Public-Private Partnership in Canada

Public-Private Partnership in Canada
The case of PPP in Social Housing Sector
Introduction: What is Public-Private Partnership?
According to John Loxley (2010: 2), private public partnerships, or P3s, are described as “any kind of arrangement that entails the involvement of the private sector in some element of the provision of public infrastructure and services.” In a paper released by Partnerships – British Columbia (2003: 2), a company owned by the province, P3 is defined as “a legally-binding contract between government and business for the provision of assets and the delivery of services that allocates responsibilities and business risks among the various partners. Since the inception of P3s, this has been contested by its critics arguing that empirically observable transactions and operations hardly show any risk sharing or transfer, among others. It is in this light that this paper will analyze PPP or P3 projects in the Canadian public sector. The advantages and disadvantages of P3 will be outlined that will serve as the basis in analyzing the provision of social housing in this country.
It is argued that the logic behind the establishment of non-service types P3 projects is to enable the public sector “to meet its responsibilities for the provision or rehabilitation of infrastructure without the up-front capital outlay and risk that accompanies conventional methods of procurement” (Loxley, 2010: 3). In Canada, a key reason in the adoption of P3 as a government policy is the so-called “infrastructure gap” (Loxley, 2010; Dutil, et al., 2010) or “infrastructure deficit” (CUPE, 2011). This phenomenon will be described in the succeeding sections of this paper. Infrastructure gap refers to the disparity between government expenditure and the ability of the government to finance and sustain public service provisions. Thus, neoliberal fiscal policies such as budget constraints and reductions in social spending became a viable option. The contracting-out of social services has been in practice for decades now but it was only in the 1990s that P3 became the policy options of governments to maintain the provision of services.
Neoliberalism and PPPs: A brief background
The beginnings of PPPs coincide with the increasing dominance of the neoliberal ideology in the international economic and political landscape in the 1970s and 1980s. According to David Harvey (2006: 7), the extent of the influence of this ideology is clearly apparent to what has become the “neoliberal state” which is predicated on the notion that the crises of stagflation that occurred during the said decades was due to the increasing power of the welfare state. This was the period when rapid accumulation of public debt prompted the governments of countries around the world to regulate government expenditures and manage capital expenditures. The macroeconomic quagmire during the said decades prompted the government to adopt alt...