May 25, 2004

Remarks to the Canadian Council for Public Private Partnerships
by David Caplan, Minister of Public Infrastructure Renewal

Check Against Delivery

Good morning, ladies and gentlemen. Thank you for inviting me to join you today.

As I stand here this morning I am aware that a lot has changed since your last annual conference. And a lot has remained the same.

One of the things that has changed, of course, is the Ontario government. And in more than just name or politics.

In fact this government was chosen by the people to deliver real, positive change. So it is no surprise that there is a new way of doing business at Queen’s Park.

One of the things that has not changed is the heavy demand for public infrastructure, and the challenges this presents.

People need good schools and efficient transportation and transit systems. They need fast, effective medical care and clean, safe drinking water.

They need strong communities and a better quality of life. They elected us to provide those things.  And we are delivering them.

Our first budget, released just last week, begins the long-overdue process of improving our health care and education systems and helping our municipal partners build strong communities.

The McGuinty government has presented a budget that accomplishes five important goals.

First, it presents a comprehensive four-year plan to deliver the real, positive change that Ontarians voted for.

Second, our budget offers a four-year plan that will deliver the results Ontarians want and need for health care.

Third, our budget delivers a four-year plan that will ensure success for our students in our publicly funded schools.

Fourth, the budget offers a four-year plan that will support and generate new economic growth and prosperity for Ontario.

Finally, our budget presents a prudent four-year plan to balance the budget and manage   our finances in a more accountable and transparent manner.

But last week’s budget was not just about the choices we have made as a government, in the face of  $5.6 billion deficit left behind by the previous government.

It was also about how the McGuinty government intends to meet the challenge of an even larger infrastructure deficit.

Years of neglect, underinvestment and poor growth management have left us with a substantial infrastructure deficit in Ontario.

As you know, our government has now started the long-overdue process of developing a plan to tackle the infrastructure deficit – to help rebuild Ontario’s aging infrastructure.

This makes my talk with you this morning very timely.

Our plan is to improve public services.  I believe that the quality and capacity of our public infrastructure is tied to the effective and efficient delivery of public services.

To meet our substantial infrastructure needs we will need to work with the private sector.

I would like to make a few observations about public-private partnerships.

Some people intentionally confuse private sector involvement in the delivery of public infrastructure with privatization.  The two are, of course, very different. 

Privatization can involve the transference of core public services to the private sector. 

Let me be clear: neither the McGuinty government, my ministry nor I as Minister, have plans to privatize core public services like healthcare, education, or public health and safety.

We do not have any plans to privatize our drinking water or wastewater systems, most of which, by the way, are owned by our municipal governments, not the provincial government.

We are interested in ensuring that the infrastructure associated with those core services is available when it is needed. 

As the government outlined in its discussion paper on infrastructure financing procurement, we have guiding principles.

We intend to follow these principles as we build a new plan to get on with the job of repairing existing, and building new public infrastructure.

I want to repeat these principles for you this morning.

• Public interest is paramount.
• Value for the investment of public money must be demonstrated.
• Appropriate public control and ownership must be preserved and accountability must be maintained.
• Finally, the process by which we finance and build in the future must be fair, transparent and efficient.

In terms of financing and building a new generation of public infrastructure in Ontario, public-private sector partnerships are, I believe, possible within these principles.

Our principles are not stuck in ideology. We see public infrastructure as a means to an end.

We believe in strong, sustainable public services; infrastructure for us is one way those services are delivered.

We want good health careso hospitals must be built and maintained.

We need a strong public education system, because our economic advantages depend on a highly educated and skilled workforce so schools and colleges and universities must be built, expanded, upgraded and maintained.

We want strong, safe communities that work for the people who live in them.

We have to manage and plan for unprecedented growth in central Ontario to provide the public amenities every community needs: transportation and transit services, clean, safe water, effective wastewater treatment, and recreation facilities.

And we want economic growth and prosperity, which is dependent on effective, modern public infrastructure.

Those are the public services Ontarians need and deservethe services they elected us to protect and improve.

This will give you some idea of what we intend to do. The next question is: How do we intend to do it?

Let me begin to answer this question by describing the magnitude of the challenge.

Simply put, it is huge, far beyond the capacity of this government – or any other – to meet, using existing resources and methods.

In my view, the infrastructure deficit threatens the delivery of core public services and it threatens our economic prosperity and the quality of our lives.

Because in the past we failed to maintain existing infrastructure in a good state of repair, we now need enormous investments.

We need investments not just to build anything new, but also just to restore what we have. The bill for those repairs will amount to tens of billions of dollars.

But we also have to build new infrastructure, because we have to accommodate the millions of people who will be moving to Ontario – and especially central Ontario – in the coming decades.

In the past decade, the Greater Toronto region was the second-fastest growing census area in North America.

In this decade we will add more than 975 thousand people in the GTA; by the end of the next decade, we will add 715 thousand more.

