Despite the oft-maligned paradigm of governments entering into contract with private firms to provide services and/or build infrastructure for the public good, public-private partnerships, or P3s, continue to gain steam in Canada.

Skeptics say the fact that governments can borrow money at lower rates means asking private firms to finance the costs of pro-society, mega-projects like hospitals or ferries, will cost the public more. Supporters of P3s counter that while this may be true in the initial start-up phase of any given project, a private firm that runs a hospital, let’s say, can manage it more efficiently than the slower, red-tape apparatus of the government machine and have it ready sooner for a populace that needs it. The argument rages on.

What isn’t readily apparent is whether NPOs have any place in the discussion.

Not the right place to be

Jane Peatch, executive director of Canadian Council for Public-Private Partnerships (CCPPA) in Toronto is very succinct when asked about the issue of the voluntary sector entering into P3 arrangements.

“[P3’s] are still commercial structures and the bulk of them are done with entirely commercial organizations in partnerships with government,” she explains. “This doesn’t mean there might not be some [voluntary sector P3 contracts] ‘out there’, but that the ones that our organization is following are usually a private consortia with a government agency, department, etc.” For her it’s a pretty cut and dry analysis.

After some research Peatch was, however, able to come up with an example where a nonprofit was involved directly with a P3, in a small town Sidney, B.C. where the a nonprofit called The Silver Threads Society partnered with municipal government and a private construction firm to build a new seniors recreation facility called the SHOAL centre (Sidney Healthy Options for Active Living). The details of the contract are complex, suffice to say, the money was put up by the firm; the land was donated by the Town of Sidney and the Silver Threads Society provides recreational programs as well as subletting the kitchen out to raise revenue for itself.

Still, it’s but one small example in an ocean of P3s.

The Government outlook

Over in Ottawa, the city’s website describes a P3 in the following way: “P3s are legal agreements between government and private-sector entities for the purpose of providing public infrastructure, community facilities and related services. Typically, the partners share risks, responsibility and reward in a shared investment.”

When asked whether the city has ever considered involving nonprofits in these investments and risks, Rob MacKay, manager of strategic projects for the City of Ottawa echoed Peatch’s views.

“We accommodate [the voluntary sector] in terms of programming in a P3 building, but usually we are looking for a P3 partner that can provide a full turn key service including financing, design build, operating and maintenance services,” he said.

But it’s clear the city is very high on these projects. And MacKay insists the good far outweighs the bad with P3 contracts, citing how consortia are better able to deliver projects on time, on budget and with more streamlined management. MacKay admits that P3s allow for the building of critical infrastructure that “would likely not have been funded under the City’s overburdened capital budget.”

Protecting the public good

MacKay also says it should be understood that governments don’t just go into these negotiations blindly or without a plan when considering RFPs for P3 projects.

“We have very specific quantitative and qualitative objectives and broad city policies that must be achieved. We then design a tight evaluation matrix to rate each response against,” he explains. “Keep in mind that a municipality’s mandate is to serve the public interest. Our qualitative requirements in P3 recreation facilities, for instance, would be accessibility for all socio-economic groups. Therefore the [private] partner is not allowed to just charge commercial rates. Some subsidies may therefore be required to keep the doors open for all groups and the city may need to provide this level of funding.”

But is it worth it?

Detractors of the paradigm don’t buy the government line and are just as hard-pressed to figure out where NPOs fit into all of this.

In B.C., Stuart Murray, principle researcher at the Canadian Centre for Policy Alternatives (CCPA) has followed this issue with great interest for a number of years. He’s far from convinced about the merits of P3s.

“I describe a project as a P3 when the government contracts directly with a private for-profit provider. So under this definition the role of voluntary organizations is limited,” Murray says. “P3s have been a big failure. They don’t provide debt-free capital, they are no more likely to complete a project on time and on budget; they cost more, and you lose transparency and public control. But P3s are successful at stimulating an entire industry of lawyers, accountants, and engineers to do work that might otherwise not have been done. It is for this reason that P3s are more expensive than traditional public procurement.”

That being said, he does have some definite ideas of how NPOs can insert themselves into the knotty tangle of P3s.

Watching the watchers

“I think the main role for the voluntary sector would be as a watchdog for whether the public interest is being met by P3s,” Murray says. “This is particularly true of Freedom Of Information (FOI) requests, where citizen activists can secure information about a policy initiative like P3s and advance the public interest. Unfortunately, P3s erect a barrier of secrecy between the volunteer citizen-activists and the P3 contract itself, under the guise of protecting the privacy of the private investor.”

As such, Murray advocates for increased voluntary sector vigilance when governments begin looking into P3 contracts. He stresses that an active and engaged volunteer citizen base that opposes or broadens the discussion on these projects, is a key role that should continue.

“Volunteers and citizen activists can also try to have some input into contract design by attempting to have issues of public interest added to the project,” he adds. “However, the experience to date has been that governments have seen the contract negotiation process as mostly a closed-door arrangement between government and provider. I would say the main role of the volunteer activist in this case would be to dog the government and ensure that public criticism is brought to bear.”

Keeping eyes wide open

With the exception of a few major charities and nonprofits who could conceivably put enough money on the table to enter into a P3 contract with government, it would seem that the voluntary sector may be best suited to wear the mantle of watchdog or agitator, ready to take governments to task if need be on P3 contracts, thereby keeping the discussions and projects honest and in the public eye.

Andy Levy-Ajzenkopf is president of WordLaunch professional writing services in Toronto. He can be reached at andy@wordlaunch.com.