Nurturing trust and respect is essential for building a successful public-private partnerships.iStockPhoto / Getty Images
To tackle Canada’s urgent priorities in infrastructure, housing, health care, Indigenous reconciliation and climate change, there’s a growing recognition that governments can’t work alone. Whether it’s to unlock capital, enlist expertise or ensure effective project management, sharing the responsibilities, risks and rewards with the private sector has become a significant way to accelerate large projects and service delivery.
But public-private partnerships (P3s) have a public perception problem. When things go off the rails, as with recent long delays in Toronto’s crosstown light rail transit project or operating issues with Ottawa’s LRT, the public is quick to criticize the arrangements.
Still, P3s are increasingly essential, said panelists participating in “Public-Private Partnerships: Where do we go from here?”, a recent Globe and Mail event, and innovative approaches are needed to create compatible partnerships, establish clear objectives and focus on their social impacts.
”We need to be able to have data and say ‘yes, there are issues, but here’s where things are working,’” said Lisa Mitchell, president and CEO for the Canadian Council for Public-Private Partnerships. “We need to be more vocal as an industry that we are promoting important developments.”
What many people don’t realize is that there have been more than 200 major public-private infrastructure projects across Canada in recent years, and most have been clear collaborations that got both parties what they wanted, said Matti Siemiatycki, a professor of geography and planning at the University of Toronto.
However, many have been contractual agreements rather than sharing the risks equally.
”That’s where there can be problems,” he said. “What’s needed is to look at deal structures that are set up as partnerships, rather than deals that are in each side’s own interests.”
Too often there isn’t enough emphasis on community benefits, such as hiring local labour or including community art and design, he added. “We are undervaluing how much public infrastructure serves as a cornerstone of communities. That doesn’t mean we have to be expensive and doesn’t mean we should be creating monuments to ourselves, but intelligent and creative solutions to local needs should be built into business models.”
Cherie Brant, partner and national leader for the Indigenous law group at Borden Ladner Gervais, said public-private partnerships have particular value for helping Indigenous communities in providing access to capital and addressing infrastructure gaps.
“If there is a will and there is capital, that gives you a way,” she said.
An example is the equity participation model that brought Hydro One and Indigenous communities into a revenue-sharing partnership, where transmission line projects are done while giving the communities an equity stake, leading to more jobs and procurement contracts.
It’s important to build relationships before putting shovels in the ground, several panelists cautioned.
Having candour and building trust is essential in all public sectors, said Adam Marsella, director of external affairs, corporate affairs at Novo Nordisk Canada, which has been active in community outreach in such things as diabetes and childhood obesity, as well as income inequality and primary care – “developing a model that brings more people into the discussion as part of a public-health dialogue.”
“Developers need to weigh in and say, ‘yes, we will build affordable housing into our developments.’ The impact on their bottom line is miniscule and the social impact is massive.”
— Michell Cohen, president and CEO of Daniels Corp.
In Indigenous communities, bringing people together around the campfire is the traditional way of building trust and understanding of what needs to be done, and that can be applied outside the Indigenous community, said Jeffrey Cyr, co-founder of Vancouver-based Raven Indigenous Capital Partners.
By building trust with investors in advance, explained Mr. Cyr, Raven launched its first Indigenous social finance venture capital fund in 2019 with an initial goal of $5-million, but ended up oversubscribed with $25-million.
A second fund established in 2022 has raised $100-million from corporate capital, topping its initial target of $75-million to invest in projects that advance the well-being of Indigenous peoples.
A focus on social impact is vital, said Dorthe Keis, architect, partner and business area manager of Copenhagen-based Arkitema Architects, which has been active in designing stations for Toronto’s planned Ontario Line subway. The company was involved in the master plan to redevelop one of Denmark’s most stigmatized and vulnerable social-housing districts. The Danish government invited developers to build private housing in the community, maintaining the number of social-housing units but reducing the proportion from 100 per cent to 40 per cent.
While the project was still in the planning stage, a community centre was built as a place for residents to contribute to discussions about creating new urban spaces and easy access to services and transit. Townhouses and standalone homes as well as apartments assured a diverse population and transformed what had been an island that people from surrounding areas had never been to before, to an integral part of the community, she said.
“A lesson learned is that social impact has to be lifted up in the scoring. Collaborative processes make room for innovative delivery of social impact,” said Ms. Keis.
”While the federal national housing strategy has allocated $82-billion to address the affordability crisis, the problem is that spread over 10 years doesn’t go far in solving the crisis,” said Mitchell Cohen, president and chief executive officer of Daniels Corp. “We need a whole community response to creating affordable housing. Developers need to weigh in and say, ‘yes, we will build affordable housing into our developments.’ The impact on their bottom line is minuscule and the social impact is massive.”
But the philanthropic sector needs to lean in as well, he adds.
“None of this is easy. Collaboration and partnerships take work, but this work is essential,” said Mr. Cohen. “It’s vital to invest the time and energy to listen deeply because listening will build respect and trust. And with that, anything is possible.”