The 6th Annual Project Finance presentation, Ontario Innovation in Infrastructure Finance Forum, in conjunction with Infrastructure Ontario recently took place at the Hilton Hotel in Toronto. BLG is proud to have participated in this conference which was opened by The Honourable Mr. Glen Murray, Ontario’s Minister of Transportation and Infrastructure.

The Conference was chaired by BLG partner Heather Douglas. A session on “Debt Panel: Bottoming Out?” was moderated by BLG partner Bruce Fowler which looked at the state of the debt capital markets and implications for infrastructure projects. BLG partner Rick Shaban moderated a session on “Healthcare: Renewed Focus” which looked at the shift in procurement methods applied to healthcare and newer asset types.

In his opening address, Minister Murray encouraged members of the infrastructure finance community  to keep up with the “age of acceleration”. He said Ontario has experienced a fundamental shift from a production economy to an economy of innovation, and infrastructure and finance professionals need  to form new dynamic relationships to adapt to the evolving state of Canadian infrastructure policy. He also mentioned the Ontario government is looking for bold ideas and is ready to support aspirational designs, particularly those that utilize Canadian-sourced materials and deliver lasting aesthetic and socio-cultural benefits. The Minister challenged attendees to get people talking about infrastructure, to find ways to bring the private sector to the design table and to increase the level of innovation in our design concepts. Together, he suggested, we can make infrastructure in Ontario valuable and beautiful and by doing so, drive the economy in our province forward.

Importantly, the Conference highlighted the financial capacity available for the right infrastructure projects as well as the interest in expanding the AFP project delivery models. In fact, some speakers noted that the AFP models have gained favourable recognition in many jurisdictions outside of Ontario and the models have been extended to new asset classes in the social infrastructure, transportation and municipal sectors.

An increased emphasis on project design as a possible future direction was mentioned by Mr. John McKendrick, the Executive Vice President of Major Projects with Infrastructure Ontario (IO) who stated that IO is continuing to press forward to meet the objectives established by the Ministry of Infrastructure with efficiency. IO is in the process of analyzing 30 of its projects undertaken using the Ontario model and it anticipates publishing a report in the near future outlining the successes and challenges of the program since its inception
in 2005.

Mr. McKendrick noted that the mandate of the program has turned to new goals including the improvement of transit infrastructure, updating energy infrastructure, justice and correctional facilities and creating new jobs.

In terms of possible future financing trends, a number of speakers suggested, for a variety of reasons, including appropriate risk allocation and oversight, that the proportion of private sector financing to government funding should be in the range of at least 40% to 50%. In addition, the suggestion was made that federal and provincial funding should be provided throughout the maintenance term as well as for the construction period. As the Ontario models continue to evolve, it will be interesting to learn if these predicted trends are incorporated.

Authors

Bruce E. Fowler 
BFowler@blg.com
416.367.6194

Richard H. Shaban 
RShaban@blg.com
416.367.6262

Other Author

Heather Douglas

Expertise

Public-Private Infrastructure Projects
Construction