Saint John councillors have no choice but to push forward with a public-private partnership on the new water system, according to Conservative MP Rodney Weston.
Saint John's water treatment system will cost an estimated $220 million and in March the council voted to move forward with a public-private partnership to finance the project.
In the past, large infrastructure projects, such as the water system upgrade, would be funded equally by the federal, provincial and municipal governments.
But federal rules now say municipalities must, on more expensive projects, consider adding a private sector partner.
Saint John’s MP said the city’s water treatment system is too expensive for the federal government to come up with one-third of the cost.
So Weston said the city needs to adopt a public-private partnership model for its water system.
"This project would probably take the entire allotment of funds that would be allocated toward the province of New Brunswick for [the] Building Canada [Fund]," Weston said.
The New Brunswick government matches federal dollars in that infrastructure fund so Weston said there is little chance the province would agree to a deal where Saint John received all the money earmarked for the province.
The Saint John MP’s comments come after Paul Groody, the former commissioner of Saint John Water, said last week that city council should look at other financing options.
Groody said a public-private partnership would be more expensive and too costly for ratepayers over the long run.
Few funding options
Saint John Coun. David Merrithew said he believes the city’s options, when it comes to financing the water treatment system, are limited.
"It's my understanding that there's no other way to fund these projects other than P3," he said.
Karen Leibovici, the president of the Federation of Canadian Municipalities, said there is nothing that forces councils to adopt a public-private partnership model.
"It's up to the municipality," she said.
"P3 might be one model but it’s not the only model."
Previous Saint John councils have discussed and ultimately rejected the idea of a public-private partnership.
Under a P3 model, Saint John administrators would get the comfort of knowing exactly what the price would be and how long construction would take, according to the consultant's report.
PricewaterhouseCoopers, a consultant hired by the city, said in March Saint John could save $3.2 million by using a P3 model instead of the traditional procurement model.