Issue link: http://clhia.uberflip.com/i/333350
7 To this end, we believe that governments should develop standardized project documentation and processes for P3s under $50 million. Standardization could include aligning contract terms with clear rules for amendments, consents and waivers, trust indentures, and service contracts. Not only would potential investors benefit from more standardized, and hence easier to assess project documentation, but issuers would as well. PPP Canada currently has the mandate to create and share P3 best practices within Canada and to encourage and increase the use of P3s at all levels of government in the country. It does so, in part, through its direct investments in opportunities at the federal, provincial, territorial, municipal and First Nations levels through the P3 Canada Fund. As such, it has an established thought leadership role as well as degree of direct influence over the P3 market nationally, making it a logical stakeholder to lead the effort at greater standardization of the P3 market in Canada for deals under $50 million. Therefore, the CLHIA recommends that: • PPP Canada take the lead in developing, in close collaboration with key stakeholders, including provincial governments, life and health insurers and other institutional private investors, standardized P3 documentation for P3 projects under $50 million, and • Governments at all levels only invest in P3 projects under $50 million that are structured in alignment with the new standard as a means to lead market adoption of these new standards. 3.5 Pooling of Smaller Deals to Increase Supply As discussed above, one of the current challenges is the relatively large number of smaller infrastructure projects that need financing -- particularly at the municipal level -- in Canada. Another option to help address this is to consider frameworks that allow for the pooling of smaller projects, where appropriate. Pooling of projects becomes more viable once a harmonization of P3 documentation has been achieved in the market. Having harmonized terms and contract language would allow for disparate and heterogeneous projects to be considered for bundling. Pools could potentially be developed for projects from similar industries or project phases as a means to attract institutional long-term investor groups. Importantly, any pooling of projects should be done in a manner that allows investors to understand the credit risk of any given project. Therefore, the CLHIA recommends that: • Once a sufficient standardization of P3 documentation for smaller P3 deals has been implemented, PPP Canada and Provincial PPP agencies seek innovative ways to develop sufficiently large pools of smaller infrastructure projects, where appropriate, to attract institutional long-term investors.