Policy Trends in P3s US and Canada Jonathan L. Gifford, Ph.D. Center for Transportation Public Private Partnership Policy George Mason University

Canada – P3 Market Characteristics First P3 completed in 1997 (The Confederation Bridge: PEI – New Brunswick) “PPP Canada” formed in 2009 – a government agency focused on P3 development and investment P3 Canada Fund A merit-based program, designed to incentivize governments to use P3s The federal government backs the use of the innovative financing mechanisms 23 projects have been funded by the fund 8 transit infrastructure projects have received US$477 million in federal funding 240 P3s across the country Completed or projects under construction total US$72 billion in value 56 projects in transportation sector 2015-16 Cost savings = US$1.3 billion (Comparable VfM) $611.6 million (CAD$) (using average 2015 exchange rate of 1USD = .78CAD) The Canadian government undertakes a comparable VfM analysis to derive financial value for P3s vs traditionally procured projects http://www.p3canada.ca/~/media/english/annual-reports/files/2015-2016%20annual%20report.pdf For the 237 projects that have been completed or under construction: As of January 2016 “The value of those projects that have been completed or are under construction is $93 billion, and it’s estimated they’ve created more than 290,000 direct jobs and contributed more than $25 billion to Canada’s GDP.” http://business.financialpost.com/investing/outlook-2016/canadian-capital-markets-expect-p3-financing-windfall-from-ottawas-stimulus-spending Source: http://projects.pppcouncil.ca/ccppp/src/public/search-project, http://www.p3canada.ca/~/media/english/annual-reports/files/2015-2016%20annual%20report.pdf, http://www.p3canada.ca/en/about-p3s/project-map/

Canada – P3 Trends Federal government leadership has led to a pipeline rich in small, medium, and large projects P3 project pipeline is moving from social infrastructure to economic infrastructure projects Mega projects (> US$780 million) are becoming more frequent Increased focus on public transit infrastructure Public Transit Fund to support >US$780 million transit projects Bundling smaller projects into one large project Increases smaller municipalities’ ability to use P3s CA$1 billion = US$780 million in 2015 Source: http://www.mpinfrastructure.ca/news/p3-trends-municipalities-And-mega-infrastructure

United States – P3 Market Characteristics The market is growing but it has been slow States have had attractive sources of public funding Tax-exempt bonds, Highway Trust Fund Federal system implies 50 different experiences, promoting experimentation but hindering coordination across gov. levels E.g., South Bay Expressway Federal level promotes P3s in different ways BATIC (July 2016): Project preparation, credit assistance (TIFIA, RRIF, PABs), FASTLANE grants Litigation, by citizens, is an important avenue to oppose political and bureaucratic decisions E.g., South Bay Expressway, Elizabeth Rivers Crossing South Bay Expressway: Federal agencies opposed the Project on environmental grounds, despite the interest of the state to move the Project forward. Federal legislation impacting P3s: The FAST Act (enacted in December 2015) reauthorizes surface transportation programs for five years Build America Transportation Investment Center (BATIC) was created under FAST  Fostering Advancements in Shipping and Transportation for the Long-term Achievement of National Efficiencies (FASTLANE) program. The grants, totaling nearly $800 million, will be combined with other funding from federal, state, local, and private sources to support $3.6 billion in infrastructure investment in 15 states and the District of Columbia. TIFIA funding was cut by nearly 70% from the funding level established under the MAP 21 legislation Build America Bureau

United States – P3 Enabling Legislation + District of Columbia +Puerto Rico Kentucky and New Hampshire new additions in 2016 Kentucky (House Bill 309) Signed April 8, 2016 Allows both the state and local governments to use P3s to develop transportation and other public infrastructure. New Hampshire (Senate Bill 549) Effective August 15, 2016 Enacted authorizing the use of P3s to procure infrastructure projects Created an oversight commission Source: http://www.fhwa.dot.gov/ipd/p3/state_legislation/ August 2016. Source: http://www.fhwa.dot.gov/ipd/p3/state_legislation/ August 2016.

United States – P3 Trends Learning curve has improved delivery E.g. Presidio Parkway vs. South Bay Expressway. More on-time delivery Traditional funding sources drying up; P3s more appealing Debt-limits, opposition to tax hikes Ongoing debate between availability payments vs revenue-risk P3 project pipeline expanding beyond transportation E.g., University housing, Social infrastructure P3s battling political headwinds VA – P3 office absorbed into VDOT; TX – P3 office disbanded; CA – P3 law expires 2016; FL – cancelled projects California: The streets and highway P3 statute is set to expire on December 31, 2016. A bill (AB 1265) was introduced in February 2015 to extend the stature indefinitely but has not been moved forward significantly Texas: In June 2015, Texas passed legislation to create a P3 Center of Excellence to provide technical expertise and best practices for new deals, but the center has yet to receive significant funding. Source: http://nast.org/wp-content/uploads/2016/03/P3.pdf Source: http://nast.org/wp-content/uploads/2016/03/P3.pdf

Johnathan L. Gifford, Ph. D Johnathan L. Gifford, Ph.D. Center for Transportation Public Private Partnership Policy George Mason University jgifford@gmu.edu 703-993-2275 p3policy.gmu.edu @p3policy