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Doing so requires the business community to engage with the Department of Foreign Affairs, Trade and Development and EDC in the effective design and implementation of the government's new initiative. Done well, this initiative could leverage Canada's strengths in finance, natural resources, infrastructure construction and engineering to catalyze private investment that will accelerate the global push toward the United Nations' Sustainable Development Goals (SDGs). The initiative could also build on the skills and experience of Canada's large immigrant communities to strengthen trade and investment links with emerging and frontier markets - countries that are now responsible for the lion's share of global growth, but where Canada's business presence is tiny.

Senior fellow at the Jeanne Sauve Foundation and visiting scholar at Massey College in the University of Toronto. He tweets at @BrettEHouse. In its 2015 Economic Action Plan, the federal government announced its intention to create a $300-million, five-year "development finance initiative" to partner with private capital to create growth and jobs in low-income countries. The budget document anticipates that this initiative - to be located within an expanded Export Development Canada (EDC) - will provide a mix of financing, technical assistance and business advisory services to enterprises operating in line with the government's international assistance priorities.

As outlined in a submission to Parliament last summer by the Centre for International Governance Innovation and Engineers Without Borders, the experiences of Canada's G7 counterparts offer some important lessons for Ottawa's initiative. An effective initiative should address market failures; that is, it should fill gaps in the financial system that prevent good projects, sound businesses and effective entrepreneurs from obtaining the financing they need on reasonable terms. A classic example would be the situation of new immigrant entrepreneurs: They know their former countries well, they are ideally placed to build links between Canada and their birthplaces, but their lack of Canadian credit history makes it difficult for them to gain access to affordable borrowing to grow their businesses. Ottawa's new initiative will need to be empowered with a full range of financial tools - a variety of lending instruments, a mandate to take equity positions, the ability to write guarantees, the option to underwrite insurance products - that it can tune flexibly to take projects from their early days to full bankability.

It needs to be risk-loving and clear-eyed about the fact that some projects will fail, and maintain a long horizon on investments that typically take many years to pay out returns and development impact. This new development finance initiative should also embrace open competition. The most successful DFIs work with the most effective firms on the most innovative projects.

They're not limited to working with their own nationals. Both Canada and developing countries will benefit most if this initiative is made accessible to the best people, ideas and execution. Finally, Canada's new development finance initiative needs to take poverty reduction just as seriously as profit generation. Most other DFIs do this imperfectly, at best; some don't even monitor the impact of their projects on development. This makes no sense. Development is good for business and business can be good for development.

Five years from now, development gains will be just as important as profits in making the case for renewed funding of this initiative. All these lessons need be adapted to both the needs of Canadian business and Canada's specific development objectives. The Canadian Chamber of Commerce and Canadian Council of Chief Executives have both been important supporters of this project. Now it's time for the businesses that stand to benefit directly from this initiative to get involved ensuring its success.

Thus the board's justification for putting him on contract to provide advice on projects: "The former CEO has specialized knowledge and experience with partnerships solutions." Still, the Partnerships brass were not oblivious to the conflicts that might arise if Blain were retained as a consultant on a project that was also being vetted by the board.

"In order to mitigate the risks of any conflict of interest arising from this arrangement," the review reported, "the board chair was required to recuse himself from any meetings where his projects or his contract were being discussed." Instead, another member of the board was designated to serve as temporary chair. The designated lead director also oversaw the authorization of Blain's consulting contract. "While this conflict of interest issue appears to have been generally well managed," the finance report went on to say, "there could be the perception by some stakeholders that the contractor role still conflicts with the board chair's role of providing independent oversight." Any such perceptions were history by the time the report was completed in July 2014. Blain had already departed as board chair earlier in the year, replaced by Dana Hayden, a former deputy minister turned private consultant.

The internal auditors didn't let Partnerships entirely off the hook for tolerating the unorthodox arrangement in the first place. "The government should consider reinforcing the conflict of interest guidelines for board members of crown corporations and government agencies and ensure that those guidelines are appropriately followed." In other words, "not guilty, but don't let us catch you doing it again." The audit findings, including recommendations to rectify other questionable procedures at Partnerships BC, were forwarded to a steering committee of government and industry representatives, chaired by deputy finance minister Peter Milburn. The committee reported back to Finance Minister Mike de Jong on Oct. 23 with further recommendations for tightening up procedures at Partnerships.

