The 2013 P3 Pulse National and Community Opinions on Public-Private Partnerships in Canada
National and Community Opinions on Public-Private Partnerships in Canada THE P3 Pulse 2013 The P3 Pulse National and Community Opinions on Public-Private Partnerships in Canada Executive Summary Nationally, 62% of Canadians are open to public-private partnerships (P3s) to build infrastructure and deliver public services. A majority of Canadians support the use of P3s across key sectors of the economy, notably transit systems, roads, social housing and hospitals. Turning the Lens on Communities Community Project Support for P3s Benefit to Taxpayer of P3s Water Treatment Facility (Moncton) Disraeli Bridges (Winnipeg) Sault Area Hospital (Sault Ste. Marie) Might Not Have Been Possible without P3 73% 69% 69% 66% 65% 61% 63% 64% 70% A majority of Canadians at the national and local level support private sector involvement in public infrastructure and service delivery. At the same time, there is an opportunity to raise public awareness of the merits of the P3 approach and Canada s track record of success. The Canadian Council for Public-Private Partnerships 1
THE P3 Pulse 2013 National and Community Opinions on Public-Private Partnerships in Canada Introduction High quality, modern public infrastructure is key to Canada s economic prosperity and global competitiveness and the quality of life of citizens. In 2013, Canadian governments acknowledged the importance of infrastructure investments in their budgets, and several are developing long-term infrastructure plans. Faced with both infrastructure deficits and fiscal constraints, governments are increasingly using publicprivate partnerships (P3s) to leverage their investments and provide taxpayers with enhanced value for money. A recent independent report commissioned by The Canadian Council for Public-Private Partnerships (CCPPP) showed that P3s have made major contributions to Canada s economy. 1 Based on a review of public-private partnership projects in operation or under construction from 2003-2012, the report highlights the following cumulative economic impacts over the 10 years: 517,430 total full-time equivalent (FTE) jobs, including 290,680 direct FTE jobs $32.2 billion in total income/wages and benefits, including $19 billion in direct income/wages and benefits $48.2 billion in total gross domestic product (GDP), including $25.1 billion in direct GDP $92.1 billion in total economic output, including $51.2 billion in direct economic output $9.9 billion in cost savings $7.5 billion in tax revenue to government Compared to traditional public infrastructure procurement, P3s extend the expertise of the private sector beyond design and construction into the financing and maintenance of projects under a long-term contract. Public-private partnerships capitalize on the respective strengths of both government and the private sector and as a result, Canada now has a strong track record of delivering projects on time, on budget and at less cost. Strong Support for Public-Private Partnerships In the fall of 2013, CCPPP commissioned Nanos Research to conduct national and community-based surveys to assess Canadians attitudes toward using public-private partnerships to build infrastructure and provide public services. As Canada is now considered a world leader in the use of the P3 model, the surveys demonstrate that Canadians stand behind the country s best in class approach. Overall, the Canada-wide poll and community surveys in Winnipeg, Sault Ste. Marie and Moncton found strong support for engaging the private sector to deliver important infrastructure and services in partnership with government. The national survey asked respondents for their opinions on private-sector involvement in government infrastructure and services overall, as well as in a series of specific sectors including transit, roads, social housing, hospitals, water treatment, schools, sewage treatment and electricity. It found that 62 per cent of Canadians support the use of public-private partnerships overall; a majority supported P3s in each of the eight sectors reviewed. The community surveys focused on people s awareness of the use of the P3 model in their local project (Disraeli Bridges, Sault Area Hospital and Greater Moncton Water Treatment Plant), their impressions of the project and the level of support for using the P3 approach. The three surveys showed that although residents awareness of the use of the P3 model was fairly low, there was strong support for the P3 model and its benefits. Moreover, the majority of respondents believed that these infrastructure projects might not have been possible without using the public-private partnership delivery model. The Canadian P3 Market There are currently over 200 P3 projects across Canada. The total value of those projects under construction or in operation exceeds $63 billion. The federal government and six provinces (British Columbia, Alberta, Saskatchewan, Ontario, Québec, and New Brunswick) have dedicated P3 agencies/ offices that are responsible for identifying, evaluating and procuring projects. SaskBuilds, the most recently established 1 10-Year Economic Impact Assessment of Public-Private Partnerships in Canada (2003-2012). InterVISTAS, December 2013. 2 The Canadian CouNCil for Public-Private Partnerships
