TORONTO—Canadian public-private partnerships (P3) have generated an economic boost of nearly $12 billion from their current portfolio of projects indicates a report by the Canadian Centre for Economic Analysis (CANCEA).
The CANCEA report commissioned by the Canadian Council for Public-Private Partnerships (CCPPP) quantified the economic impact of infrastructure projects procured via P3s.
CANCEA's research indicated that on time delivery in Canada's $118-billion P3 portfolio can generate an economic boost of up to 10 per cent of a project's total value.
"Further, we aim to add to the conversation around P3s by quantifying — beyond the benefits traditionally outlined — the significant economic value from delivering such assets for public use sooner," it stated in the report.
CANCEA looked at the economic impact of 200 Canadian P3s that "have at least reached 'financial close' since 1993." Four out of five of these projects were provincial/territorial with a majority of the remaining projects being municipal ones.
Of the P3 projects delivered and evaluated by CANCEA, the 30-year cumulative economic benefits for each million dollars invested are between:
• $1.1 million and $4.2 million of economic activity, including "systemic benefits"
• $0.5 million and $1.6 million of private capital investment
• 10 and 37 job years (i.e., full-time equivalents)
• $0.5 million and $1.9 million of additional wages
• $0.4 million and $1.1 million in combined federal/provincial tax revenue.
Mark Romoff, CCPPP president and CEO, stated in a recent P3 Daily Reporter column that CANCEA's research and the recent survey on Canadian attitudes on infrastructure spending and priorities present a new way to understand P3 value.
"It's a new way to understand value for money," he wrote. "It's innovative thinking. It's thinking that makes us reconsider the status quo."
The value of productive infrastructure projects are not just about their size, type and location but also about when they are built, added CANCEA. Of the 200 projects researched, 129 were operational and had data on their procurement and construction periods.
"By this measure, P3s typically take six years on average. When factoring in at least another year or two to get to the procurement stage from inception, we find that the delay avoided by using P3s is somewhere around one-year on average," noted CANCEA.
The economic value of the 200 Canadian P3s "is more than the sum of their parts," explained CANCEA's report. The overall GDP impact is $3.6 per dollar invested. Over the 30 years evaluated, the entire portfolio supports per year, on average:
• $14 billion of economic activity ($4 billion of which is the investment itself)
• $4 billion of private capital investment
115,000 job years
• $5 billion of additional wages
• $4 billion of combined federal/provincial tax revenue.
"P3s are not a panacea, but research does show that for larger, more complex projects, P3s do provide value as advertised," concluded CANCEA.