The Honourable Amarjeet Sohi, Minister of Infrastructure and Communities, to the P3 Global Hub Presented by the Canadian Council of Public-Private Partnerships
Speech
Address by
The Honourable Amarjeet Sohi,
Minister of Infrastructure
and Communities
April 19, 2016
(CHECK AGAINST DELIVERY)
Introduction
Hello everyone. I am delighted to be here. It is such an honour for me to be at the second annual P3 Hub event. I'm here to discuss Budget 2016 and touch on our government's role in supporting the use of public-private partnerships for upcoming projects.
But first, I'd like to shine the spotlight on you. The Canadian Council for Public-Private Partnerships exists, in part, to educate stakeholders and the community on the economic and social benefits of public-private partnerships.
And today's event provides you with the opportunity to meet with public officials and key industry stakeholders and talk about latest issues and what's to come in terms of future opportunities in Canada and beyond. I know yesterday many of you had the chance to speak with my Deputy Minister, Jean-François Tremblay. And today you will be hearing from a number of speakers and panelists on a range of subjects related to P3s and their benefits in Canada.
In this room we have leaders from across the sector – and I want to take a quick moment to thank you. Thank you for the infrastructure you build, the jobs you create, and the innovation and creativity you bring to infrastructure delivery.
As you can imagine, it has been quite an adventure since I was elected as Member of Parliament and named the Minister of Infrastructure and Communities last fall.
And with the tabling of Budget 2016, it is an exciting moment to talk to you about how we hope to work together to deliver major new infrastructure investments.
Tuesday, March 22 was an incredible day for me. To be with the Prime Minister and the Minister of Finance in the House to present the federal Budget was a great moment. With Budget 2016, we delivered on the promise we made to Canadians: a promise to invest in our future, and to support our struggling middle class and those working hard to join it.
Budget 2016 is about Canadians and it is about positioning our country's future. It's about seniors, children, students, and Indigenous Peoples. It's about supporting the most vulnerable and making sure that every Canadian has an opportunity to succeed.
It offers immediate help to those who need it most, and lays the groundwork for sustained, inclusive economic growth that will create good jobs and prosperity for all Canadians.
It is one of the most progressive budgets in a long, long time.
Before I tell you a little more about some of the Budget measures that I am particularly proud of, let me talk about our fiscal plan.
Canada is in a relatively strong fiscal position. We have the capacity and the willingness to act to create long term growth and prosperity.
We have the lowest debt-to-GDP ratio of all G-7 countries, giving us the opportunity to make strategic investments now that will help grow the economy .
Interest rates remain at historic lows, making now the ideal time to invest. And our highly educated workforce and our low business costs mean that Canada is well-positioned to compete globally.
But the economic challenges our country is facing today can't be solved with short-term thinking and opportunities can't be realized without smart, sustained investments.
This is why we are investing in Canadians, in our middle class, in jobs and in growth.
Investing in Infrastructure
As many of you know, infrastructure is the backbone of our economy and our society.
Well-planned infrastructure generates economic growth, support communities and leave a lasting legacy for Canadians. And as the Minister of Infrastructure and Communities, I am very proud of the plan we have put forward in Budget 2016. Budget 2016 includes historic new investments in infrastructure totalling more than $120 billion over the next decade. This includes $60 billion in new money – for public transit, green and social infrastructure.
Budget 2016 will invest more than $10 billion in the next two years in the infrastructure projects Canadians need most: modern and reliable public transit, water and wastewater systems, affordable housing, post-secondary infrastructure and more. This is in addition to the previously planned investments under the Building Canada Plan and the Gas Tax Fund.
To invest immediately while laying the foundation for our long term plan for sustained growth, our infrastructure plan is designed in two phases.
Phase 1 – which is presented in Budget 2016 – will have a strong focus on recapitalization and repair of existing assets to lay the foundation for the long-term investments of Phase 2.
Phase 1 investments will help deal with the infrastructure deficit our cities and provinces have been facing for decades. This will allow us to invest in projects that are not only shovel-ready, but also shovel-worthy. In Phase 1, there is new and important funding for data collection, asset management, and planning and design work – which will enable municipalities and communities to plan ahead and be ready to build some of the longer-term projects in Phase 2.
And for those who worry that Phase 2 will be a ways off, Budget 2016 commits the government to delivering the long-term plan within the next 12 months.
And we plan to do so in consultation with those in this room and other key stakeholders. Details of our phase 2 engagement strategy will be finalized in the coming weeks and we will work with CCPPP to provide an opportunity for folks here to provide their input.
Public Transit
Having moved to Edmonton from India at the age of 18, public transit played a key role in my life – from helping me get around when I was young to providing my livelihood for over 10 years. And as a councillor, I championed Edmonton's largest LRT project – a major P3 as you will all know. So public transit is near and dear to my heart.
Public transit is also a very important focus of Phase 1 of our investments. We truly believe that mobility is key to opportunities for Canadians, as well as to building sustainable communities.
But our transit systems are aging and investments have not kept pace with the rapid development and growth of our cities.