National and Community Opinions on Public-Private Partnerships in Canada THE P3 Pulse 2013 in 2012, already has one project in procurement and several more ready to come to market. Municipalities are increasingly using P3s in areas such as public transit and water/wastewater. For example, the City of Barrie, Ontario is currently procuring a P3 for a new transit facility, as well as the operation and maintenance of its bus fleet. The diversity of P3 sectors continues to grow and several jurisdictions are looking to extend P3 benefits beyond infrastructure into government service delivery. The national survey results below indicate that the public supports this. These trends demonstrate that Canada s P3 market continues to expand, with new jurisdictions, new sectors and increased participation from a wide range of Canadian and international companies. In the 2013 federal Budget, the government once again strongly endorsed the P3 approach. The $1.25 billion P3 Canada Fund, which contributes up to 25% of the capital cost of qualified P3 projects initiated by provinces, territories, municipalities and First Nations, was renewed. The Fund has been very successful in encouraging the use of P3s across the country and promoting jobs and economic growth. Projects with a capital value in excess of $100 million that are applying for funding under the Building Canada Fund will also be required to go through a P3 screen to determine whether or not the P3 approach is suitable for the project. Canada Emerges as Best in Class Canada s successful P3 track record has established the country as a world leader. With a robust deal flow, consistent and reliable procurement among jurisdictions, strong value for money and a highly competitive bidding pool, Canada is the envy of other countries, and they are increasingly looking to model their own programs after ours. P3 success in Canada also means that Canadian companies can leverage their domestic experience to capture opportunities in the global P3 market. A recent report by the Royal Institution of Chartered Surveyors found that the Canadian PPP market is considered one of the most sophisticated in the world and is heralded as an exemplar of efficiency, with project timelines to financial close much more streamlined than both Australia and the UK. 4 The Conference Board of Canada report pointed out Canada s standardized approaches, stable market, competitive environment, shorter procurement times and effective risk transfer as evidence of its global leadership. 5 A study looking at the track record of Ontario s Alternative Financing and Procurement (AFP) program found 29 of 30 projects that reached substantial completion were below budget and 22 were ahead of schedule. 6 Furthermore, the winning bids in 21 of the projects were lower than the government s budgets set before the Request for Proposals. New Research Points to Benefits of P3 Model Recent studies indicate that Canadian P3s are performing well. The Conference Board of Canada found that public-private partnerships have a strong track record of on-time, on-budget delivery and average cost savings are 13% compared to traditional projects. 2 The Fraser Institute also found that Canadian P3 projects finished on or ahead of schedule and have reduced costs. 3 P3s Resonate with the Public The survey results detailed below show that both at the national and local levels, Canadians strongly support the use of public-private partnerships to deliver infrastructure and services. This is evident across a range of industry sectors as well as in communities with P3 projects. However, respondents were often not aware that their local project was built using the P3 approach. This provides an incentive for governments, businesses and CCPPP to raise the profile of P3s across the country. With a strong track record of success and a reputation as a global leader, there are many Canadian stories about how P3s are providing innovative solutions to complex public needs. 2 Canada as a Global Leader: Delivering Value through Public-Private Partnerships at Home and Abroad. The Conference Board of Canada, August 2013. 3 Using Public-Private Partnerships to Improve Transportation Infrastructure in Canada. Fraser Institute, May 2013. 4 The Global Infrastructure Challenge: The Role of PPP in a New Financial and Economic Paradigm. Royal Institution of Chartered Surveyors, October 2013. 5 Canada as a Global Leader: Delivering Value through Public-Private Partnerships at Home and Abroad. The Conference Board of Canada, August 2013. 6 Alternative Financing and Procurement Project Track Record Review. MNP, August 2013. The Canadian Council for Public-Private Partnerships 3
