CLHIA-ACCAP

9 FIGURE 4: NUMBER OF P3 DEALS BY PROVINCE Source: The Canadian Council for Public Private Partnerships We believe that there are opportunities in all provinces to do more in this regard and recommend that all provinces in Canada develop a P3 champion, analogous to PPP Canada, Infrastructure Ontario or Infrastructure Québec. As well, in order to materially increase the incentives to issue P3 investments at the provincial level, we believe that all provinces should introduce a P3 screening requirement for potential deals. Introducing a provincial P3 screening requirement would help to increase the supply of P3s to the Canadian market as well as to build out the capabilities provincially for such deals. Canada's life and health insurers have successfully completed P3 transactions of sizes as low as $20 million. The industry has the capability and appetite to take on more smaller deals going forward. As such, we believe that a lower screening threshold at both the federal and provincial levels would be beneficial. We believe a more appropriate limit would be $20 million. It can be a challenge for governments to attract sufficient bids for smaller projects given the relatively complex and expensive bidding process for potential investors. We believe, however, that a lower screening threshold would be feasible if implemented in conjunction with the other recommendations in this section that, cumulatively, will help to reduce the costs of smaller P3s for potential investors and thereby increase their overall attractiveness. Therefore, the CLHIA recommends that: • The Canadian Government lower the Building Canada Fund P3 screening threshold to $20 million, • All provinces in Canada put in place infrastructure agencies to promote and help support the use of P3 arrangements in their respective provinces, and • All provincial infrastructure agencies commit to conducting P3 screens of all provincial infrastructure projects in excess of $20 million that are seeking provincial funding.

• CLHIA Report on Long-Term Investment Policy
• Table of Contents
• 1.0 Introduction
• 2.0 Role of Insurers as Long-Term Investors
• 3.0 Enhancing the Infrastructure Private Public Partnership Market in Canada
• 3.1 Overview of P3 Market in Canada
• 3.2 Life and Health Insurers Demonstrated Appetite and Expertise in P3 Investments
• 3.3 Shifting the Balance between Short-term and Long-term Financing
• 3.4 Harmonization of P3 Documentation for P3 Projects under $50 million
• 3.5 Pooling of Smaller Deals to Increase Supply
• 3.6 Increasing the Average Duration of P3s in Canada
• 3.7 Strengthening Government Commitment to P3 Projects
• 4.0 Increasing the Supply of "Ultra-long" Government Bonds
• 4.1 Issuance of 50-Year Federal Bonds
• 4.2 Increasing the Supply of 50-year Provincial Debt
• 5.0 Impact of Government Policy on Long-term Investment Market
• 5.1 Accounting Standards
• 5.2 Prudential Regulation
• 6.0 Conclusion
• APPENDIX -- LIST OF CLHIA RECOMMENDATIONS