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Provincial and Territorial Politics in Canada and Beyond

J07 - Workshop: Public-Private Partnerships II

Date: Jun 4 | Time: 03:15pm to 04:45pm | Location: EOSM 135

Chair/Président/Présidente : Joseph Garcea (University of Saskatchewan)

Session Abstract: Public Private Partnerships (P3s) are pervasive in most, if not all, spheres of the Canadian polity and economy the national and sub-national levels. This includes P3s in which the provincial and territorial governments are involved directly, and those in which they are involved indirectly. in and Despite their growing importance as policy and program instruments, most academics, policy makers, ratepayers, and voters do not have a very sophisticated understanding of why they are created, how they are governed, managed, financed and operated. The central purpose of this multi-panel workshop is to raise the level of awareness, interest, and knowledge of P3s among political scientists. The second objective is to motivate participants to think about important aspects of P3s that warrant greater attention in their respective research agendas and in their teaching.

Public-Private Partnerships, Social Impact Bonds and the Erosion of the State in Canada: John Loxley (University of Manitoba), Jesse Hajer (University of Manitoba)
Abstract: Public Private Partnerships and Social Impact Bonds are both forms of private sector encroachment on state activity and are new frontiers of commodification that ultimately rely on subsidies or concessions from the state. This paper provides an update on both models in the Canadian context and reviews theories that rationalize their emergence and growth. Both models have been nurtured by direct and indirect government support, as opposed to any demonstrated superiority, raising concerns that these models are proceeding contrary to the public interest.

Public-Private Partnerships: A Principal-Agent View: Mark Moore (Simon Fraser University), Aidan Vining (Simon Fraser University)
Abstract: Despite the wide use of PPPs, many have produced poor outcomes, including high transaction costs, extensive renegotiation and project bankruptcy. This paper uses principal-agent theory to explain why PPPs often fail when evaluated using the appropriate criterion of societal welfare maximization, and why, despite frequent failures, PPPs appeal to governments. Although social welfare is the appropriate normative goal against which to judge the performance of PPPs, society must delegate the authority to organize and operate public infrastructure to governments. Governments, in turn, choose the specific means of provision. From an institutional design perspective, the two major structural alternatives are: traditional government-financed design-build contracting, followed by government operation and maintenance (“public-sector” (PS) provision) or a finance-design-build-operate-maintain-transfer PPP provision or some close variant thereof. We analyze some of the trade-offs and consequences of this institutional design choice through the lens of principal-agent theory.


Scandals and Failures in Canadian P3 Markets : Heather Whiteside (University of Waterloo)
Abstract: With over 250 public-private partnerships (P3s) developed in Canada since the early 1990s, and a newly created Canada Infrastructure Bank eagerly expanding the nature of private equity in large commercialized public infrastructure, it is worth taking stock of how P3 markets are evolving and whether operational phase P3 governance methods suffice. Project websites and ribbon cutting ceremonies sufficiently track the ‘on time’ and ‘on budget’ features of a multi-year construction project, but the multi-decade operational phase is a much longer, costlier, and potentially more fraught time period for a partnership. This paper identifies several scandals and governance failures as P3 projects and markets mature, including: private partner bankruptcy, market monopolization, equity sales, and offshoring. Examples of national significance are drawn on such as the activities of Carillion, Bombardier, and Larco.