THE P3 Pulse 2013 National and Community Opinions on Public-Private Partnerships in Canada National Survey Finds Strong Public SuPPort for P3 Approach Canadians across the country support public-private partnerships for the delivery of public infrastructure, with 62% of those surveyed indicating they are open to the private sector partnering with the government to deliver services in areas such as roads, hospitals, schools, public transit and water treatment systems. Support is strongest in Québec (69%) followed by the Prairies and Atlantic Canada. While the majority of public sector union members (57%) endorse the P3 approach, support is slightly higher among non-union members (63%). These results provide decision makers in government and the private sector with assurance that P3s are well supported by Canadians, yet there is still an opportunity to raise the profile of P3s in particular regions with those who are unaware or unsure of their benefits. National and Regional Support 7 Agree / Somewhat Agree 62 % CANADA 69 61 % % 59 65 % % 53 % ATLANTIC QUÉBEC ONTARIO PRAIRIES BRITISH COLUMBIA Public Supports Public-Private Partnerships in Various Sectors A majority of Canadians endorse the use of P3s across key sectors of the economy. Support is highest for transit systems, roads, social housing and hospitals. Results demonstrate that P3s are gaining popularity in new sectors beyond the traditional transportation and health sectors. The majority of those surveyed are also open to extending these partnerships to deliver public services such as issuing ID cards, vehicle registration renewals, or administering programs. This bodes well for governments looking to new areas of alternative service delivery as a way to reduce costs and improve efficiencies. Sector Support Support/ Somewhat Support Support for Public Service Delivery 54 % 70 63 % 65 % 64 % % 59 % 57 % 61 % 56 % ELECTRICITY HOSPITALS ROADS SCHOOLS SEWAGE SOCIAL HOUSING TRANSIT WATER AGREE SOMEWHAT AGREE 7 Readers should exercise caution for regions with smaller sample sizes: Atlantic (120); Québec (300); Ontario (360); Prairies (240); British Columbia (180). 4 The Canadian CouNCil for Public-Private Partnerships
National and Community Opinions on Public-Private Partnerships in Canada THE P3 Pulse 2013 Solid SuPPort for Community P3 Projects Canadians views were also sought on three specific P3 projects in different communities and whether their knowledge of a project influenced their perceptions about the value of using the P3 model. The community results showed even greater support for the P3 approach than at the national level, demonstrating that first-hand experience can make a difference in how residents view publicprivate partnerships. The Three P3 Projects Three public-private partnerships representing a diversity of regions, sectors and operational experience were selected. Disraeli Bridges & Freeway Winnipeg, Manitoba New 2 km, 4-lane freeway, bridge and dedicated pedestrian bridge connecting northeast Winnipeg with downtown Opened March 2013 $47.7 million (17%) cost savings versus the conventional approach Sault Area Hospital Sault Ste. Marie, Ontario New 580,000 sq. ft. acute care hospital Opened March 2011 $101.7 million (18.2%) cost savings versus the conventional approach Greater Moncton Water Treatment Plant Moncton, New Brunswick New water treatment plant serving over 90,000 residents Opened October 1999 $7 million (21%) cost savings versus the conventional approach The Canadian Council for Public-Private Partnerships 5
