PCs owe public info on P3 schools proposal By: Editorial Posted: 7:00 PM CDT Wednesday, Mar. 29, 2023

Opinion

Hey there, time traveller!
This article was published 29/03/2023 (920 days ago), so information in it may no longer be current.

The Stefanson government plans to build nine new schools under a public-private partnership, five years after an independent review recommended against using the model.

Government Services Minister James Teitsma announced last week the province plans to build the schools under a “bundled” procurement process, where a single tender is issued for all projects to speed up construction and, according to government, obtain optimal value for taxpayers.

Mr. Teitsma, newly appointed to cabinet in January, also said the schools will be built using the so-called P3 model, where a private developer typically owns and maintains the asset and leases it to government over a prescribed period.

The PC government, under former premier Brian Pallister, considered using that approach in 2018 to build four new schools but ultimately decided against it. An independent analysis by KPMG convinced the province to approach the project using the traditional method, where government directly finances and owns the asset.

Manitoba to build schools with private partners

“Government as a whole still sees merit to exploring the P3 model on other projects, but we did our research in this particular area and developed our own innovative approach,” Kelvin Goertzen, who was education minister in 2018, said at the time.

So what changed? Why has the province decided to use the P3 model to build schools when it concluded five years ago that doing so was not financially viable?

P3s have been used across Canada and around the world to construct and maintain a wide variety of public assets, including bridges, roads, schools and hospitals. They are complicated, long-term financial agreements that vary widely in detail, scope and financial outcome. Governments in favour of them claim P3s mitigate risk by eliminating cost overruns and reducing construction delays. Critics of the model contend they end up costing government more because long-term expenditures are often hidden or unforeseen and are eventually charged back to taxpayers.

P3s have been the subject of fierce academic and political debate for years, with both sides accusing the other of tailoring their cost-benefit analysis to arrive at pre-determined conclusions. Assessing P3s is not unlike trying to figure out whether to lease or purchase a new car: the risks, fine print and varying terms can make one option more attractive than the other, or not. It depends on the individual circumstances, the specifics of the deal and the assumptions used.

Are P3s good or bad for taxpayers? Like most complicated public policy: it depends. What government should do, at the very least, is provide the public with a thorough explanation to substantiate its decision. The Stefanson government has not done so.

Key questions remain about the type of P3 the province plans to use for the new schools.

Key questions remain about the type of P3 the province plans to use for the new schools. When asked, for example, who would own the buildings — the private contractor or the school division — Mr. Teitsma said that would be worked out later. The rookie minister said it’s his “understanding” the schools would be used the same way as other facilities owned by school divisions. That is an unacceptably vague and non-reassuring response.

Mr. Teitsma cited other projects that have been built in Winnipeg through P3s, such as the Chief Peguis Trail roadway extension, as proof they can provide good value for money. Considering the extent to which P3s differ from one project to the next, those comparisons are entirely meaningless.

The province should provide the public with complete details and a full accounting of how it plans to build the new schools, whether through a traditional P3 or some hybrid. Manitobans deserve to know whether they’re getting value for their money.