New infrastructure framework will mean more prosperity and stronger communities

Archived Release

New infrastructure framework will mean more prosperity and stronger communities

Ministry of Infrastructure

Province Introduces Framework To Guide Investment In Public Infrastructure TORONTO, July 27 - The McGuinty government is restoring Ontario's infrastructure and preparing for future growth through a comprehensive framework for planning and financing the province's investments in infrastructure, Minister of Public Infrastructure Renewal David Caplan announced today. "Ontarians deserve a new and better way of building the critical public infrastructure we all rely on," Caplan said. "This framework sets new guidelines to ensure our schools, hospitals, public transit systems and other public infrastructure is built, paid for and managed in a way that ensures the best value for our money." The new investment framework, entitled Building a Better Tomorrow: An Infrastructure Planning, Financing and Procurement Framework for Ontario's Public Sector, contains guidelines that will be used to assess proposals for new infrastructure, select the best way to finance the project and make sure construction is completed on time and on budget. The framework establishes five fundamental principles governing the approval of infrastructure projects and the selection of financing options: 1. The public interest is paramount 2. Value for money must be demonstrable 3. Appropriate public control/ownership must be preserved 4. Accountability must be maintained 5. All processes must be fair, transparent and efficient. The framework is part of the government's evolving 10-year strategy to restore Ontario's public infrastructure and ensure future economic prosperity and will be applied to all infrastructure projects in which the province makes a significant investment. This would include projects proposed by provincial ministries and agencies, municipalities, and public institutions like hospitals and universities - in effect, all future public infrastructure projects of any substantial size. It provides that public ownership and control will be maintained for hospitals, publicly-funded schools and water treatment systems and will also ensure that projects meet the priorities established in the province's 10-year plan for infrastructure, which is being developed now and will be released later this year. The government has identified several sources for these investments, including: - Direct grants from the provincial capital budget, which is $3.3 billion this year, an increase of 17 per cent over the previous government's allocation; - Federal-provincial shared cost programs like funding for GO Transit and the TTC, and the Canada-Ontario Municipal and Rural Infrastructure Program; - Pooled financing and low rate loans to municipalities and other public sector partners through the Ontario Strategic Infrastructure Financing Authority; - Public and private sector partnerships including investments from pension funds and others, under certain conditions; - New local government investment tools, such as gas tax; and - User fees, where appropriate and regulated. - "This is an essential and timely plan to fundamentally improve capital planning and financing in Ontario," said Hilary Short, president of the Ontario Hospital Association. "It provides an ideal platform to help advance the government's transformation agenda for health care." "The framework, coupled with a solid financing strategy and a multi-year capital plan, sets the stage for the most serious and comprehensive plan to re- build Ontario we have seen in 30 years," said Patrick Dillon, Secretary Treasurer, Ontario Provincial Building Trades Council. "Investing in infrastructure will strengthen our cities, towns and local businesses," said Len Crispino, President and CEO, Ontario Chamber of Commerce. "We are pleased to see a provincial infrastructure renewal plan with sound business practices and financing strategies." "Over the next 30 years Ontario will be running a construction program worth more than $100 billion," Minister Caplan said. "We need to apply intelligent, responsible and ethical business principles to running that program. By instituting a better way of building the public infrastructure, this framework will help deliver the real, positive change that will make Ontario strong, healthy and prosperous." www.pir.gov.on.ca Backgrounder ------------------------------------------------------------------------- NEW INFRASTRUCTURE FRAMEWORK - OVERVIEW Efficient public infrastructure is essential to delivering public services, stimulating economic growth, creating jobs and improving the quality of life for all Ontario residents. Under-investment and neglect by previous governments have left Ontario facing a massive infrastructure deficit. Waiting lists in hospitals, run down schools, and congestion and gridlock on our roads are visible signs of this neglect. We need both more investment and a more strategic approach to building the roads, hospitals, schools, water treatment facilities and public transit systems Ontarians need and deserve. Ontario is developing a comprehensive strategy to deal with these issues. Earlier this month the government released a discussion paper on how to manage growth in the Greater Golden Horseshoe. In the next few months the government will release a ten-year infrastructure plan with more specifics about what we plan to do, and when we plan