In Brief: In his fortnightly column, AIMS acting President Charles Cirtwill dispels some of the baseless fears that pop-up whenever the government even suggests partnering with private industry. He notes that so-called P3s allow the government to tackle projects it wouldn’t otherwise be able to contemplate without raising taxes or cutting jobs.

by Charles Cirtwill


Boogie woogie woogie. Opponents of public private partnerships including, interestingly enough, this newspaper, are lining up with their horror stories of candy bars and gym fees, inflated costs and inflexible terms. Public-private partnerships (P3s) are back on the agenda in Nova Scotia, in New Brunswick, in Ottawa and, in fact, just about everywhere else. Truth be told, P3s were around long before we called them P3s, have never really stopped despite all the hype about landlords getting a cut of hamburger sales to 12 year olds, and will be around long after the current crop of story tellers forgets what it was that actually bothered them about P3s in the first place.


Have there been bad P3 deals signed by credulous or ill informed governments? Absolutely. Cost overruns and poorly delivered commitments? Undoubtedly. Can the same or similar things be said about public projects delivered by public workers under the supervision of senior public servants? You bet they can.


But none of this is the point. The reason that governments are looking seriously at expanding P3s is because replacing aging infrastructure will drive massive amounts of government spending in the coming years. Before our bridges start to fall and our hospital roofs collapse, government is going to need to take action. To find that money they will need to increase taxes significantly or make massive cuts in employment levels (salaries after all being if not the largest then certainly one of the largest expenditures of government).


An aside – when unions start worrying about jobs, maybe they should consider the jobs saved by P3s too. If government can replace infrastructure and save costs it does not need to scrimp elsewhere, so researchers don’t get traded for welders (although sometimes that may be a good thing).


Public-private partnerships have also been described – and not with much warmth – as just “leasing” by critics. The implication is that P3s are a somehow nefarious or inappropriate way to hide costs as opposed to a means of managing your resources. Contrary to the fear mongering, any of us who have a leased car or a leased furnace can explain the benefits of that choice.


By leasing as opposed to buying that new hybrid, we can generally cut our monthly payment in half. Leaving us enough money for the monthly payment on the front loading washing machine and the matching high efficiency dryer (and maybe that digital music/video/cell phone/can opener/GPS we have our eye on).


When the temperature drops to 30 below and the furnace is on the fritz, we don’t have to buy half a tank of oil in order to find the $300 for the service call – it’s  free. And when the bottom of the furnace falls out, that bill isn’t ours either.


But what of these wicked spectres being raised by opponents to P3? Let’s just consider what ghosts truly haunt us.

Think of the ghosts of Christmas past – Nova Scotia’s P3 schools and Confederation Bridge. Ask yourself, how big was the spike in school construction that those P3 projects allowed? How much capital was freed up for school maintenance and repair because dollars were now available that would have gone into new buildings? How many kids would be in leaky classrooms today had those P3 schools not been built, or been built at a slower pace?


On your next trip to Anne’s island, perhaps you could wonder about how many PEI fishermen would be selling their fresh fish in Boston if there was no bridge? Or, ask yourself when the fee for crossing via the publicly operated ferry was set to expire anyway? (it wasn’t, and still isn’t)


Then we have the ghosts of Christmas present: the Cobequid Pass and the East Coast Forensic Hospital. Both now delivering important benefits to Nova Scotians, both inexcusably delayed (before we finally decided to give P3 a chance) as we tried to find the fiscal room to make them happen on our own.


As for the ghosts of Christmas future, their haunting lilt can be heard in the words of the recent provincial throne speech; “$8-billion infrastructure deficit” and, “new roads, schools, recreation facilities and court houses”. And in the eerily similar call to arms from the Federation of Canadian Municipalities, “infrastructure on verge of collapse”.


Clearly there are ghosts to consider in this discussion. But they are not the Friday night fright variety. Instead they have far more in common with the ghosts from Dickens’ timeless Christmas tale. Ultimately those ghosts taught a valuable lesson about how the willingness to change and to try new things can make life better for everyone. 

Charles Cirtwill is the acting President of the Atlantic Institute for Market Studies, an independent, non-partisan public policy think tank based in Halifax, NS.