Fundamentals of Public Sector Infrastructure Projects

  • November 06, 2017
  • Safiyah Husein

On November 1, 2017, a group of public sector lawyers and attendees gathered for a luncheon program on government funded infrastructure projects. The event was chaired by Joy Hulton from the Regional Municipality of York.

The first speaker was Navin Katyal, Vice President Legal Services at Infrastructure Ontario. Mr. Kaytal’s presentation was focused on the Infrastructure Ontario Loan Program. Infrastructure Ontario is well known for public-private partnership initiatives, but he said that their loan program has also been successfully funding infrastructure projects across the province. Funding is provided to municipalities and other public sector bodies using a pool financing model. Under this model, Infrastructure Ontario acts as an intermediary – obtaining funding from the capital markets, and more recently, the provincial government – and providing it to municipalities and other public bodies that may otherwise face difficulties obtaining funding. The loan program leverages the strength of its borrowing program and capital reserves to pass savings on to public sector borrowers. The other benefit the loan program provides is its long term financing at a fixed interest rate. Mr. Katyal said that to date, Infrastructure Ontario has approved $9.5 billion in long term financing to public sector clients in the province, the largest group being municipalities.

The next speaker was Bruce McCuaig, with the Privy Council Office as the Executive Advisor on the Canada Infrastructure Bank. Mr. McCuaig discussed the Bank as an opportunity for the private sector to create innovation in a traditionally public space. The bank has received funding from the federal government through the Investing in Canada Plan. The Bank will perform multiple functions including: investing in projects with revenue-generating potential that are in the public interest, attracting private sector investors for public infrastructure projects, and serving as a centre of expertise for infrastructure projects for which private sector investors are making significant contributions.  The government would be responsible for determining what is considered “public interest” and for setting out the policy direction and investment priorities of the Bank. Mr. McCuaig highlighted that seeking out private investments results in less reliance on public sector funding for infrastructure projects. The bank is expected to be operational by the end of 2017.  

The speakers concluded with Daniel Ferguson, Partner at Weirfoulds LLP and co-chair of the firm’s Infrastructure and Public Projects Practice Group. Mr. Ferguson discussed tips and considerations related to infrastructure funding arrangements between municipalities and senior government. In these funding arrangements, municipalities are the delivery agent, accountable for the operation of the project and senior government provides funding. Mr. Ferguson emphasised the importance of advance planning to ensure projects would be completed within the timelines for funding and that all the administrative requirements for the project are met. Other considerations include understanding eligible and ineligible costs, reporting requirements, termination for convenience rights of the senior funder, balancing public disclosure requirements with private confidentiality concerns, title to assets, procurement policies, dispute resolution, environmental assessments and Indigenous consultation processes. Mr. Ferguson explained that successful infrastructure projects are based on a fair balance of interests of each level of government.

The question and answer period touched on the importance of cooperation between different levels of government, the role in house counsel plays in infrastructure projects, expansion of the Infrastructure Ontario loan program, and contributions of the private sector to infrastructure initiatives.

 

About the author

Safiyah Husein is a graduate of the Faculty of Law at the University of Windsor, and is currently articling at the Office of the Ontario Ombudsman. 

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