3
FIGURE 2: PREMIUMS PROVIDE A STABLE SOURCE OF FUNDING EVEN DURING DOWNTURNS
SOURCE: CLHIA
3.0 Enhancing the Infrastructure Private Public Partnership Market in Canada
3.1 Overview of P3 Market in Canada
P3s involve a contract between a public sector authority and a private party, where the private party
assumes a major share of the risks in terms of financing and construction and ensuring effective
performance of the infrastructure, from design and planning through to long-term maintenance over
the term of the agreement.
4
P3s are an attractive funding mechanism for long-term infrastructure projects such as hospitals,
airports, roads, bridges and government facilities. They have been shown to deliver projects on time
and within budget. P3s work because they engage the expertise and innovation of the private sector
and the discipline and incentives of capital markets. In addition, P3s are an attractive funding option for
governments because they limit the upfront investment required by governments to build public
infrastructure.
Canada's P3 market has evolved considerably over the years both in volume and capital size. Canada is
generally acknowledged as a global leader in P3s. The continued growth of the Canadian P3 market is
demonstrated in Figure 3 below. Over the last five years, 63 P3 deals have reached financial close.
Together these projects accounted for a capital investment of approximately $34.2 billion.
4
http://www.p3canada.ca/about-p3s/frequently-asked-questions/
-40.00%
-30.00%
-20.00%
-10.00%
0.00%
10.00%
20.00%
30.00%
40.00%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Percentage
Change
(Annual)
STABILITY OF INSURANCE PREMIUMS
Life and Annuity Premiums TSX Index
