Manitoba may abandon PC plan to build schools using P3s

Premier Wab Kinew says Manitoba will probably abandon a Progressive Conservative plan to build nine schools through a public-private partnership.

"Yeah, I think that's right," the premier said in an interview last week, adding he fears the plan would add to Manitoba's deficit.

"Instead of paying that off with a mortgage, you have to pay it all up front with the P3 model, right? So that's a big cost. But we know that schools are needed. We have to build more schools to meet the needs of the population. So we're trying to plot out a careful plan that's responsible financially, that is going to make sense for how we get these schools."

Public-private partnerships, which are sometimes called P3s, are funding mechanisms where governments enlist a private-sector company — or a consortium of private companies — to design, build, finance or maintain public amenities.

P3 payments are typically paid out over many years, not up front. These funding mechanisms can prove beneficial for governments that are able to lock in design, construction, financing or maintenance costs over the course of decades and, as a result, insulate the governments in question against against high inflation and other unpredictable factors.

Conversely, P3s can end up costing governments more than conventional construction projects when inflation is low, or if the P3 contracts are written without enough detail to cover contingencies like costly changes to construction plans.

In March, Manitoba's former Progressive Conservative government committed to building nine new schools over four years using a public-private partnership.

Proponents say the benefits of these partnerships can include cost savings and the private sector assuming all the risk. P3 schools in other jurisdictions, however, have faltered because of mismanagement and a lack of checks and balances.

In 2018, the former PC government rejected a plan to build schools under this model, saying it was too costly. Earlier this year, however, the Tories said the agreement would save money and the schools would be built faster as a developer can quickly shift workers from site to site.

The Tories planned to finish the nine schools by 2027. Five were planned for English-language school divisions in Winnipeg: two K-8 schools in Pembina Trails, two in Seven Oaks and one more in River East Transcona.

The other planned schools were a K-12 French school in the Franco-Manitoban School Division, a K-8 school in Brandon School Division and vocational high schools in both Beautiful Plains School Division and Seine River School Division.

The future of these P3 schools seemed in doubt in November when Kinew asked NDP Education Minister Nello Altomare to bring in new "P3 accountability legislation to protect schools."

The province has already issued a request for companies qualified to conduct the work but had not selected any companies to do the work, said Wayne Ewasko, education critic for the Progressive Conservatives.

He said if Kinew truly intends to cancel the program, he better tell Altomare a school in his constituency isn't going ahead.

Ewasko also questioned the logic behind Kinew's rationale for killing the program.

"For him to say anything in regards to the finances on the P3s absolutely makes less than zero sense to me," Ewasko said.