THE P3 Pulse 2013 National and Community Opinions on Public-Private Partnerships in Canada P3 Projects Valued at the Community Level All three projects received high marks for their perceived value to the community. On a scale of 1 to 10, with 10 being excellent and 1 being very poor, the Sault Area Hospital received a high score of 8.1. Scores were also very positive for the other two projects. Respondents showed a strong similarity in how they felt each project was managed from design through to operation. All three projects were delivered on time and on budget and the views of those surveyed on project management are consistent with each project s performance. When asked about the perceived affordability of the project for taxpayers, views differed somewhat, which may point to the sensitivity of taxpayers to new spending and the competition for public funding for other infrastructure projects. Community Views on Public-Private Partnerships Sault Area Hospital Greater Moncton Water Treatment Plant Disraeli Bridges Project 8.1 7.3 7.4 6.6 6.5 6.4 6.5 6.0 5.6 THE OVERALL VALUE OF THE PROJECT TO THE COMMUNITY HOW WELL THE PROJECT WAS MANAGED FROM THE DESIGN THROUGH TO COMPLETION THE AFFORDABILITY OF THE PROJECT FOR TAXPAYERS Varying Community Awareness about the Use of the P3 Model There was wide variation in levels of awareness about the use of the P3 model in each of the communities. For the Sault Area Hospital, 52% of those surveyed were aware that the project was built as a publicprivate partnership, while 26% were aware the Greater Moncton Water Treatment Plant was a P3 and only 20% knew that the Disraeli Bridges project was built under this arrangement. It is difficult to ascertain what may have caused the differences in awareness levels, but the size of Winnipeg compared to the other communities (i.e. more issues competing for residents attention in a larger city) and the age of the Greater Moncton Water Treatment Project (completed in 1999) may be contributing factors. Community Awareness of the Project as a P3 Yes, I think so / Yes, definitely Disraeli Bridges Project Sault Area Hospital Great Moncton Water Treatment Facility 20 % 26 % 52 % 0 25 50 75 100 6 The Canadian CouNCil for Public-Private Partnerships
National and Community Opinions on Public-Private Partnerships in Canada THE P3 Pulse 2013 Awareness about Use of P3 Model Produces Varied Results A majority of respondents views towards these community projects were unchanged after learning that they were built as P3s. However, one-quarter felt more positively towards the Disraeli Bridges project. The primary reason for those who felt that using a P3 is more positive is the project s cost-effectiveness. Private Sector Involvement Critical to Delivery of Public Infrastructure A large majority of respondents felt that there was a need for private-sector involvement in the three P3 projects. In the case of the Sault Area Hospital Project, 70% of those surveyed agreed that it might not have been possible without the private sector as a partner in the design, construction, financing and maintenance. The results for the Greater Moncton Water Treatment Facility (69%) and the Disraeli Bridges Project (61%) were equally significant. Given current fiscal realities at both the municipal and provincial level, these results support governments use of private expertise and finance to develop infrastructure. Taxpayers Reap Benefits Opinions about the benefits to taxpayers of using the P3 model were consistently positive across the communities. Given the on-time, on-budget performance of each of these projects, residents recognized the financial and social benefits of the projects to them. Strong Support for Use of P3s to Meet Various Community Infrastructure Needs Respondents in the three communities strongly support using P3s for other community projects. This suggests that positive perceptions of local projects can provide support for governments looking to develop future P3s. The open-ended responses provided by respondents below indicate some of the reasons behind their positive views of public-private partnerships. Opinion Change after Awareness that the Project is a P3 Disraeli Bridges Project Sault Area Hospital Great Moncton Water Treatment Facility More positive Unchanged 25 % 58 % 12 % 62 % 14 % 65 % 0 25 50 75 100 Project Might Not Have Been Possible without P3 Agree / Somewhat Agree Disraeli Bridges Project Sault Area Hospital Great Moncton Water Treatment Facility 61 % 70 % 69 % 0 25 50 75 100 Taxpayers Benefit from Use of P3 Agree / Somewhat Agree Disraeli Bridges Project Sault Area Hospital Great Moncton Water Treatment Facility 65 % 64 % 69 % 0 25 50 75 100 Support for P3s in Other Community Projects Support/ Somewhat Support Disraeli Bridges Project Sault Area Hospital Great Moncton Water Treatment Facility 66 % 63 % 73 % 0 25 50 75 100 The Canadian Council for Public-Private Partnerships 7
