Transportation Partnerships Conference July 8 & 9th, 2002 Process Panel Transportation Partnerships Conference July 8 & 9th, 2002

Overview Fiscal Strategic Budget Legislative Policy Framework Organizational

BC’s Rising Taxpayer Supported Debt/GDP 1998/99 - 2001/02 Newfoundland 46.5 47.0 30.9 34.7 44.1 47.1 PEI Nova Scotia New Brunswick 30.8 24.5 36.2 42.5 33.9 32.5 Quebec Ontario 21.2 24.1 Manitoba $4.4. b deficit forecast for 2002/03 tax supported debt forecast to increase from $27.3b in 2002 to $34.3 b in 05 total debt/GDP (i.e. all gov’t) increase from 26.6% in 01 to 31.3% in 2003 23.4 29.4 Saskatchewan 4.4 13.3 Alberta 20.3 21.3 BC 5 10 15 20 25 30 35 40 45 50 55 % of GDP Source: Toronto Dominion Bank estimates, October 2001.

Real Private Capital Formation 1990 - 2000 % change Average 46.1% Real private sector investment = private capital portion of GDP - adjusted for inflation (i.e. real $) includes investments in residential & non-residential sectors (e.g. commercial, high-rise, industrial), oil & gas infrastructure, investments in technology & computer equipment, etc. 21.2% Source: Statistics Canada

Competitive B.C. Tax Rates 2002 Selected Tax Rates 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Personal Income Tax Corporate Income Tax 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 0.35% Corporation Capital Tax 43.70% 39.00% 46.40% BC Alberta Ontario 0.15% 0% 0.30% ¹Personal income tax: the top marginal rate, including federal and provincial tax rates, is shown. ² Corporate income tax: the rate shown is the provincial rate; Alberta has announced it will reduce its rate to 11.5% by 2004/05; Ontario, plans to reduce its rate to 8%. ³ Corporate capital tax: rate is for general corporations; the BC tax will be eliminated on September 1, 2002. 13.50% 13.00% 12.50%

BC’s Cost Structure Competitive With Other Jurisdictions 120 100 80 60 40 60 80 100 120 Vancouver Calgary Toronto Ottawa Montreal Seattle San Diego Portland Dallas Raleigh Total Cost & Tax Index (U.S. Average = 100) Source: KPMG Competitive Alternatives 2002 Edition, 12 Industry Average 85.0 87.9 86.2 85.3 105.7 102.2 100.8 103.3 98.7 88.2

Strategic Process Strategic Government direction to consider P3s Ministry Service Plans Government focus on core business From: Command & control To: Accountability and performance

Budget Process Budget From: Capital as free good Publicly financed as first choice To: All-in & multi-year budgeting Emphasis on ASD & P3

Legislative P3 Considerations: Changes to date Ability to deal freely with land & buildings Authority to borrow, incur liabilities, give guarantees & indemnities Authority to make expenditures and enter into agreements Approval requirements Changes to date Transportation Investment Act & Tolling Policy School Act Bill 27, 28 and 29

Policy Framework - Objective Encourage Innovative Delivery Solutions ASD & P3 part of mainstream capital planning Assess options Best value for money & protect the public interest Guiding principles, standards, and tools Auguston School

Policy Framework - Objective Establish Best Practices (Traditional & P3) Business cases & risk management Transparent & predictable budget process Competitive & open procurement Reporting & monitoring standards Risk based oversight Tech BC at Central City

Partnerships British Columbia Need: New risks Limited expertise in government Provincial resources managed in silos Improve planning synergies & cross pollination of ideas Capture policy experiences Capitalize on private sector expertise Mt. Saint Mary (site) Sunrise Assisted Living

Partnerships British Columbia Vision: Centre for knowledge & expertise Educator Reduce transaction costs Standard documents & contracts Advice to government Deal structures and policy issues Remove barriers Help achieve consistent government policy objectives Entry point for private sector Help identify & manage risk