By Lisa Mitchell, President and CEO, The Canadian Council for Public-Private Partnerships
There is great excitement about Canada’s ambitious infrastructure and nation-building agenda but there is also growing confusion . . . and confusion does not bode well for success.
What Canada needs is a clear national infrastructure narrative outlining how standalone projects work together to contribute to a more prosperous and resilient Canada. That narrative should include how various governments, departments and agencies are working together to deliver on these objectives. Call it a whole of Canada and whole of government approach.
Without greater clarity and transparency to tie all these loose threads together, the risk is not simply slower project delivery, it is diminished investor confidence, fragmented decision-making, and the potential creation of assets that fail to deliver their intended economic or social value.
If Canada announces the desire to build a new port — and have the broad support of Canadians and businesses at home and abroad to do so — the government needs to make its case and answer some basic questions: What transportation corridors will feed into the port? What rail or road upgrades will ensure efficient movement of goods? How does the project align with industrial development strategies in surrounding regions? What community infrastructure is needed to support population growth? And how will it support Indigenous economic participation and local workforce development?
When projects are clearly positioned within a national framework, one that clearly articulates the value of a project as part of a broader system and network of projects, they become far more compelling. They signal purpose. They demonstrate foresight. They build confidence.
This confidence is particularly critical when it comes to attracting private capital. The government has said it wants to “catalyze” $1 trillion in total investment in Canada over the next five years. While Prime Minister Mark Carney works to bring the world’s largest investors to Toronto this fall for the “first-ever Canada Investment Summit,” it is important to keep in mind that private capital comes in many forms and from a variety of sources.
Canada has long relied on private sector expertise and investment to help deliver its much-needed infrastructure projects with close to 300 public-private partnership projects built in Canada over the last 30 years. These projects have been largely financed by Canadian workers, small and medium pension plans, insurance companies and contractors. This same community of investors is prepared to commit significant capital when they see a predictable environment underpinned by long-term policy direction.
In addition to alignment, two other ingredients are essential: credibility and certainty.
Credibility comes from a government’s ability to articulate a clear strategic vision and follow through with disciplined project selection, which is clearly understood by the broad investment community and supports their appetite to invest. Using proven methods like public-private partnerships, that have demonstrated success across a wide variety of assets, value to taxpayers and stable returns on investments for the private sector, should be at the top of the procurement toolbox for all government agencies tasked with building Canada.
Certainty for the private sector, arises when that vision is translated into a transparent, sequenced pipeline of projects that investors can use for their investment plan. Together, these factors reduce perceived risk, lower financing costs, get shovels in the ground faster and deliver better value for taxpayers.
At present, however, Canada’s infrastructure landscape is fragmented.
To boost Canada’s sovereignty and economic resilience in times of global uncertainty, the government has spent the past year creating several new funding mechanisms and coordination tools impacting the infrastructure sector. These include the Major Projects Office, the Defence Investment Agency, and Build Canada Homes along with programs, such as the Arctic Infrastructure Fund, Build Communities Strong Fund, the Trade Diversification Fund, and most recently the Canada Strong Fund.
Each of these programs reflects legitimate policy objectives but in the rush to drive growth, the government has muddled the parameters of what they will do, how they will or will not work together, and how they fit in with existing organizations and programs.
It feels a bit like Who’s On First?
Without visible linkages between strategy, project prioritization, delivery methods and funding decisions, the system risks sending mixed signals to the market and an industry spending more time trying to figure things out rather than getting shovels in the ground.
Investors may struggle to understand what projects are likely to proceed on predictable timelines, what the revenue potential is, what kind of financing solution they should employ, and how various government funding envelopes will interact. This uncertainty can delay decisions by the private sector, who need to mobilize capital, labour, and supply chain.
Last month, Prime Minister Carney told Canadians that “hope isn't a plan, and nostalgia is not the strategy,” as he warned we need to pivot from historical trade reliance on the United States to embrace new partnerships and new areas for growth in a changing world.
I would like to add another caveat: Ambition alone is also not a strategy.
The federal government has a responsibility to connect the dots for Canadians, project partners and the global investment community more broadly.
The Defence Industrial Strategy is a start, with its call for strong partnerships and close collaboration among the military, Canadian industry and multiple government departments and agencies to rebuild the military and enhance Canadian sovereignty and industrial innovation.
By clearly articulating its national infrastructure strategy, Ottawa can create the conditions necessary to attract the investment it estimates is required to build a stronger and more independent Canadian economy.
In doing so, it will send a powerful signal to the private sector that Canada is not only ambitious, but also has a concrete, disciplined and strategic plan on how it delivers on that ambition. Industry stands at the ready to support Canada’s ambitions. A national strategy will help provide the necessary conditions to be successful.
