P3’s: Bridging the First Nations Infrastructure Gap

Summary

As Canada moves towards new and innovative ways to meet the increasing demands for infrastructure, First Nations continue to face a staggering infrastructure deficit of as much as $30 billion. An already dire situation is only complicated by an outdated procurement and financial model. This report commissioned by The Canadian Council for Public-Private Partnerships reveals there is a complex combination of circumstances, which could include the inflexibility of the Indian Act, existing government policies, or First Nations capacity issues contributing to the problem. The report suggests that the time has come to consider applying the benefits of public-private partnerships to address this particular infrastructure deficit.

Key Findings

• P3s have a strong track record in Canada of delivering high-quality public infrastructure faster and more cost-effectively than traditional delivery methods, providing better value for money.
• First Nation communities must be at the table through all phases of any P3 project right from the planning phases, ensuring that the community’s needs are served.
• The potential of P3s to benefit First Nation communities is immense. Amongst other things, P3s can connect communities (roads/highways, electrification, broadband) and provide core community infrastructure (schools, water/wastewater, housing).
• The potential benefits of P3s for First Nations communities include: the ability to build more infrastructure faster; better value for money over conventional modes of procurement; increased competition and expertise in procuring projects; high quality infrastructure; and the ability to ensure that operations and maintenance of an asset are fully funded.
• Generally the characteristics that make a project suitable for P3 procurement in First Nation communities include: quantifiable output specifications; adequate market capacity; a high degree of risk transfer; a distinct service or facility; a long-term project term; significant operations and maintenance; adequate project size; and, potential for innovation.
• Obstacles to implementing P3s for First Nation communities include: a lack of financial back-stop/long-term investment authority for projects, a lack of a governance structure to support the P3 procurement process similar to provincial P3 agencies, a lack of market support for First Nations P3s due to project size or financial uncertainty; a lack of understanding of P3s and technical experience to deliver P3s; and laws and regulation which may limit First Nation land management.
• Moving forward, barriers to First Nation P3s can be overcome through a structural solution that would bring together federally mandated institutions to provide support, guidance, funding and security for the financial markets

To access full article:

http://www.pppcouncil.ca/web/pdf/first_nations_p3_report.pdf