenda for more PPPs?
Joseph Soares served as a communications issues advisor to the Prime Minister of Canada (2008-2010), as well as a Policy Advisor to the Minister of Transport, Infrastructure and Communities (2006-2008). This article is the first in a three part series on the subject of Public-Private Partnerships in Canada.