THE P3 Pulse 2013 National and Community Opinions on Public-Private Partnerships in Canada Residents Articulate Benefits of P3 Approach The three most common reasons given for supporting P3s are that they are cost-effective, they provide many benefits to the city and they enable projects that might not otherwise be built. Other comments from those who supported the P3 approach included: If we didn t have the private sector we wouldn t be able to afford it When you have joint partnership you have more input and participation They will save money in the end With the economic climate it is a more feasible way to go Government money is not always sufficient and private sector funding will help things get built on time They are critical to deliver public infrastructure Conclusion Surveys done at both the national level and within various communities show strong levels of support among Canadians for using public-private partnerships to deliver public infrastructure across sectors of priority to the Canadian economy. Most Canadians are also open to the use of publicprivate partnerships to deliver other types of public services. The findings from the three community surveys show that residents: have a positive view towards the P3 projects in their communities; see the value of partnering with the private sector and its critical role in getting new infrastructure projects off the ground; are open to the P3 model being used to meet other community infrastructure needs; and believe many benefits are derived from this approach. About The Canadian Council for Public- Private Partnerships Established in 1993, CCPPP is a national not-for-profit, nonpartisan, member-based organization with broad representation from across the public and private sectors. Its mission is to promote innovative approaches to infrastructure development and service delivery through public-private partnerships with all levels of government. The Council is a proponent of evidencebased public policy in support of P3s, facilitates the adoption of international best practices, and educates stakeholders and the community on the economic and social benefits of public-private partnerships. The Council organizes an annual conference that is recognized internationally as the premier forum bringing together senior government and business leaders in the P3 community at which the most successful Canadian public-private partnerships are celebrated through CCPPP s National Awards for Innovation and Excellence. At the same time, there is an opportunity to raise public awareness in the community, increase education on the merits of the approach and grow P3 support based on Canada s track record of success. As the next generation of talent moves into the sector, greater understanding and skills related to P3 delivery will also be important to keep Canada at the cutting edge. 8 The Canadian CouNCil for Public-Private Partnerships
National and Community Opinions on Public-Private Partnerships in Canada THE P3 Pulse 2013 Appendix A National P3 Survey Methodology and Questionnaire The Canadian Council for Public-Private Partnerships (CCPPP) retained Nanos Research to measure and track Canadians views on public-private partnerships and gain further insights into their awareness and understanding of public-private partnerships. A survey with a random sample of 1,200 Canadians 18 years of age and older was conducted by Nanos Research between September 21 and 26, 2013. The margin of error for a sample of 1,200 randomly selected respondents is 2.8 percentage points, plus or minus, 19 times out of 20. Percentages may not add up to 100 due to rounding. Participants were randomly recruited by telephone (land- and cell-lines) and administered a survey online. The results were statistically checked and weighted using the latest Census data. Validation and testing of key demographic cohorts indicate that the sample profiles were representative of the populations within acceptable margins of statistical accuracy. This research project was completed in accordance with the standards of and registered with the Marketing Research and Intelligence Association of which Nanos is a Corporate Gold Seal Member. National Opinion Survey Questionnaire Question 1: When you hear the phrase public-private partnership in the context of government services and infrastructure, do you have a favourable, somewhat favourable, somewhat unfavourable or unfavourable impression? Question 2: Why do you have that impression? [open-ended] For each of the following, please tell me whether you think the private sector can do a very good, good, average, poor, or very poor job. [READ AND ROTATE] Question 3: Projects done on time Question 4: Projects completed within budget Question 5: As you may know, there is regular need for new or improved roads, hospitals, schools, public transit systems, safe water systems, and so on. Please tell me if you agree, somewhat agree, somewhat disagree or disagree with the following statement: I am open to the private sector delivering these types of services in partnership with government. Question 6: In Canada, some governments have created public-private partnerships to construct new public buildings and infrastructure. They remain government-owned but there is an arrangement for a private partner to design, build, finance, and in some cases, maintain these new public facilities. Would you support, somewhat support, somewhat oppose or oppose possible public-private partnerships in the following areas: Hospitals Transit systems Roads Schools Water treatment facilities Electricity Water sewage facilities Social housing The Canadian Council for Public-Private Partnerships 9
