While the Ontario government is touting the fact that Infrastructure Ontario’s (IO) potential service expansion beyond provincial borders will create jobs for the province’s construction industry, stakeholders are not so sure.
“Our concern is what does this really look like and how exactly is this going to benefit contractors in Ontario? We have some questions,” stated Clive Thurston, president of the Ontario General Contractors Association.
“Certainly, the IO system is one of the better systems around, but if it is going to deplete expertise from the current organization or incur risk for Ontario by becoming involved in projects outside of Ontario in other countries, we’re not sure how all that works.”
Infrastructure Minister Monte McNaughton made the announcement at the recent 2019 Infrastructure Investor Global Summit in Berlin. IO is known around the world for developing public-private partnerships that deliver complex infrastructure projects.
“IO has been solicited by many entities outside of the province seeking to better understand how IO operates and very few entities can deliver the types of unique public-private partnerships that Infrastructure Ontario manages,” a Ministry of Infrastructure spokesperson stated in an email to the Daily Commercial News.
“The expansion is intended to help IO capitalize on its strengths and unlock opportunities for Ontario businesses internationally while generating profit for the province.
“IO is well-positioned to take on this initiative.”
According to the ministry, the proposed legislation would set out types of advice and services that IO could provide outside Ontario when directed to do so by the minister of infrastructure. Services could include advice on the development of public infrastructure loan programs, as well as advice and services related to real property, financial or strategic matters, implementation of transactions, and project management and contract management of infrastructure projects.
We don’t fundamentally have a problem with it as long as it does not have a negative impact on what we’re trying to do
— Clive Thurston
Ontario General Contractors Association
The new initiative will begin with two low-risk potential pilot projects. If they are successful, the government expects IO will take on new clients in the near future.
“The pilot projects will allow us to identify any possible risks and ensure that we move forward in a thoughtful and measured way that mitigates any risks,” the ministry stated in its email.
“All operational costs and expenses (e.g. project-based insurance), would be passed on to prospective clients. The government and IO will carefully select appropriate projects and clients.”
Sean Reid, vice-president and regional director for the Progressive Contractors Association of Canada, said the benefits of the initiative are three-fold.
“First, it will open up new markets for Ontario businesses especially in the construction sector around the world,” said Reid. “Secondly, it promotes Ontario’s construction know-how around the globe and positions Ontario as a leader in construction and infrastructure development. This is going to be an excellent message to send to the investment community internationally, particularly as we are looking to find alternative forms of funding for our infrastructure projects.
“The third thing it’s going to do is to create a new revenue stream for the government to fund the work of IO and other initiatives, so this is also a benefit to Ontario taxpayers.”
Mark Romoff, president and CEO of the Canadian Council for Public-Private Partnerships, echoed Reid’s comments.
“The Canadian Council for Public-Private Partnerships has long been a champion of exporting Canadian P3 expertise abroad and we welcome this announcement by the Ontario government,” he said in an email.
“Jurisdictions around the world recognize that Infrastructure Ontario is a leader in the procurement and delivery of P3s and there is demand to learn more about IO’s model and best practices. And, as more jurisdictions adopt a P3 program that emulates the IO approach, the better placed Ontario companies will be to succeed in those markets given their successful history here at home.”
Thurston said he and his members are unsure what is driving this and what the end benefit is.
“We don’t fundamentally have a problem with it as long as it does not have a negative impact on what we’re trying to do here in Ontario where we have a very, very busy infrastructure schedule and we basically need all hands on deck to ensure that we can deliver,” Thurston pointed out.
Although he knew IO was promoting their system extensively, the announcement came as a bit of a surprise, Thurston said. He added the Province of B.C. also attempted to do this and found it was taking away from the needs of their own province so they stopped.
“We have been meeting extensively with the ministry to discuss some our concerns about some of the things that can be done better to improve things here in Ontario. We have a good partnership with Infrastructure Ontario and we have open and honest discussions so this caught us a little off guard,” explained Thurston.
“Yes, there is much that others can learn from what we do here in Ontario but there is still more we need to do here to ensure we are able to deliver the infrastructure we need here. We look forward to further consultations.”
Ian Cunningham, president of the Council of Ontario Construction Associations, said he was aware the government is interested in attracting more bidders particularly on large public procurements.
“The concern of course is that international companies are not familiar with Ontario and with our legislative and regulatory requirements,” said Cunningham. “The current practice is that most will partner with a domestic company. A good example would be the Eglinton Crosstown or the Gordie Howe bridge where there are Canadian partners with international firms to perform the work or part of the consortium on these big projects. These things tend to work best when there is a domestic partner.”
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