P3 Schools

Private companies are building a growing number of schools across Canada — at a huge cost to the public. Revelations about unanticipated fees and charges as well as health and safety concerns have made headlines in recent years, and both the public and the government are starting to take notice.

At issue are schools that are built through public-private partnerships (or P3s), deals that pay private companies to finance and construct new buildings. In many cases, the government then pays the private company rent for use of the school. Often, maintenance of the school is also included in the contract.

Problems with maintenance and design

P3 schools in several provinces have encountered recurring problems with maintenance and design. In one Alberta school, interior temperatures often soared over 28°C because the private contractor had not installed awnings or shades on south- and west-facing parts of the building. In Nova Scotia, work that fell under the responsibility of the private company was subcontracted to regional school boards, effectively transferring the risks for maintenance and operation of the schools from the private company back to the government.

Health and safety concerns

Because private companies are focused on profit, they’re more inclined to cut corners that compromise student and teacher safety and well-being. A report from Nova Scotia’s Auditor General identified cases where key health and safety measures outlined in P3 service contracts were not followed, including: child abuse registry and criminal record checks, fire safety inspections, and emergency first aid and CPR training.

Cost overruns

Although P3s are often touted as a money-saving option, many involve cost overruns that leave the public on the hook for millions. A study from the Canadian Centre for Policy Alternatives found a lack of evidence-based decision-making for P3 deals in Nova Scotia. Debt was shifted rather than eliminated, and risk transfer was oversold and under delivered. An auditor general report from 2010 revealed that Nova Scotia could have saved $52 million by using the traditional build model instead of P3s.

Challenges and cost overruns have caused several provincial governments to take a second look at their use of P3 schools. Having already overspent millions on other P3 ventures, the Alberta government announced in 2014 that it would abandon a new public-private partnership for 19 new schools across the province – the government projected it would save $14 million by completing the work in-house.

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