Finicky Fed Funding

Is a P3 plant the only way to get some sweet sewage simoleans?

by Paul Dechene

Next month, Reginans will choose how to build their new waste water sewage treatment plant1. The City supports a P3 model, which includes substantial involvement with the private sector, while critics want a traditional publicly built facility. A referendum is scheduled for Wednesday, Sept. 25. Over the next several issues, Prairie Dog will report on this gripping battle for the future of city sewage’s soul.

One of the key arguments in the waste water sewage treatment plant debate is that the only way to get federal funding for this project is to go with a public-private partnership. Vote “Yes” on the referendum and you’re voting “No” to $58.5 million in federal infrastructure funding from the P3 Canada Fund. And what’s worse, you’re saying “Yes” to paying as much as $270 more a year on your utility bills.

Or so the billboards, advertisements and automated calls have been telling us ever since council — which wants to use a public-private partnership, or P3, to build the new facility — voted to hold a public vote on the waste water sewage treatment plant after receiving a petition with over 24,000 signatures.

But what if that isn’t the case? What if there is another source of federal funding out there that could support the plant’s redevelopment? That would certainly undermine one of the key planks in the “No” side’s platform.

Erin Weir is an economist for the Steel Workers Union and a former candidate for the leadership of Saskatchewan’s NDP, and that’s exactly what he argues in an e-mail to us:

“Is the choice really between a P3 or no federal funding? In March, the 2013 federal budget announced ‘$14 billion for a new Building Canada Fund’ that does not require P3s. It identified municipal wastewater projects as being eligible.”

A tantalizing possibility. In the past, that Building Canada Fund — which was supposed to end in 2014 — has been used to build a water treatment plant in Yorkton and even hockey rinks at Evraz Place here in Regina.

However, Mayor Michael Fougere doesn’t see the new Building Canada Fund as an option.

“That doesn’t come into play until the current Building Canada Fund is finished and that doesn’t happen until at least 2014,” says Fougere. “So we’re looking well into the future. And we do know part of the funding for that [new Building Canada Fund] is any project that is over $100 mil must be screened for P3.

“This is a different program now, and that was then [and] this is now. They will not fund a [non-P3 plant]. That’s one of the reasons why we went for a public-private partnership to begin with — we access a quarter of the cost of the project from the federal government.”

Fougere might be right. According to the federal government’s announcement about the replenished Building Canada Fund, it does look like the rules have changed: “The new plan will encourage greater involvement of the private sector in the provision of public infrastructure and ensure better value for taxpayers. Projects with capital costs of over $100 million under the new Building Canada Fund will be subject to a P3 screen to determine whether better value for money can be achieved through P3 procurement.”

“Sure, but there’s a big difference between having to go through a ‘P3 screen’ and having to be a P3,” counters Weir in an e-mail interview.

He also notes that if the “Yes” side is successful and scuppers the city’s P3 plan, that referendum result could factor into the feds’ calculations when they’re deciding whether or not to provide funding from the new Building Canada Fund — although, Weir concedes, the government has yet to release details about the screening process.

“Perhaps more importantly, a ‘Yes’ vote would give the City of Regina a strong political mandate to negotiate a better deal with the federal government,” he says.

[hr]

1. Wasn’t too long ago that council insisted we call it a Waste Water Treatment Plant. Quite the mouthful, so no one’s too sad to see them drop the euphemism. As soon as the referendum was announced, council quietly switched to Sewage Treatment. “This isn’t about the private sector managing public water,” they say. “It’s about sewage.”

2013-08-22

3 thoughts on “Finicky Fed Funding”

  1. There is something else Mayor Fougere isn’t telling the public in their campaign materials. The $270 dollars a year is only for 4 years. If in the same way you amortized this over the 30 years of the P3 contract, this amounts to $36 a year to cover off the loss of the federal $58.5 Million dollars. So on one hand, he is trying to scare the public into saying too expensive to not take the federal money, while in other cases like the recycling fee, $95 dollars a year is affordable.

  2. Lobby the federal govt to repeal the P3 funding initiative and not attach strings to the money.

    I hope the referendum is successful. Maybe then city council can look at doing the public public partnership and controlling spending on their own project. After all, Fougere did state that “70% of all public buildings go over budget”. Oh? Really? Why is that?

  3. Thank you guys, once again, for being the ONLY MEDIA OUTLET in Regina to report on this very obvious concern that should have ben addressed by the “mainstream” media long ago. Say, way back in February 2013, when Council voted in a P3. WHY are they (The City and the “mainstream” media) so afraid to ask (and publish) the truly hard questions? I think Mr. Dechene and the Prairie Dog deserve much more respect from City Hall than they currently get, because they definitely keep them on their toes! If it weren’t for PD and CBC, we’d all be led to believe this City is all roses and there is absolutely no questionable actions going on in our City at all.

    One challenge I do have for you though. And I will GLADLY share with you what I know now – When are you going to do a full page article on the Fiacco & Company Land Annexation dealings? I know you are the only publication that will touch it, and I hope, hope, hope you are willing to take what I can give you and run with it. I will tell you that I have at least one other reporter that seems willing to work on this angle, but since his employer is one of the “mainstream” outlets, it may have to be a “Mr. X” contribution from him.

Comments are closed.