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Private-sector billions to fund public projects

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RAINER LEIPSCHER/HAMILTON SPECTATOR

Traffic on the Toronto-bound Q.E.W.

Province to borrow for infrastructure

Hospitals, highways, transit targeted

KEVIN MCGRAN
TRANSPORTATION REPORTER

The Ontario government plans to borrow up to $3 billion from the private sector toward the $30 billion the province plans to spend over five years to build hospitals, schools and highways.

Likening it to a mortgage that helps you buy now while stretching payments over 40 or even 60 years, Public Infrastructure Renewal Minister David Caplan yesterday said his “ReNew Ontario” plan would lead to a “renaissance for public infrastructure.”

How Ontario will spend $30 billion on schools, hospitals and transport

EDUCATION ($10 billion)

  • $4 billion to school boards to address the backlog of repairs and new school construction.
  • $1.5 billion to boards for ongoing renewal of school facilities.
  • $540 million to renew university and college facilities.
  • $600 million for a major expansion of medical and graduate schools.

HEALTH ($5 billion)

  • Funding to start or complete 105 hospital projects that will expand and upgrade hospitals and build new ones.
  • Over $150 million over five years to improve cancer treatment and diagnostic facilities.
  • The number of doctors graduating will increase by 15 per cent starting in 2011-12.

TRANSPORTATION ($11.4 billion)

  • $454 million for Highway 401.
  • 22 new highway projects focused on areas with traffic and safety issues.
  • $3.1 billion invested in transit, including GO Transit and the TTC.

OTHER

  • $1 billion for clean water initiatives.
  • $600 million for new Ontario affordable housing.

Caplan said years of neglect have left the province with a $100 billion infrastructure gap. And with the population expected to grow by four million over the next 25 years, he said the time has come for repairs.

“We have to make sure we have the schools, the hospitals, the highways, the public transit … and wastewater systems these people will require,” Caplan said.

By 2010, Ontario will spend more than $30 billion on public infrastructure, including:

  • $5 billion for health care, including 105 hospital projects.

  • More than $10 billion to improve education facilities.

  • About $11.4 billion to improve public transit, highways and border crossings.

Of the total, the Greater Golden Horseshoe, from Peterborough to Niagara Falls, will receive $7.5 billion, including:

  • $4.1 billion for improvements to GO Transit, the TTC and other local transit.

  • $1.6 billion for 40 hospital projects.

  • $600 million for courts, jails and other justice facilities.

Conservative Leader John Tory criticized the plan as light on specifics, such as which hospital projects are proceeding, and a rehash of old announcements.

“I’m not very impressed they’ve tried to pass off these old announcements as new plans,” said Tory. “There’s much less to this than meets the eye.”

Caplan acknowledged most of the projects had been previously announced, but said his ReNew Ontario program identifies changes to accounting methods and guiding principles for approving project funding and finding private partners.

Caplan said the government will now amortize assets over their lifetimes, rather than pay for them all at once. The cost of a $100 million building, for example, could show up on the province’s books as annual expenditures of $2.5 million over 40 years.

As for guiding principles, he said public need and public ownership would always be paramount.

But he added that leveraging private-sector investment — perhaps from pension funds interested in long-term results — provides a means to quickly begin modernizing hospitals that average 40 years of age, schools and highways.

NDP Leader Howard Hampton accused the Liberals of privatizing public infrastructures “by stealth.” He argued private-sector companies demand big profits and have higher borrowing costs.

The plan borrows from a U.K. model. Caplan said 88 per cent of works projects with private sector involvement in the U.K. were on time and on budget because the private sector was on the hook for cost overruns.




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