Alberta decision-makers talk infrastructure, funding in Edmonton
The provincial government held Alberta’s second economic summit of the year in Edmonton on Saturday.
Industry experts, business and not-for-profit sector leaders, academics, elected officials and members of the general public gathered to talk about the state of the province’s savings.
In her opening comments, premier Alison Redford talked about the province's use of P3s, which are business ventures funded and operated through a partnership between government and the private sector.
Under a P3, a government signs a contract with a private operator for that operator to design, build, and perhaps maintain or run a project over a set period of time.
The private operator puts up some or all of the cash and is repaid by the government, with interest, after a set number of years.
In the past, the P3 public-private partnership model has worked well on projects like schools and roads, Redford said Saturday.
Now, she argued, it’s time for the province to consider applying the model to help cover infrastructure costs.
“How do we challenge conventional thinking from an Alberta perspective on what else we can use P3 models for –- what else makes sense in terms of cost-effectiveness, accountability to taxpayers and being able to deliver infrastructure projects sooner?”
Opposition questions reliance on P3 funding
This focus drew criticism from Alberta Union of Provincial Employees (AUPE) president Guy Smith.
In a release Saturday, Smith said Redford’s focus on public-private partnerships and the future of the Heritage Savings Trust Fund is “out of touch with real economic issues facing Albertans,” adding that attention would be better addressed to senior care and the state of post-secondary education in the province.
Smith also said the summit focus on public-private partnerships is worrying, describing P3s as a “riskier form of borrowing.”
"There is no way to prove P3s save Albertans money because the deals are hidden from the public,” he said. “Our so-called freedom of information laws actually shield contracts between government and the private sector from scrutiny."
Provincial NDP leader Brian Mason and Wildrose leader Danielle Smith also spoke out against the P3s, saying the joint ventures will just end up costing taxpayers more in the long run as financing costs are stretched out for years.
Smith said the studies she has seen indicate P3s look good on a government over the short-term because there's less debt on the books.
"This government is trying to find all kinds of ways to justify new borrowing," she said.
"They have absolutely no plan to get the budget back into balance. They are overspending in multiple areas and it's causing them to have to go into deeper and deeper debt.
“I think that's a terrible thing for future generations," she added.
Mason said Redford is scrambling to find more cash because her government refuses to fix its broken financial model, adding the province does not get a fair share of oil royalties, forcing it to budget a third of day-to-day spending on fluctuating oil prices.
Other options to be explored
Finance Minister Doug Horner said the government is looking at "a whole raft of options when we talk about the next big infrastructure piece."
Horner said, for example, a new school in his riding of Spruce Grove-Sturgeon-St. Albert will see a partnership with the school board, the YMCA and possibly the developer.
"It's a combination of P3, the capital infrastructure we used to build the school, and the community coming together to build a wellness centre that is attached to the school for young kids (aged) K-9. That's the kind of thing we want to talk about," said Horner.
Horner has also raised toll roads as another possible revenue producer.
"We may or we may not go there, but let's talk about it," he said, adding that tolls would not be tacked on to existing roads.
"I'm not talking about (tolls on) the stuff that's already in the ground and already there. That's something we've already amortized. We've already figured out how we're going to do that."
The summit, a follow up to the earlier event held in Calgary in February, was held at the Centennial Centre for Interdisciplinary Science at the University of Alberta.
The summits are designed to give the government input on budget priorities. A series of open houses are planned for next week to give Albertans the chance to weigh in on provincial spending and saving.
With files from The Canadian Press