P3s & The P3 Canada Fund Michael Mills VP Investments, PPP Canada CNAM 2014 Conference Toronto, Ontario May 20-23, 2014

About PPP Canada The Government of Canada’s centre of P3 expertise A federal Crown corporation Reporting to Parliament through the Minister of Finance Led by an accomplished private sector-based Board of Directors

Our Objectives Deliver P3s that provide greater value to Canadians -- through better timeliness, better accountability, and greater innovation; Ensure that these projects stimulate and expand the Canadian market for P3s; and Provide expert advice and information on P3 best practices and the Canadian P3 market.

Our Core Business Developing & sharing knowledge, tools, and best practices - Developing high-quality knowledge products to support a pipeline of consistent P3 procurements in the Canadian market; Advancing federal P3s - $100 million Federal Screen, Procurement options analyses and procurement; and Advancing provincial, territorial, municipal, and First Nations P3s - the P3 Canada Fund, the New Building Canada Fund P3 Screen, Tool and resource development; and P3 education and awareness.

Definition of a P3? A long-term performance-based approach for procuring public infrastructure where: The private sector assumes much of the risk and financing responsibility for the delivery and performance an asset Spans design and structural planning to long- term maintenance.

Features of a P3 Integration of roles (Design, Build, Finance, Operate, Maintain) A long-term contract duration The provision of goods or services to meet a defined output specification (the “what” vs. the “how”) A transfer of risk to the private sector anchored with private sector capital at risk Entered into by a competitive process

On-time, on-budget delivery Fiscal planning certainty Benefits of P3s On-time, on-budget delivery Accountability Risk transfer Fiscal planning certainty

Benefits of P3s Focus on outcomes, core business Investment in upfront planning Integration of project components Innovation

Value for Money P3 Value Drivers Allocating risks to the party best able to manage them (i.e. lower project risk) Innovations (i.e. lower capital and operating costs) Higher quality assets and better performance

Value for Money P3 Best Practice Evaluation of different procurement options Examine quantitative and qualitative factors and choose best value Consider whole-of-life costs: design, construction, operation and maintenance costs over the lifecycle of the asset Consider retained and transferred risks

Value for Money 11.8% VfM

Value for Money Why Conduct a VFM Assessment? Screening tool Decision support tool Authorization to proceed as a P3 Disclosure and transparency

Canada is recognized as a Leader in P3s Value for Money Specialized P3 Agencies and Units Open Competition Robust Capital Markets Continuous Learning Projects at every level of government 206 projects initiated since 1991, providing a total project value of over $63 billion 52% of these projects are operational, 26% are under construction and 22% are in the procurement stage (Source: CCPPP database)

Working with the Federal Government Completed or under construction - RCMP E Division - CSEC Accommodation Project In procurement - New Bridge over the St. Lawrence Future Pipeline includes: - Detroit River International Crossing - Shared Services Data Centre  

The P3 Canada Fund $1.2B Fund to support adoption of P3s by Provinces, Territories, Municipalities and First Nations Up to 25% of eligible costs, through repayable contributions, non-repayable contributions, loans and loan guarantees Focused on building experience, innovative applications of the P3 model

The P3 Canada Fund Merit Criteria P3 viability Private sector involvement & risk transfer  DBFOMs Revenue potential P3 market development potential Project readiness Applicant capacity

The P3 Canada Fund Priority Categories Water and wastewater Public transit National Highway System Solid waste management Local roads Regional and local airports

The P3 Canada Fund Eligible Applicants Provinces / territories Municipal or regional governments On-reserve or on-Crown land First Nations Public sector bodies under provincial/territorial statute or wholly owned by a province, territory, or municpality

Chief Peguis Trail Extension Winnipeg, MB $25M non-repayable contribution DBFM $31M in savings over traditional procurement

Evan Thomas Water / Wastewater Kananaskis Country, AB $9.95M non-repayable contribution DBFOM $24.1M in savings over traditional procurement

Downtown Eastside Housing Renewal Project Vancouver, BC $29.1M non-repayable contribution DBFM $5.2M in savings over traditional procurement

Results from Original $1.2 billion Over $6.0 billion in capital investment – 5:1 leverage 16 jurisdictions employing P3 for first time Mix of small, medium and large projects 15 different municipalities 7 water/wastewater projects 7 public transit projects First rehabilitation project Accelerating momentum – over $1 billion committed in Rounds 3-5

P3s and the New Building Canada Fund All applications to the Building Canada Fund with eligible costs of $100M or more are subject to a new P3 Screen PPP Canada has been mandated to manage the two part P3 Screen in collaboration with Infrastructure Canada

P3s and the Building Canada Fund Suitability Assessment - A screening matrix asks the user to consider 12 questions and enter a score for each question. Procurement Options Analysis - Applied to projects that screen positive for P3 viability

Questions? Contact Me: Michael Mills VP Investments, PPP Canada michael.mills@p3canada.ca