to do it. The framework released today discusses how we will plan, finance, procure and manage the infrastructure Ontario needs. Building a Better Tomorrow: An Infrastructure Planning, Financing and Procurement Framework for Ontario's Public Sector, the document released today, is a set of policies, procedures and directives the Government of Ontario will use to evaluate and make decisions about proposals for public infrastructure projects. It will cover every significant infrastructure project proposed in the future by government ministries, municipalities, and public sector agencies like hospitals, school boards and colleges and universities. The Framework can be implemented without introducing specific legislation and will go into effect immediately. The framework is based on five fundamental principles: - The public interest is paramount. Public infrastructure initiatives should be delivered efficiently, protect and promote public health and safety, ensure high-quality public services and be accessible to all Ontarians. - Value for money must be demonstrable. Public infrastructure investments should be cost-effective and completed on time and on budget. - Appropriate public control/ownership must be preserved. Ownership and control of core assets must remain in public hands, regardless of the methods used to finance construction. - Accountability must be maintained. Public infrastructure initiatives should have clear lines of responsibility, rigorous and transparent reporting and oversight requirements and clear, measurable performance measures. - All processes must be fair, transparent and efficient. Public infrastructure initiatives should have efficient and fair bidding processes, contractual agreements that are based on clear, comprehensive guidelines and full public disclosure. The framework was developed after extensive consultations with stakeholders and the public. It incorporates: - An overview of the government's infrastructure planning process; - Key considerations to be addressed in planning, designing, financing and managing public infrastructure initiatives; - The roles and responsibilities of government ministries and agencies, municipalities, broader public-sector partners and the private sector in approving and managing the planning, financing and procurement of public infrastructure assets; and - Detailed information on best practices in infrastructure procurement and public asset management. Objectives The purpose of the Framework is to create a new and better way of building infrastructure to deliver better public services and enhance our economic prosperity. It is part of the McGuinty Government's commitment to deliver the real, positive change that will make Ontario strong, healthy and prosperous. It is designed to improve the government's over all approach to capital investments including: - Supporting the government's 10-year infrastructure investment plan, which will be released later this year; - Improving the planning, financing and procurement process for Ontario government assets; and - Encouraging and promoting best practices for infrastructure procurement and asset management within government and the public sector. The framework will ensure that Ontario's investments in public infrastructure are planned, financed, built and managed in a systematic and prudent manner, and subjected to the kind of critical analysis any large organization would use to evaluate substantial investments. Proposals for infrastructure investments - from any source, including government ministries, municipalities and public institutions like hospitals and school boards - will face a rigorous initial analysis and continuing oversight to ensure that the projects match the government's priorities, and are delivered in the most cost- effective way consistent with the public interest. The key objectives are to: 1. Implement the government's strategic plan for infrastructure renewal; 2. Establish clear rules for infrastructure development by articulating the roles and responsibilities of all partners in building and renewing Ontario's public infrastructure assets; 3. Assist Ontario's broader public sector, especially smaller and less experienced partners, in planning, designing, financing and managing public infrastructure investments; 4. Support line ministries and government agencies, municipalities, hospitals, school boards, and colleges and universities in developing innovative and creative ways to meet Ontario's infrastructure needs while protecting and promoting the public interest; 5. Facilitate the development and sharing best practices in infrastructure planning, financing and procurement across the public sector; 6. Support line ministries and government agencies, municipalities, hospitals, school boards, and colleges and universities in effectively engaging the private sector, where appropriate, in building and renewing vital public assets and optimizing public- private collaboration and 7. Encourage capital investment planning that takes into account the ongoing operating costs associated with capital investments in order to ensure efficient delivery of public services, increased accessibility for persons with disabilities, reduced public sector operating expenses and energy conservation. Methods To achieve these objectives, the Framework requires that: - A proper business case is developed for each project demonstrating the need for the project and the way it reflects the government's