Public Private Partnerships
Innovation or Profiteering?
History of Infrastructure Development
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1800-mid 1900s religious, philanthropic,
charitable institutions
1948 – National Health Grants Program
1971 – Wind up of National Funding,
Provinces and Municipalities take
responsibility
1990s – Tax Cuts Agenda, Delayed
Infrastructure Programs, Growth of P3s
Fiscal Imbalance
Decline in federal transfers
 Downloading of responsibility
for infrastructure
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P3s – What Are They?
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Public Private Partnerships, also called PFI – Private Finance Initiative,
AFMs – Alternative Finance Mechanisms, AFPs – Alternative Finance and
Procurement
While generically described as “partnerships” the legal relationship
embodied in PPP may be a partnership, joint venture, corporation, lease,
management arrangement, trust or other structure
All definitions include judgements on the benefits or damage caused by
these schemes
Proponents – P3s harness innovation and transfer risk
Ontario Health Coalition – P3s are simply another term for privatization
British Medical Association – PFI is “Perfidious Financial Idiocy”
Models of PPP
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Privatization
BOO – Build Own
Operate (Ontario
Long Term Care
facilities since 1997)
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BOT – Build Operate
Transfer
DBFO – Design Build
Finance Operate
(Brampton & Ottawa P3
hospitals and new P3
hospitals)
Concession Lease
Corporatization
BTO – Build Transfer
Operate
Lease
Ontario Health P3s/Privatization
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P3 Hospitals – DBFO P3s, DBF P3s
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Long Term Care Facilities built under Conservative
Government 1998-2003 – BOO
Private Homecare Contracts brought in under
Conservative Government 1997
MRI/CT clinics
IT contracts, leasing and concession arrangements, etc.
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The Claims
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Harness new
investment
Not privatization
Transfer risk
Come in under
budget and within
timelines
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Innovate
Find efficiencies
Public control
maintained
Separation of
strategic control from
operation
The Problems
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Higher cost
Cuts to services –
shrinking scope of public
medicare
Inflexible contracts
Loss of democratic
control
Legal
wrangling/management
breakdown
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Commercialization of
public service
Shoddy
construction/maintenance
and safety problems
Inequality
Creation of new risks
Deepening privatization
P3s in Operation
P3s in Operation
P3s in Operation
P3s in Operation
Public Alternatives to P3s
Can We Jump Into P3s and
Get Back Out Again?
NAFTA
 Cost
 Duration
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Resources
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www.policyalternatives.ca
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www.ontariohealthcoalition.ca
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“Funding Hospital Infrastructure: Why P3s Don’t
Work, and What Will” by Lewis Auerbach, Arthur
Donner, Douglas D. Peters, Monica Townson, and
Armine Yalnizyan
Click on Public Private Partnerships
www.P3watch.ca