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Political risk: Without legislative, executive, or public support, there is a possibility of projects being cancelled by the public body or withdrawal by the private partner.Despite the benefits, these partnerships also carry a certain degree of risk and cost from a financial and reputation perspective. These types of public sector projects create opportunities for private companies looking to maximize shareholder profits over the length of the P3 contract, while delivering better value for the public sector and saving dollars. What to consider in a public-private partnership On Octothe Government of Canada announced $10 billion in spending on infrastructure initiatives such as broadband, clean energy and agricultural projects as a measure to boost economic growth and create jobs. Often in times of economic distress or downturns, such as the current global pandemic, stimulus from governments in the form of infrastructure requirements become more prevalent in our economies. Infrastructure projects often have life cycles ranging between 15 to 30 years or more, leading to sustainable job creation and economic growth. One reason for this trend could be that infrastructure projects might lead to fiscal prosperity. The Ontario Government recently announced funding for long-term care facilities while Premier Jason Kenney of Alberta said last year that "public-private partnerships are the future for infrastructure projects."Ī national opinion survey from The Canadian Council for Public-Private Partnerships in 2018 showed over 6 in 10 Canadians supported or somewhat supported P3s for new infrastructure. In Canada, our aging infrastructure in both urban and rural areas, has resulted in more infrastructure spending from provincial governments. In recent years, the emergence of smart cities has created a unique set of opportunities that cover urban growth, technology, infrastructure, and capital investment. Infrastructure needs to continue to grow as cities and towns expand and age. How infrastructure investment boosts growth
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P3s have become a critical source of funding for both the public and private sectors while offering an attractive investment opportunity for lenders. For governments, P3 offers an opportunity to invest in top quality infrastructure without creating additional public sector debt for taxpayers. The private party bears significant risk and management responsibility, and fees and profit are linked to performance. The most well-known of these projects include Highway 407 in Ontario, The Royal Ottawa Hospital, and the Confederation Bridge linking New Brunswick and Prince Edward Island.Ī P3 is a contract between a private party and a government entity for providing a public asset or service. Canada has had a successful history of public-private partnerships or P3, starting in the 1990s as governments invested in healthcare, transportation, educational and other infrastructure projects for a growing population.