Doing Business in Canada: Infrastructure Opportunities in Canada

by Bennett Jones LLP

Infrastructure development has helped define Canada. Currently, Canadians lead the world’s infrastructure development projects. The infrastructure required for resource development projects such as the oil sands are some of the largest projects undertaken in the world today.

Public infrastructure development and redevelopment have gained prominence in Canada (as in other western democracies) where infrastructure deficits have arisen as a result of years of under-spending on public infrastructure projects.

Public-Private Partnership (P3) models have been embraced by most Canadians with minor variations. Roads, bridges, hospitals and other public infrastructure have been developed by private sector proponents under design-build finance maintain structures with a long-term concession period of 25 to 35 years.

Public/Private Partnerships

Canada has embraced the public/private partnership model for procuring public infrastructure assets. The federal government, through P3 Canada, and many provincial governments, through provincial agencies, have endorsed and promoted public/private partnerships as a means of addressing the growing infrastructure deficit resulting from many years of inadequate expenditures on maintenance and refurbishment.

P3 Canada

P3 Canada’s mandate is to encourage P3 projects across the country led by a province, territory, municipality or First Nation by providing advice and financial support. The P3 Canada Fund (administered by P3 Canada) is a merit-based program, designed to incent consideration of P3s in public infrastructure procurements to achieve value for taxpayers and other public benefits. Each infrastructure project considered by the P3 Canada Fund must contribute to one of the following: fostering economic growth; supporting a cleaner environment; and/or promoting stronger communities.

P3 Canada closed its second round of financings from the P3 Canada Fund on June 30, 2010, with 68 proposals received for projects across Canada in water or wastewater projects; energy or green energy projects; and transportation or transportation-related projects. More than half of the projects were lead by municipalities and 12 of these projects were First Nations projects. P3 Canada is now working on its third round of financings from the fund.

Provincial Organizations

The provinces – led by British Columbia and Ontario – have turned to P3 financing to procure their infrastructure requirements. Ontario styles P3 as alternative finance and procurement (AFP) and channels provincial spending on infrastructure through the Ontario Infrastructure and Land Corporation (Infrastructure Ontario), a Crown corporation. The province is currently procuring the sports venues for the 2015 Pan Am Games through a series of AFP procurements led by Infrastructure Ontario. In British Columbia, Partnerships BC carries out a similar role to that of Infrastructure Ontario.

Provincial infrastructure organizations have procured social infrastructure including hospitals, jails, courthouses and highway infrastructure in Ontario, Québec and British Columbia, and schools and highways in Alberta and the Maritimes. In the Province of Québec, the Centre hospitalier de l’Université de Montréal reached financial closing in June, 2011 on a $1.973-billion new hospital in Montreal.

Alberta and Nova Scotia have both completed P3 procurements of bundles of school buildings packaged into single P3 projects.

Ontario has utilized a form of AFP structure that does not include any operational or maintenance phase under the style “build finance.” The build-finance program was used to catch up on a back log of designed and tender-ready project work that had been deferred.


Financing for P3 projects has typically been provided by foreign banks and pension funds with an appetite for longer term bonds. Canadian banks participate in shorter term construction financing but have no appetite for the longer term bonds issued by P3 projects. Canadian banks will partner with funds to facilitate bank financing through construction and longer-term privately placed bond financing for the operating term. The project vehicle is usually a limited partnership structure with equity investment from project proponents and pension funds.


The usual process for the provincially lead procurement process begins with a request for qualifications (RFQ). Proponents pre-qualify with teams including construction, operations and financial players. The authority selects a short list of three pre-qualified proponent teams and moves to a request for proposals (RFP). The RFP will include an extensive project agreement and will require each proponent team to submit a financing solution. If selected, the proponent team will be expected to execute the project agreement and achieve a commercial close, immediately followed by a financial close within a 30-day period.

Payment mechanisms in social infrastructure have been based on an availability payment concept. Market testing has been included to recalibrate operating costs periodically over the concession term. No Canadian jurisdiction has introduced a statutorily prescribed form of P3 procurement model.


Currently, Canada enjoys a robust pipeline of P3 projects. P3 markets are expanding with the entry of municipalities and other smaller, domestic government units as well as the increasing participation of international funders and construction companies. The trend away from a dependence on a requirement for long-term financing that was in limited supply is now reversing. Milestone payments and substantial completion payments introduced to alleviate the funding constraints resulting from the recent financial crisis are becoming less common.

Bennett Jones Public Infrastructure Projects Group

The Bennett Jones LLP Public Infrastructure Projects Group has led the development of Canadian P3 and AFP models. Our Group has unparalleled construction project expertise that was earned on some of Canada’s most complex projects. We couple our international construction practice with leading public and private project finance expertise and experience, structuring public sector infrastructure procurement for multiple levels of government and acting for teams successfully delivering public infrastructure as well as their advisors, investors, lenders and team members.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Bennett Jones LLP | Attorney Advertising

Written by:

Bennett Jones LLP

Bennett Jones LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.