McNeil’s Office briefing note raises major concerns with P3 contracts

November 26, 2015

There are significant risks associated with P3 contracts and a litany of problems with public/private sector partnerships across Canada according to a Situation, Background, Assessment and Recommendation (SBAR) report prepared for Stephen McNeil.

View the document here.

The report was written by the Deputy Minister of Health, Peter Vaughan, at the request of the Premier’s Office in September 2014. While the benefits and risks sections are redacted, it’s clear the benefits are provided in about four lines, while the list of risks is more than a page long. The report also states, “It’s difficult to find examples of successful P3s where there are no criticisms.” 

The report highlights an extensive list of failed P3 contracts across Canada including some signed by Nova Scotia’s Liberal government in the 1990s. 

Specifically, Peter Vaughan singles out the toll highway through the Cobequid Pass, stating: “An estimated more than $300 million in tolls were produced on the Cobequid Pass for a deal in which private financiers put up $66 million. The government is paying an effective interest rate of 10% for 30 years, twice it’s rate of borrowing.” The report also criticizes the P3 school contracts signed by the Liberals in the 1990s for their “lack of effective oversight and management.”

The document raises significant concerns about the McNeil government’s plan to outsource and privatize more government services, says NDP Leader Maureen MacDonald.  

“The legacy of P3 contracts in Nova Scotia is one of short term gain for Liberal governments and long term pain for everyone else,” says MacDonald. “It’s concerning that the McNeil government is openly considering more P3 arrangements given what’s happened in the past. History has shown that governments pay far less in the long term when they own public infrastructure, instead of leasing it from private companies.” 

Earlier this week the NDP introduced a bill to create a Financial Accountability Officer to protect the public from privatization and bad Liberal P3 contracts in the future.