June 8, 2004

Remarks to the University Health Network Conference
by David Caplan, Minister of Public Infrastructure Renewal

Check Against Delivery

Thank you for inviting me to join you tonight, and for giving me this opportunity to bring you greetings from Premier McGuinty.

The topic of the conference we are closing tonight is close to the top of the Premier’s agenda and mine.

The McGuinty government has made it a top priority to deliver real positive change in healthcare.

So a conference that promises fresh thinking on the challenges we face in building a stronger, healthier Ontario is both welcome and timely.

In many ways the University Health Network is close to the ideal of what a modern healthcare network should be.

Treatment, teaching and research support each other.

Some of the innovative methods being developed here for financing and managing healthcare facilities will become models for the rest of Ontario and indeed, for the rest of the world.

This conference is a clear indication of that.

For example, the idea of using a one-of-a-kind bond issue to help finance the biggest hospital redevelopment project in Canada is an important development.

It breaks new ground in financing health facilities.

It is the kind of made-in-Ontario solution we are looking for one that reflects the needs of this province, and the core values we will use to assess infrastructure procurement and financing.

But the fact that a bond issue was necessary highlights an issue that will be my main theme this evening.

That is the disparity between the demands for public services, especially in healthcare, and the resources available to governments to meet them.

This is nothing new, of course. The demand for public services has always exceeded the supply of public money.

But if the issue is not new – and it isn’t – the scale of the challenge we face is unprecedented.

The challenge comes in two parts:

The first is the need to restore and replace public infrastructure that has been allowed to fall into disrepair over the past two decades;

The second is the need to provide new infrastructure to accommodate the phenomenal growth Ontario is experiencing, especially in the GTA and southern Ontario.

Our government’s key priority is healthcare, as the budget we presented last month clearly indicates.

People need fast, effective medical treatment. There can be no question about that. And we are investing heavily in healthcare facilities, like the University Health Network, to make sure good, effective care is accessible to everyone.

But Ontarians also need good schools and efficient transportation and transit systems.

They need clean, safe drinking water.  They need strong communities and a better quality of life. They need a clean, green environment.

And they need the public infrastructure that will promote economic growth, and maintain the prosperity we enjoy as a modern, successful society.

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

According to the Royal Bank of Canada, Ontario currently is 50th in per capita infrastructure spending when compared with all North American states and provinces.

The TD Bank Financial Group, in a paper published last month, estimates that Canada needs between $50 billion and $125 billion dollars to repair past neglect.

I think they are optimistic. Ontario alone may require $50 billion.

But regardless of the exact amount, no one will disagree with the TD Bank’s conclusion. This is what the report said:

“While the exact cost is hotly debated, one thing is for sure: the figure exceeds what most governments could viably foot under the status quo.”

And that is most certainly correct.

The Government of Ontario, acting alone, and using our existing resources, cannot finance all of the investments required to bring our existing infrastructure up to a good state of repair.

And repairing what we have is only part of the challenge.

We must also build anew to accommodate the growth Ontario has already experienced, and the new growth we know is coming.

Given these challenges, how can we provide the public infrastructure the people of Ontario deserve and demand?

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

We’ve done that in our first budget. The budget includes an overall 17 per cent increase in infrastructure investment over the previous budget.

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 to do this. For example:

• We are doing better planning for public investments.

The Ministry of Public Infrastructure Renewal is currently developing a 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 is developing guidelines and benchmarks to help government ministries and the broader public sector manage public assets better, so we get the maximum return from our investments.

For example, we can improve maintenance of existing assets so they last longer. 

And we can direct the monumental growth we know is coming to areas where existing infrastructure can best accommodate it.

Third, we must develop partnerships with other governments to maximize infrastructure investments, and more important, to maximize the impact of those investments by coordinating our activities with our partners.

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

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

These funding agreements represent significant progress in meeting urgent needs to improve roads, bridges, water systems, and transit: more than $3 billion dollars in total to improve the TTC, to expand GO Transit, to help small town Ontario fix municipal infrastructure and to develop public transit systems in York Region and in Ottawa.

You can expect substantial investments in healthcare infrastructure as well.

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

That spirit of cooperation can be seen in our first budget, which included financial tools – like Infrastructure Renewal Bonds and the infrastructure renewal loan program – that will help municipalities invest in infrastructure renewal. 

Municipalities are key players in our plans to improve and rebuild Ontario’s infrastructure. After all, they own most of it.

Finally, we must engage the private sector in innovative ways.

This process has already begun.

Most of you will be aware of the discussion document my Ministry circulated this spring about infrastructure financing and procurement and the public consultations that have just concluded. I expect some of you participated in those discussions.

Over the summer we will take the next step, by completing a framework that will outline how the government will engage the private sector in infrastructure financing and construction. 

And we intend to move forward with the new hospitals in Brampton and Ottawa, which include private sector collaboration.

There has been a lot of controversy about those two projects, and a lot of fear-mongering as well.

So let me say a few words about privatization, and about partnerships with the private sector.

Some people intentionally confuse the two. In fact they are very different.

 Privatization usually involves the transfer of core public services to the private sector. We won’t do that.

Let me be clear: the McGuinty government has no 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 are owned by municipal governments.

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

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

Our discussion paper on infrastructure financing and procurement described the principles that will guide this relationship.

I want to repeat these principles for you this evening:

• 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 must be fair, transparent and efficient.

I believe collaboration and partnership with the private sector are possible within these principles.

And I want to encourage private-sector partners to come forward with the innovative and pragmatic approaches that will help us finance and build a new generation of public infrastructure in Ontariomuch like the bond issue that is helping finance the redevelopment of the University Health Network.

That isn’t the first step to privatized healthcare; it’s the first step toward providing better public healthcare the care our people need and deserve.

We believe public assets should remain under public control. But having said that, we see 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 healthcareso 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, colleges and universities must be expanded, upgraded and maintained.

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

So 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 deserve the services they elected us to protect and improve.

Our first budget is a concrete beginning to the long-overdue process of improving our healthcare and education systems and helping our municipal partners build strong communities.

For the first time, Ontario’s budget looks beyond this year. 

We are setting budget priorities for the next four years, to provide stability and predictability over the life of our first mandate. 

Our activities are being guided by our government’s vision for strong communities, where citizens have easy access to the very best public services.

And our initiatives will follow growth management principles that balance our economic, social and environmental objectives.

Now some people say I get too excited about infrastructure renewal.

But let me tell you why. The purpose of the McGuinty 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 improve our quality of life.

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

Restoring Ontario’s public infrastructure is a key element in achieving those goals.

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