THE P3 Pulse 2013 National and Community Opinions on Public-Private Partnerships in Canada Question 7: Some people have suggested that public-private partnerships might also be used to deliver a range of public services rather than just buildings and infrastructure. These services could include issuing ID cards, vehicle registration renewals or administering government programs, such as student assistance programs. Please tell me if you agree, somewhat agree, somewhat disagree or disagree with the following statement. I am open to the private sector partnering with government to administer these types of public services. Question 8: Are you a member of a private or public sector union? Yes, a member of a private sector union Yes, a member of a public sector union No 10 The Canadian CouNCil for Public-Private Partnerships
National and Community Opinions on Public-Private Partnerships in Canada THE P3 Pulse 2013 Appendix B Community Level Surveys Methodology and Questionnaire Community Survey on the Sault Area Hospital A random telephone survey of residents of Sault Saint Marie was conducted between September 10 and 11, 2013. The results were statistically checked and weighted using the latest Census data. The margin of error for a random survey of 300 respondents is ±5.7 percentage points, 19 times out of 20. Question 1: Question 2: Question 3: Question 4: Question 5: Question 6: Question 7: How would you rate your overall awareness of the Sault Area Hospital? How would you rate the project in terms of each of the following attributes? Please use a scale of 1 to 10 where 1 is very poor and 10 is excellent The overall value of the project to the community How well the project was managed from design through completion. The affordability of the project for taxpayers In Canada, some governments have created public-private partnerships to construct new public buildings and infrastructure. They remain government owned but there is an arrangement for a private partner to design, build, finance and in some cases maintain these new public facilities. Are you aware that the Sault Area Hospital was built using a public-private partnership? Does knowing that the Sault Area Hospital was built using a public-private partnership make you more positive, less positive about the project or is your opinion of the project unaffected? Why do you feel this way? To what extent do you agree or disagree with the following statements? Question 8: Question 9: The Sault Area Hospital might not have been possible without the private sector as a partner in the design, building and financing of it. Taxpayers benefited from using a public-private partnership to build the Sault Area Hospital. Question 10: Do you support, somewhat support, somewhat oppose, or oppose using public-private partnerships for projects such as this one? Question 11: Why do you feel this way? Community Survey on the Greater Moncton Water Facility A random telephone survey of residents of Moncton was conducted between September 28 and October 1, 2013. The results were statistically checked and weighted using the latest Census data. The margin of error for a random survey of 303 respondents is ±5.7 percentage points, 19 times out of 20. Questions are identical to those used in the Sault Area Hospital survey. The Canadian Council for Public-Private Partnerships 11
THE P3 Pulse 2013 National and Community Opinions on Public-Private Partnerships in Canada Community Survey on the Disraeli Bridges Project A random telephone survey of residents of Winnipeg was conducted between September 29 and October 2, 2013. The results were statistically checked and weighted using the latest Census data. The margin of error for a random survey of 303 respondents is ±5.7 percentage points, 19 times out of 20. Questions are identical to those used in the Sault Area Hospital survey. Complete data from the 2013 national and community surveys are available on the CCPPP website at: www.pppcouncil.ca/p3pulse 12 The Canadian CouNCil for Public-Private Partnerships
Extra copies of this publication may be ordered by contacting The Canadian Council for Public-Private Partnerships (416) 861-0500 partners@pppcouncil.ca www.pppcouncil.ca