De Jong released both reports and accepted both sets of recommendations in the course of announcing the change of direction for Partnerships BC on Dec. 16 of last year. That was the same day the Liberals chose to announce they were greenlighting construction of a hydroelectric dam at Site C on the Peace River. Just one of those amazing coincidences, but it goes some way to explaining why there was relatively little reporting of the findings regarding Partnerships BC.

There matters stood until this week, when the New Democrats, drawing on a wealth of material gathered by their research department, challenged the Liberals over Partnerships' dealings with Larry (Two Hats) Blain. The highlights package: The contract with Blain's delightfully named consulting firm, Aardvark Insights, was worth $219,000. During that same four-year span he also collected $188,836 in fees and expenses as chair of the board. All this atop the $264,000 he was paid to serve as a director of three other government-owned corporations, and the almost $4 million he was paid for his eight-year service as CEO.

"There's plenty of Blain to go around," quipped one press gallery wag as the New Democrats built their case against the Liberals during question period Wednesday. Another joke making the rounds rebranded P3s as B3s, for "Blain, Blain and Blain" Responding for the government, de Jong paid tribute to Blain's well documented contributions to the agency and cited the audit findings that "the conflict issue appears to have been generally well managed." But he also said this: "Whilst one can suggest that by recusing and taking (other) steps ... the procurement process is properly followed, the standard that we set and expect of agencies, the leadership within those agencies, goes beyond that. There must not only not be a conflict; there must be no appearance of a conflict." Which is as close as the finance minister came to admitting his sense of relief that when the audit branch blew the whistle on this arrangement, Blain had already left the building at Partnerships BC.

Other issues raised include: using for-profit business models to deliver social programs to those who need them most; promoting profits from social ills; and the danger of stable, long-term publicly funded programs being displaced by short-term, profitable initiatives.

Read CUPE’s submission to HRSDC

It is the largest public-private partnership or P3 bond financing ever in the country

Health Montreal Collective Ltd. Partnership, the specialpurpose group created to design, build, finance and maintain the facility over 38.8 years

one huge bond issue

Caisse de dépôt et placement du Québec, which bought up $408-million or 30%

Part of the difficulty attracting buyers was the credit profile of the investment. The issue was rated BBB (high) by DBRS, one notch higher than the Baa2 assigned by Moody's Investors Service Inc. Every single P3 that has been broadly marketed so far in Canada has enjoyed an A-level rating.

So what is the credit capacity in Canada for these public-private partership deals?

Scotia Capital helped open the market for P3s and particularly hospital financings with the McGill University superhospital deal in 2010. Before that $764-million transaction, P3s were mostly led in the private-placement market by the major Canadian life insurance companies.

"We literally created people following P3s at accounts like [Ontario Municipal Employees Retirement System],"

As infrastructure bonds gain wide acceptance and the number of transactions multiplies, the documentation has become more standardized. That means the amount of work needed to invest has dropped. And investments can be compared more easily.

Buyers also like the long-duration debt, the fact it's a hardasset business and that government involvement provides a strong background to the investment.

this deal is another marker in the maturing of the sector."

In a prebudget letter to Mr. Oliver, the NDP urges the Finance Minister not to delay the budget and to instead scrap the recent tax cut that allows parents with children under 18 to split their income for tax purposes. The NDP says Ottawa should cut spending on advertising, the Senate and corporate subsidies. The letter calls for more spending on health care, child care and pensions and the creation of a credit for small businesses that make new hires.

The government says it is taking a few extra weeks to release a budget in order to get a better understanding of the current changes in the economy. The price of oil has dropped by more than half since June, a development that will mean billions less in tax revenue for Ottawa than had been previously expected.

Federal Employment Minister Jason Kenney is also pledging that Ottawa can hit its target without dipping into a $3-billion contingency fund, a comment that is at odds with recent statements from Finance Minister Joe Oliver, as well as analysis from several private-sector economists. The messaging from the government is shifting quickly in the face of growing signs that current, dramatically lower oil prices will be around for some time. The Bank of Canada will release its quarterly Monetary Policy Report on Wednesday, which is expected to expand on recent warnings that prices could go lower, or remain low, "for a significant period." In a series of interviews broadcast over the weekend, Mr. Kenney said balancing the books has important symbolic value and that "it may take some additional spending restraint" in order for the government to deliver on its promise.