To improve and expand public transit systems across Canada, Budget 2016 proposes to provide up to $3.4 billion over three years for a new Public Transit Infrastructure Fund.
And to make the investments where they are needed the most, this $3.4 billion of Phase 1 will be allocated on the basis of ridership numbers. And the federal government will contribute up to 50 percent to ease to financial burden on municipalities and property tax payers and to get projects underway quickly.
Green Infrastructure
Along with public transit, we have also committed to invest in green infrastructure to help build healthier and more sustainable communities.
Green infrastructure also means building communities that are more resilient to the effects of climate change.
An important topic that came up constantly during our consultation with communities is water and wastewater and the urgent need to invest to repair our aging systems.
We also heard that municipalities alone do not have the resources to meet these challenge and they need a reliable and committed partner in Ottawa.
We will be that partner. We will provide $2.0 billion to improve water distribution and treatment infrastructure. Once again we will contribute up to 50 percent of the funding so communities can begin this important work immediately.
Social infrastructure
We can all understand how social infrastructure directly affects lives. Having a decent place to live and to call home is a basic need that unfortunately, even in a wealthy country like Canada, not everyone has access to.
Budget 2016 will provide $3.4 billion for affordable housing, early learning and child care, cultural and recreational infrastructure, and community health care facilities on reserves.
Along with these investments, we will also undertake nation-wide consultations in the coming year to develop a National Housing Strategy so that future federal investments have the greatest possible impact.
Public-Private Partnerships
Since becoming Minister of Infrastructure and Communities, I have assumed the responsibility for some truly transformative infrastructure projects – the new Champlain Bridge, the Gordie Howe International Bridge, and the Toronto Waterfront. And, as was announced in the Budget, I have also recently assumed responsibility for PPP Canada.
By transferring oversight of the Crown Corporation from the Minister of Finance to my office, the Government of Canada is ensuring that our infrastructure programs and policies are well-aligned and positioned to best support infrastructure innovation.
Let me give you one example. A P3 project funded under PPP Canada has a maximum federal contribution of 25%, whereas the same project under infrastructure Canada would have been eligible for 33%. So this lack of alignment of these programs actually created a deterrent to working with the Crown Corporation.
Now let me talk briefly about our decision to remove the mandatory P3 screen. There has been some discussion in infrastructure circles and the media that this campaign commitment to remove the P3 screen indicated a lack of support for P3s in general. And I am here today in part because I wanted to reassure folks that this is not the case.
As I mentioned, as a councillor in Edmonton I worked with PPP Canada to help us design and build our new LRT line. We saw the benefits of transferring the design and construction innovation – as well as the risk – that came from our partnership with the private sector. But our City Council struggled to transfer to operation of our transit system which we had effectively managed for a century.
We also believe in local autonomy. We believe that provinces, territories, and municipalities who own the projects we support should make their own procurement decisions. Removing the mandatory P3 screen respects their ability to make their own decisions on how to best meet their infrastructure needs.
Our government believes that for certain projects, P3s are the right method to build the infrastructure we need. Not all projects are well suited, but many are, including a couple that I oversee.
In my portfolio, there are two major bridge projects being delivered through P3 arrangements – the new Champlain Bridge, and the Gordie Howe International Bridge.
The new Champlain Bridge will open to traffic December 1st, 2018. It will provide a new span across the St. Lawrence, with an integrated two-lane corridor for public transit.
It is one of the largest projects currently underway in North America, and it is proceeding at an impressive pace. It will meet strict timelines that will ensure the continued safety of commuters, and the important flow of goods across this main transportation corridor. An estimated 50 million vehicles and $20 billion in trade flows over the existing Champlain Bridge every year.
The Gordie Howe International Bridge, which will span the Detroit River, is also being delivered through a P3 arrangement. Windsor-Detroit is another key trade corridor, and is the busiest commercial land border crossing along the Canada-US border and one of the busiest in North America. More than one-quarter of all trade between our countries relies on the corridor. And as announced in the Budget, we expect to release the RFP for this major project in the very near future.
So P3s will continue to be an important tool for effective delivery of some infrastructure projects. Integrating PPP Canada into our broader infrastructure programs will also ensure that our partners at other orders of government have access to the expertise that the Crown Corporation can provide.
Infrastructure Bank
As some of you know, PM Trudeau has asked me and Minister Morneau to develop a Canadian Infrastructure Bank. This is something we continue to work on as part of our phase 2 conversations.
When we included the Canada Infrastructure Bank in our platform, there were a couple of policy objectives we were trying to reach: to provide lower cost financing for municipalities, to leverage the private sector more effectively, and to address any other gaps in the marketplace. But we are not rushing this – we do not want to duplicate the work others are doing and want to make sure we consult broadly before landing on details.
And we will engage folks in this room on what should and should not be included in the design of this new financing vehicle.
Conclusion
To conclude, Budget 2016 is only the first step of an ambitious plan we have for Canada and for Canadians.
We consulted, we listened and we heard. But it's only the beginning and we will want to hear from you even more in the coming months.
Thank you for having me and I look forward to working and discussing with you in the future.
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