Nov 30, 2011

Is it P3s or the 3 Stooges? A tale of two cities


For those of us not fond of the expensive and secretive public private partnerships (P3s) promoted by the BC and Canadian governments, the last few weeks have been entertaining.

In one community voters rejected the use of a P3 water system. In another community the federal government refused a P3 after the city had spent $3 million on the proposal.  And as a colleague of mine put it, the federal government succeeded in making voters furious in what are probably two of the most Conservative areas of Canada.

In Abbotsford citizens rejected a P3 water project being pushed by the city and the federal government by a 75% margin in a referendum held during municipal elections. Abbotsford Mayor George Perry, most of his council and local Tory MP Ed Fast had been promoting the P3 which would have handed control of a new proposed water system over to a private company for decades. Ed Fast told the Abbotsford Times that the community didn’t have to use a P3 but there were no alternative sources of federal funding due to restraint.

On November 19th Abbotsford voters proved the mantra of TINA (There Is No Alternative) wrong when they voted down the P3 and replaced the mayor with an opponent who had opposed the project.

The other community was Calgary which was an enthusiastic booster of the privatizing projects. The City was looking for federal money for four recreation centres and had their eye on the $1.25 billion PPP Canada Fund.  So Calgary Mayor Naheed Nenshi was furious during the federal election last spring when the Liberal Party said in their platform document that they were going to get rid of PPP Canada.

The Mayor told the Calgary Herald in April that the rec centres might never be built if a Liberal government scrapped the fund because cities simply don’t have other pools of long-term federal cash to tap. According to the Herald article, City council voted in January 2011 to review a public-private partnership to build the four facilities, and Nenshi said the financial lifeline from the federal agency was a “huge” factor in the decision.

In April Nenshi said the city had received some “positive noise” about accessing the P3 dollars and expected a decision within the past few weeks, although that would  likely be postponed by the federal election campaign.

Unfortunately for Nenshi and Calgary this slagging of the Liberals during the election did not pay off for them.  Just last week the City got a letter from PPP Canada refusing funding and saying that recreation centres were really not eligible under the program. This was followed by some awkward twisting and turning and editing of the PPP Canada web site which had previously said the centres were eligible.

On Thursday, November 29th, however, the Calgary Herald reported that in fact:

Greg Melchin, the board chairman of federal funding agency PPP Canada Inc., said federal Finance Minister Jim Flaherty cut recreation centres from eligibility just last week.

Melchin maintained that up until that point, recreation centres were included in Crown corporation’s conditions and terms of references, and PPP Canada backed Calgary’s bid before it was made ineligible.

Even so, he said it’s the prerogative of the federal government to change policy and criteria if it wishes.

If Mayor Nenshi had fumed at Michael Ignatieff’s plan to axe the program in the spring he is now fit to be tied. “The real challenge here is a giant game of bait and switch,” Nenshi told several hundred people at a chamber of commerce luncheon, the Herald reported.

The Mayor’s web page now carries a featured story blasting the Conservative government and demanding the city be repaid for the $3 million it spent developing the proposal for the P3. And he is encouraging Calgarians to call their local Conservative MPs to tell them what they think.

Honestly, think what you will of the idea of P3s, can anything managed this poorly really be a good idea?