This article was first published in Fraser Forum, a Fraser Institute review of public policy in Canada, July/August 2013. It is copyright to the Fraser Institute and authors Charles Lammam and Hugh MacIntyre. The article is republished here with permission, January 2014.

Editor's Note | Introduction | How P3s Work 
Profit and Risk | P3s in Canada | References

P3s in Canada

Most P3s in Canada involve the private partner in operating and/or maintaining the infrastructure after construction is completed. The long-term involvement of the private partner fosters operational efficiency and higher quality outcomes; and independent value-for-money assessments consistently show P3s have the potential to produce benefits over multiple decades. One key reason is that the private partner – again, motivated by profit – has a keen interest in innovatively designing the infrastructure so that it is more cost effective to operate and maintain over time.

Despite the clear benefits of P3s, opponents often attempt to discredit the P3 model by pointing to particular cases where a P3 project had problems. The overall pattern of P3s, however, shows they are superior in terms of predictable costs, delivery time, and operational efficiency.

Some projects are better suited for the P3 model than others. Those most likely to succeed as a P3 have certain characteristics like potential risk-sharing benefits and measurable performance outcomes. And to truly capture the benefits of the P3 model, governments must develop the proper framework and capacity to both engage in and continuously monitor P3 projects.

As long as governments are in the business of infrastructure, P3s are an important option that can help improve the quality and provision of our roads, bridges, and railways.

Figure 1: The Skagit River Bridge collapse, May 23, 2013
Figure 1: The Skagit River Bridge collapse, May 23, 2013

Thankfully, no one was seriously hurt when the Skagit River Bridge collapsed as a result of being struck by an over-height vehicle, see Figure 1. But the incident should remind us of the importance of maintaining existing infrastructure and investing in new projects.

Profit and Risk  Profit and Risk

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