A recent issue of Novae Res Urbis, a publication dedicated to planning issues in Toronto, included a discussion of Public-Private-Partnerships (P3s), also known as ‘alternate financing and procurement’. Mayor John Tory and the Ontario Liberal Government are strong advocates of P3s, but CUPE has long opposed them. Tim Maguire submitted a response to the article because it failed to provide a balanced view of P3s and their risks. He points out the need to consider risk, accountability and other factors when considering P3s and then suggests a better approach to building public infrastructure: invest in the City’s in-house expertise to build high-quality public infrastructure with minimal risk and maximum accountability. Read the full response below.
Re. Mind the Gap: public private partnerships urged for Toronto (NRU March 18)
Unfortunately the article failed to give full consideration of the problems inherent to P3 development and it did not explore a more sustainable approach to building public infrastructure: invest in the city’s in-house expertise to build high-quality public infrastructure with minimal risk and maximum accountability.
Comprehensive analyses of P3s need to focus on several key criteria: the quality of the service that a P3 could provide compared to what could be delivered publicly; whether there are sufficient mechanisms to hold P3 partners accountable; the risks that taxpayers bear should something go wrong; and the overall cost to the public. The Canadian Union of Public Employees has done comprehensive analyses of P3 financing, which can be found at www.cupe.ca/privatization.
There are a number of significant projects in Toronto’s 2016-2025 capital plan and, as experts often point out, the larger the project, the greater the risk that the city will not be able to ensure high-level oversight and accountability. Past P3 experiences are a warning that we need to take seriously: in 2014, the Auditor General of Ontario reported P3s had cost Ontario taxpayers $8 billion that could have been avoided if properly managed internally.
For example, the mayor and city management anticipate using an alternate funding model—code for P3—to update the Gardiner expressway. However, given the uncertainty council is already creating around re-development of the Gardiner East expressway, we should be skeptical about whether council has the clarity of vision, direction and planning that analysts identify as key to successfully completing P3 projects. Smart Track and other major infrastructure projects have similarly been mired in political shifts and changes of direction which has resulted in additional city expenditures and cost overruns.
Mayor Tory’s preference for alternate financing shows his reluctance to pursue what the city really needs: reliable, sustainable financing. New revenue tools could be used to enhance in-house capacity for physical infrastructure development as well as much-needed investments in social service infrastructure. Managing infrastructure projects in-house allows full responsibility and accountability for public infrastructure to remain where it belongs: with public servants who are ultimately accountable to democratically elected representatives.
Ultimately, Toronto needs a balanced, evidenced-based discussion on P3s and a strong commitment to investing in the city’s physical and social infrastructure management.
— Tim Maguire, CUPE Local 79 President