Canadians have had limited experience in public-private partnerships over the years and while one government can launch a public-private project it only takes the next government to destroy the value achieved. The two projects (other than the Canadian Pacific Railway) that immediately came to mind listening to Finance Minister Bill Morneau’s elite panel report last week were SkyDome in Toronto and the Electronic Toll Route Highway 407 around Toronto. These projects offer both the positive and the negatives of public-private endeavours.
SkyDome (where Baseball’s Blue Jays play) was a private sector initiative that caught the imagination of the public. While the Ontario government took much of the credit for its creation, it soon sold off the facility to the private sector at a substantial capital loss.
Conversely, the 407 Toll Route was a government initiative to fund a major capital project for the province. Here again, it was sold off to a Spanish consortium with the first change of government.
Having been chair of the federal government’s Business Ventures Project that studied public-private partnerships back in the mid 1980s, it is hard to say whether we should share the credit or the embarrassment. And since the chair’s job was an unpaid position, we had mixed emotions when the Mulroney Conservatives buried the report.
Today high-flying, jargon-using consulting companies such as McKinsey & Company are making astronomical fees for showing governments the value in using public-private partnerships to achieve societal objectives. Just the other day we saw the global managing partner of McKinsey & Co. standing with Finance Minister Bill Morneau promoting the obvious.
But the serious problem with public-private partnerships is the lack of staying power of the public representatives. No doubt that Morneau is serious in supporting the approach McKinsey is promoting but he has problems with his own cabinet let alone the opposition critics in parliament.
One of the key strategies involved is large increases in immigration in this approach to Canada’s future growth. Without substantial increases in immigration, there is no way Canada would have the economic growth and labour force needed for massive infrastructure projects.
Even a major money earner for private sector partners such as electrified, high-speed rail lines would require more than doubling currently planned immigration levels. Right-wing Liberal Immigration Minister John McCallum might have done a good job on the Syrian file last year but he will dig in his heels at anything that looks like a continued high level of immigration.
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Copyright 2016 © Peter Lowry
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