In just three decades, the population of this region is expected to increase by 40 per cent – or about 3.5 million people by 2031.

Not to overstate this growth, but that’s like dropping the cities of Vancouver, Calgary and Edmonton into southern Ontario and then adding Winnipeg and Halifax.

These people will need housing, schools, hospitals, roads, transit systems, recreation facilities, and the public amenities we take for granted in a successful and prosperous society.

Providing them – especially providing them in a time of fiscal constraint – is a daunting challenge. How will we meet it?

First, we have to maintain – and, as circumstances permit, increase – our level of investment in public infrastructure.

Our first budget includes a 17 per cent increase in investment in infrastructure.

Second, we have to get smarter about the way we invest in infrastructure, so our investments give us the maximum return in terms of public benefit. There are a number of initiatives already under way. For example:

• We are doing better planning for public investments.

The Ministry of Public Infrastructure Renewal is currently developing a first-ever 10-year plan for the province’s capital investments.

This plan will help make sure that our investments match the government’s priorities, and are balanced across economic sectors.

• We are getting better mileage from existing infrastructure.

My ministry will develop guidelines and benchmarks to help manage public assets to get the maximum return.

We plan to encourage growth in the central Ontario region in those areas where existing infrastructure can accommodate it best.

Our goal is to protect green space, and create more compact, livable, transit-supportive communities.

That’s why we integrated the Smart Growth Secretariat into the ministry.

That’s also why the budget announced the development of a Growth Management Plan, for the Golden Horseshoe region.

• We are developing partnerships with other governments to maximize infrastructure investments.

Perhaps our most important achievement to date is simply the fact that we have created a new era of cooperation with other levels of government and other public agencies and a new era of aligning our infrastructure priorities.

In the past few weeks we have been able to announce joint funding agreements with the federal and municipal governments.

These agreements represent significant progress in meeting urgent needs in such sectors as roads, bridges, water systems, and transit.

 Here are some examples:

A $900 million investment in small and rural towns to improve roads, bridges, drinking and wastewater systems.

A $1 billion dollar investment in the TTC, to improve transit service in Toronto.

A $1 billion dollar investment to improve and expand GO rail and bus service in the Greater Toronto Area.

A $600 million investment to expand public transit in Ottawa.

These investments would not have been possible without the cooperation we have been able to build with our partners in other governments.

We are developing the tools to help our municipal partners invest in infrastructure renewal. 

Our municipal partners are key players in our plans to improve and rebuild Ontario’s infrastructure.

In our budget we introduced measures to help municipalities including the creation of the Ontario Strategic Infrastructure Financing Authority, as well as Infrastructure Renewal Bonds.

The authority will provide affordable financing to meet municipal infrastructure needs, and provide assistance in the education and housing infrastructure sectors. 

We will be engaging the private sector in innovative ways.

As announced in the budget, the ministry will be releasing a framework that will outline, among other things, how the government intends to engage the private sector in terms of infrastructure financing and construction. 

As I said earlier, the private sector has always had a role to play in infrastructure financing and construction and in providing expertise.

This role will continue in respect of our guiding principles. 

So we are developing a plan and in seven short months we’ve made real progress.

• We have issued a discussion paper on infrastructure financing.
• We have held intense consultations with our stakeholders.
• We have developed a new strategic alliances and partnerships with federal and municipal governments.
• Working together we have made significant investments to improve roads, bridges, drinking water systems and public transit.
• We have commenced work on a 10-year infrastructure plan.
• We have announced the creation of an infrastructure financing authority.

These are the first steps in a systematic approach we are taking to engage the broader public and private sectors to begin the renewal of Ontario’s infrastructure.

We welcome your help in meeting the substantial challenges we face.

But I want to impress on you this morning that we need a made-in-Ontario solution to meet the challenges of infrastructure renewal, procurement and financing.

We need a made-in-Ontario solution that builds on the experience of other jurisdictions as well as the expertise of the people in this room this morning.

We need a made-in-Ontario solution and plan that acknowledges the core values of this government, the needs of our people, and the realities of this province.

Our plan must also be guided by our government’s vision for strong communities, where citizens have easy access to the very best public services.

And our plan will follow growth management principles that balance our economic, social and environmental objectives to ensure a higher quality of life in communities across Ontario.

I believe we are entering a new era of infrastructure renewal. I call it the infrastructure renaissance.

And what’s even more exiting is that it’s coming of age coincides with the innovation renaissance. That’s a powerful combination.

But we are not building monuments.

The purpose of the government’s infrastructure strategy is to improve the public services available to the people of this province.

Our purpose is to build strong communities and help Ontarians improve the quality of their life.

Our purpose is to make Ontario an attractive investment for industry and trade that will strengthen our economy and create jobs.

Ultimately, our plan will shape the kind of society we – and our children – live in.

Renewing and rebuilding Ontario’s infrastructure is a key part of these plans.

I welcome your help in this most important endeavor.

Thank you.