Public‒private partnerships (P3s) are financing arrangements that increase private sector involvement in public service delivery, and transfer some risk and reward to the private sector. P3s for infrastructure financing range from minimal involvement, such as providing garbage collection services, to more comprehensive involvement in building and operating a facility.
Any municipal infrastructure type, e.g. transportation including public transit, community energy, waste management, water and wastewater, etc.
- Private sector can provide more value for money, achieve more efficiencies, and benefits may outweigh risk-adjusted costs.
- Appropriate risks can be readily transferred to the private partner.
Barriers and challenges
- Public and political opposition.
- Each specific P3 model transfers various risks and rewards. Depending on the complexity of the arrangement, municipal expertise may need to be supplemented by outside expertise to ensure proper valuations.
- P3s may be seen as "silver bullets" that can solve infrastructure problems in a single step.
- There are significant transaction costs in terms of consultants and legal resources for a P3 project.
Resources and notes
- Infrastructure Financing
- Public Private Partnerships: Case Studies
- Public-Private Partnerships in Canada provides a list of federal and provincial bodies that support P3 project development.
- The Canadian Council for Public-Private Partnerships maintains a database of all P3 projects throughout Canada.
- Public Private Partnerships: A Guidebook for Municipalities.
- York Region's Viva bus rapid transit system was designed and built in partnership with the York Consortium. The municipality sets fares and service levels, owns all the assets, and controls revenue and funding. The consortium provides staffing and procurement support, assumes risk on all approved budgets and schedules, and assists the region in funding and financing.
- Toromont Energy, a private-sector firm, acquired the rights to the waste gas from the Waterloo, ON landfill site in 1999. The firm operates a power plant that uses landfill gas and exports the electricity generated into the Ontario hydro grid system. Royalties to the region are estimated at $100,000 per year.
- In Sooke, BC, the district and EPCOR partnered in early 2006 to construct and operate a $22.9 million secondary wastewater treatment and collection system. The district maintains ownership, while EPCOR built, operates and maintains the systems.
- Winnipeg, MB, entered into an arrangement with the province and DBF2 Limited Partnership to design, build, finance and maintain the roadway and structure of the Chief Peguis Trail Expansion Project.