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This article was published 1/4/2017 (1264 days ago), so information in it may no longer be current.

Opinion

If there is any one thing that has distinguished the first (nearly) full year of Progressive Conservative government in Manitoba, it is that major policy decisions tend to leak out at a glacial pace.

The PC party was careful not to identify too many specific policy goals during the 2016 election campaign. Pledges on fiscal matters, government operations, labour relations and even the future state of core services such as health care and education were all semantically framed in loose language that gives the now-PC government lots of wiggle room.

JOHN WOODS / THE CANADIAN PRESS FILES Manitoba Premier Brian Pallister and his wife Esther celebrate his election victory almost a year ago.

However, one of the fundamental truths about governing is that eventually, all will be revealed — in one way or the other.

Case in point: on May 2, Premier Brian Pallister is scheduled to make a speech on the role of public-private partnerships (P3s) in the province’s infrastructure programs. The address is co-sponsored by the Canadian Council for Public-Private Partnerships and the Winnipeg Chamber of Commerce.

This may seem like a fairly mundane event, but it’s not. If the premier were, in fact, to enunciate his policy on P3s and infrastructure, it would be the first time he has ever elaborated publicly on this subject. To date, although he has demonstrated a mild interest in the idea of bringing in private money to fund infrastructure, Pallister has been somewhat hard to pin down. Still, there have been some tells.

The May 2 speech, delivered at the request of a P3 lobby group, could be taken as evidence of a growing interest in private financing of public infrastructure, as is the decision last fall to repeal the consultation and transparency regulations for municipalities introduced several years ago by the former NDP government. Even without a firm commitment to the use of P3s as a way of stretching infrastructure investments, this legislative decision seems to be a step in that direction.

There are other signs, as well. Health Minister Kelvin Goertzen has expressed an interest in public-private partnerships in health-care delivery, particularly a controversial program in Saskatchewan that allows citizens to purchase private MRI sessions. Education Minister Ian Wishart has similarly admitted he is interested in another Saskatchewan program to build new schools through P3 contracts.

However, what we haven’t had is a clear, unambiguous statement from the premier that P3s will become a core element of the provincial infrastructure program. We might get that from the provincial budget on April 11. But if not, then we can all look forward to the May 2 speech.

The fact is that P3 financing is already a reality. The city, province and federal government have agreed to fund the second phase of Bus Rapid Transit via a P3. And the federal government has promised to create an Infrastructure Bank that will offer local government the chance to finance projects with private money.

It’s not hard to see the initial appeal of P3 financing. Infrastructure demands have never been higher. Low economic growth and deficit financing have governments worried about increasing costs of debt servicing and, long term, credit downgrades that make borrowing more expensive.

Proponents note that a well-run P3 can help address these conditions by transferring the upfront costs of design, construction and even maintenance to private investors, allowing taxpayers to pay off the costs of the project over a an extended period of time. P3s primarily help relieve government of having to add to its debt, a significant concern in these days of structural deficit financing.

Critics claim, and fairly so, that P3s cost taxpayers much more over the long run because the returns paid to private partners are much higher than the interest rates paid by government if it borrowed the money and just built the project. That means taxpayers ultimately have to pay more — sometimes hundreds of millions of dollars more — to get the same result.

What about the quality of the infrastructure produced by P3s? There are many instances of successfully executed P3s where projects were done on time and within budget. These include the Confederation Bridge that links P.E.I. with New Brunswick, and the Canada Line LRT that connects Richmond with the Vancouver airport.

There are also many horror stories of P3 projects that ran off the rails.

The Canadian Centre for Policy Alternatives, one of the foremost critics of P3s, has studied a number of P3 projects in Nova Scotia.

School projects experienced significant cost overruns and construction problems that added hundreds of millions of dollars to the final tab to be covered by taxpayers. Similar problems were found with the construction of toll highways, which resulted in the government of Nova Scotia paying an effective interest rate of 10 per cent over 30 years, several times its normal rate for borrowing.

The Ontario auditor general reported that a P3 hospital in Brampton ended up costing $200 million more than it would have, had the provincial government done the project on its own — and the facility ultimately ended up containing fewer beds than promised.

These worst-case scenario projects beg two important questions: are the failures of these projects evidence of an inherent weakness in the P3 model, or are they just additional examples of poor execution and oversight in the construction of a public amenity?

Winnipeggers know for a fact that eschewing P3s for a more traditional government-run approach to infrastructure does not necessarily guarantee a better outcome. We need look no further than the new Winnipeg Police Service headquarters in downtown Winnipeg for an example of a 100 per cent government-run project that ended up significantly behind schedule, over budget and afflicted with mechanical problems. In other words, government does not need a P3 financing model to screw up a project.

All of this brings us back to the Pallister government and its plans for P3s. It is certainly reasonable for the province to look for any and all ways of financing infrastructure that relieve the debt burden for taxpayers. But a P3 policy cannot just serve the short term; the long-term burden must also be fully explained and justified.

Above all, it’s worrisome to have the Tory government loosening the rules governing P3 projects at the same time — apparently — that it is promoting it as an option for public infrastructure. The decision last fall to repeal regulations that would have required more public consultation, more long-term analysis and a higher degree of overall transparency is completely at odds with the current government’s obvious appetite to engage in P3 financing.

The Tory government should bring in private partners to help pay for infrastructure if it must. But it also should have the decency to embrace a higher standard of transparency. That is the only way we will know whether P3 financing is a net positive or a net negative.

dan.lett@freepress.mb.ca Twitter: @danlett