Using Public-Private Partnerships to Improve Transportation Infrastructure in Canada

Source: Charles Lammam, Hugh MacIntyre, Joseph Berechman, Fraser Institute, May 2013

From the abstract:
There is general agreement among diverse groups and individuals that Canada’s transportation infrastructure desperately requires improvement. As governments move to confront this challenge, it is not enough that they simply commit to building more roads or bridges; the infrastructure must be built on time and on budget, be of high quality, and be well-maintained.

The conventional way for providing transportation infrastructure involves the government hiring a firm to build the facility based on a prescriptive design. The government then takes responsibility for operating and maintaining the facility and perhaps outsources some aspects of care to private companies. With a history of construction-cost overruns and time delays as well as other notable problems, the conventional process has not served Canadians well.

Public Private Partnerships (P3s or PPPs) are an alternative to the conventional process. P3s capture benefits of the marketplace while achieving the government’s goals for public infrastructure. This report examines the potential improvements P3s can bring to Canada’s transportation infrastructure. At the outset, it is important to note that, while P3s offer several advantages over the usual process, they may not be well suited for every transportation project. Put plainly, P3s are an important option in the government’s tool kit and should be given consideration when appropriate.