priorities; - The appropriate financing and procurement model is selected to ensure value for money; - An implementation strategy is developed in advance to ensure effective delivery of the project; - A project team with appropriate expertise oversees the project, and ensures compliance with the initial plan and implementation strategy; - All major projects are reviewed every year, with a report to be published setting out details of progress; - An asset management strategy is developed to maximize the useful life of public infrastructure assets. For more information The complete Framework can be downloaded from the Ministry of Public Infrastructure Renewal website at www.pir.gov.on.ca. A hard copy is available by mail by calling 1-800-239-4224. www.pir.gov.on.ca Backgrounder ------------------------------------------------------------------------- NEW INFRASTRUCTURE FRAMEWORK - FINANCING STRATEGIES Financing strategies It is estimated that more than $100 billion will be required for investments in provincial public infrastructure over the next 30 years. The government has identified several sources for these investments alone, including: - Direct grants from the provincial capital budget, which is $3.3 billion this year, an increase of 17 per cent over the previous government's allocation; - Federal-provincial shared cost programs like funding for GO Transit and the TTC, and the Canada-Ontario Municipal and Rural Infrastructure Program; - Pooled financing and low rate loans to municipalities and other public sector partners through the Ontario Strategic Infrastructure Financing Authority; - Public and private sector partnerships including investments from pension funds and others, under certain conditions; - New local government investment tools, such as gas tax; and - User fees, where appropriate and regulated. Other innovative methods of financing public infrastructure are also being introduced. The government has established the new Ontario Strategic Infrastructure Financing Authority to help its public sector partners finance infrastructure investments through the use of Infrastructure Renewal Bonds. Many municipalities are expected to use these to finance construction of improved water treatment systems. The Ministry of Public Infrastructure Renewal will also create a Centre of Excellence to promote innovation and best practices in infrastructure financing, procurement and project and asset management. Improvements in planning and managing public assets will also help reduce the immediate need for investment. For example, the more compact forms of development included in the growth management plan for the Greater Golden Horseshoe could reduce infrastructure investment by 20 per cent, and better management of public assets will extend their useful life and delay the need for new facilities. Amortization of public assets so they are paid for over their entire useful life, rather than traditional 'up-front' funding by governments, also reduces the need for immediate investments. Some agencies are already using alternative financing arrangements: - Toronto's University Health Network issued bonds to finance capital improvements to hospitals and laboratories; - Bonds worth more than $2 billion have been issued on behalf of Ontario school boards to help restore schools and build new classrooms; and - Casino Niagara was built and financed by a private company, and sold as an operating facility to the Ontario Lottery and Gaming Corporation. www.pir.gov.on.ca Fact sheet ------------------------------------------------------------------------- WHAT OTHERS ARE SAYING ABOUT BUILDING A BETTER TOMORROW: AN INFRASTRUCTURE PLANNING, FINANCING AND PROCUREMENT FRAMEWORK FOR ONTARIO'S PUBLIC SECTOR "The new financing framework and the government's intention to develop a 10-year capital plan are important steps in getting on with the job of rebuilding Ontario's aging infrastructure." Andy Manahan, Development Promotions Representative Universal Workers Union, Local 183 "This is an essential and timely plan to fundamentally improve capital planning and financing in Ontario. It provides an ideal platform to help advance the government's transformation agenda for health care." Hilary Short, President Ontario Hospital Association "The financing and procurement framework sets the stage for both traditional and bolder and more innovative approaches to tackling the infrastructure deficit. The framework will also help the government get the best value for taxpayers from its infrastructure investments." Don Drummond, Senior Vice President and Chief Economist TD Bank Financial Group "The framework, coupled with a solid financing strategy and a multi-year capital plan, sets the stage for the most serious and comprehensive plan to re-build Ontario we have seen in 30 years." Patrick Dillon, Secretary Treasurer Ontario Provincial Building Trades Council "Investing in infrastructure will strengthen our cities, towns and local businesses. We are pleased to see a provincial infrastructure renewal plan with sound business practices and financing strategies." Len Crispino, President and CEO Ontario Chamber of Commerce For more information The complete Framework can be downloaded from the Ministry of Public Infrastructure Renewal website at www.pir.gov.on.ca. A hard copy is available by mail by calling 1-800-239-4224.For further information: Ross Parry, Minister's Office, (416) 325-1657; Bill Dampier, Communications Branch, (416) 325-1082