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  • Imagine a Winnipeg...2018 Alternative Municipal Budget June 18, 2018
    Climate change; stagnant global economic growth; political polarization; growing inequality.  Our city finds itself dealing with all these issues, and more at once. The 2018 Alternative Municipal Budget (AMB) is a community response that shows how the city can deal with all these issues and balance the budget.
    Canadian Centre for Policy Alternatives
  • Why would a boom town need charity? Inequities in Saskatchewan’s oil boom and bust May 23, 2018
    When we think of a “boomtown,” we often imagine a formerly sleepy rural town suddenly awash in wealth and economic expansion. It might surprise some to learn that for many municipalities in oil-producing regions in Saskatchewan, the costs of servicing the oil boom can outweigh the benefits. A Prairie Patchwork: Reliance on Oil Industry Philanthropy […]
    Canadian Centre for Policy Alternatives
  • CCPA's National Office has moved! May 11, 2018
      The week of May 1st, the Canadian Centre for Policy Alternatives' National Office moved to 141 Laurier Ave W, Suite 1000, Ottawa ON, K1P 5J2. Please note that our phone, fax and general e-mail will remain the same: Telephone: 613-563-1341 | Fax: 613-233-1458 | Email: ccpa@policyalternatives.ca  
    Canadian Centre for Policy Alternatives
  • What are Canada’s energy options in a carbon-constrained world? May 1, 2018
    Canada faces some very difficult choices in maintaining energy security while meeting emissions reduction targets.  A new study by veteran earth scientist David Hughes—published through the Corporate Mapping Project, the Canadian Centre for Policy Alternatives and the Parkland Institute—is a comprehensive assessment of Canada’s energy systems in light of the need to maintain energy security and […]
    Canadian Centre for Policy Alternatives
  • The 2018 Living Wage for Metro Vancouver April 25, 2018
    The cost of raising a family in British Columbia increased slightly from 2017 to 2018. A $20.91 hourly wage is needed to cover the costs of raising a family in Metro Vancouver, up from $20.61 per hour in 2017 due to soaring housing costs. This is the hourly wage that two working parents with two young children […]
    Canadian Centre for Policy Alternatives
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The Progressive Economics Forum

P3 or No Federal Funding: A Third Option for Regina Wastewater?

The Queen City’s water debate has boiled over since I last blogged about it. City Council decided to build a new wastewater-treatment facility as a public-private partnership (P3), but a group of concerned citizens gathered 24,000 signatures to force a referendum on whether to “publicly finance, operate and maintain the new wastewater treatment plant for Regina.”

There has been much debate about the City’s anti-democratic tactics as well as the substance of the P3 proposal. The City Clerk overstepped Saskatchewan’s Cities Act in a desperate attempt to invalidate the petition. Since Council conceded that it would hold a referendum, the City has been pouring resources into the (pro-P3) “No” campaign.

Both sides of the debate seem to have accepted the premise that federal funding is tied to the project being a P3. The “No” campaign contends that rejecting the P3 means rejecting up to $58.5 million (a quarter of project costs) from the P3 Canada Fund.

The “Yes” campaign has argued that public financing, operation and maintenance is a better deal even without federal support. In Thursday’s Leader-Post, the Old Man noted that the promised P3 Canada Fund grant would not even offset the profit and higher interest charges incurred by the private partner.

Interestingly, Finance Minister Jim Flaherty’s recent Leader-Post commentary did not state that the P3 Canada Fund is the only federal money available. He indicated that the City chose the P3 option and then applied to P3 Canada. That begs the question of why the City couldn’t decide against the P3 option and then apply to a different federal infrastructure fund.

As I point out in the current edition of Prairie Dog magazine, the 2013 federal budget unveiled a new Building Canada Fund, which does not strictly require P3s, the month after City Council chose the P3 option.

The classic Big Lebowski line, “New shit has come to light!,” seems appropriate to a debate about sewage. So, did City Council revisit its decision in light of this new shit?

The Mayor tells Prairie Dog, “That doesn’t come into play until the current Building Canada Fund is finished and that doesn’t happen until at least 2014. So we’re looking well into the future.”

It’s not true that we have to wait for the existing Building Canada Fund to deplete. Already-committed money will continue flowing from it for years after the new Building Canada Fund becomes available in 2014. (See the “Existing program funding” line in Table 3.3.1 of the federal budget.)

The 2014-15 fiscal year is only seven months away. It’s not clear that Regina would get P3 Canada money any sooner than that, since Ottawa will not write the cheque until after construction starts.

In any case, the timing of the federal contribution is not critical. Borrowed money will cover the project’s upfront costs and be repaid from utility bills over the coming decades. Whether those multi-decade loans are locked in at the City’s AA+ interest rate or at a private partner’s higher interest rate is far more important than whether the federal cheque arrives in 2013, 2014, 2015 or even 2016, when the new plant must be operational.

P3 apologists are trying to characterize a “Yes” vote as turning away federal funding. In fact, voting “Yes” would give the City of Regina a strong democratic mandate to seek federal funding without P3 strings attached, which is entirely possible within Ottawa’s existing fiscal framework.

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Comments

Comment from Thomas Bergbusch
Time: August 28, 2013, 9:14 am

Excellent summary.

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