The 2014 federal budget reintroduced a two-year freeze on departmental operating budgets that runs through the 2015-16 fiscal year, which is when the Conservatives are promising a return to balance. The 2014 budget said this freeze would save the government $550-million in 2014-15 and $1.1-billion in 2015-16. Mr. Kenney did not explain how extending the freeze might help the government achieve its balanced-budget promise. "They spent the surplus before they had it and now they're scrambling to figure out how to make one plus one equal three," said NDP finance critic Nathan Cullen.

Economists say it makes no practical difference whether Ottawa posts a small surplus or a small deficit, given that federal finances are sound overall in terms of debt levels and longterm spending trends. But Mr. Kenney said balancing the books remains an important goal. "It's a commitment we made to Canadians in the last election," he told CTV. "It's important that, when possible, we no longer go back and borrow money to pay for government spending."

Premier Brian Pallister says equalization payments are going down, and he wants a bump in health-care dollars.

traditional government financing. Meanwhile, the consortium that built that hospital will make roughly $299 million in profits over the life of the contract.

The construction of the P3 hospital in Abbotsford, B.C., was estimated to cost $356 million but ended up costing $449 million.

In Britain, where P3s originated as public finance initiatives (PFIs), the government had to resort to bailouts of seven hospital trusts that were struggling with "crippling private finance initiative debts,"

The government provided £1.5 billion in emergency funding so debt payments could be made and hospitals could continue to provide patient care. Despite this infusion of emergency government funds, the South London Healthcare Trust that ran three hospitals was so deep in debt that the government allowed it to go bankrupt in June.

The federal government is providing funding, but they're restricting it to P3 builds." With P3s, the private-sector partner assumes the lion's share of risk in terms of financing and construction. Giroux compares the P3 model to buying a house on your credit card instead of going to the bank for a lower interest rate. He said the North Bay Regional Health Centre is a prime example.

In July, Michael Hurley, president of the Ontario Council of Hospital Unions, suggested North Bay has been hard hit by hospital cuts partly because of the province's $1-billion deal with the private sector to build, finance and maintain the North Bay Regional Health Centre. As a P3 facility, Hurley said, the North Bay hospital shoulders higher operating costs than those owned outright by the province. The hospital cuts in North Bay have probably been among the deepest in the province," he said.

Giroux raised concern about Canadore's proposal in January after the college issued a request for expressions of interest seeking a private-sector company to build, finance and operate a multi-purpose sports facility at its Commerce Court Campus. A wise person studies history to avoid repeating costly mistakes," Giroux said at that time, pointing to a report by Auditor- General Bonnie Lysyk.

Lysyk's report found that public- private partnerships have cost Ontario taxpayers nearly $8 billion more on infrastructure over the past nine years than if the government had successfully built the projects itself. The report indicated companies pay about 14 times what the government does for financing, and that they receive a premium from taxpayers in exchange for taking on the projects. Giroux suggested North Bay was learning about the costs of P3sfirsthand via cuts at the North Bay Regional Health Centre. He said the hospital was closing beds and slashing services, in no small part because of long-term P3 agreements for mortgage payments and maintenance fees."

Ontario, the province which is the largest user of P3s, has been busy already this year, having awarded preferred-bidder status to two projects: * The East Rail Maintenance Facility, being built in Whitby, about 50 kilometres east of Toronto. According to a release from Infrastructure Ontario, the facility will "support GO Transit's planned service expansion in the Greater Toronto and Hamilton Area." The contract was awarded to a multi-member consortium, with the developer being Plenary Group, Kiewit and Bird Capital. TD Securities was the financial adviser to the winning consortium. The cost of the project was not disclosed. * Highway 407 East Phase 11. This week, the Blackbird Infrastructure Group was named as the preferred proponent to design, build, finance and maintain the project. That project will extend the highway 22 kilometres further east from Oshawa to Clarington while providing a 10-kilometre north south link from the 407 to Highway 401. The cost of the project was not disclosed but construction of Phase 1 is set to be completed by year-end. Holcim and Cintra Infraestructuras are the developers on Phase 11. The original 407 Highway is one of the country's most famous roads: it was built by the provincial government, sold for double the cost because the government wanted to balance its budget prior to he 1999 election. It is now worth considerably more, and is a veritable licence to print money because no limits were placed on its ability to charge and collect tolls. Ontario seems to have learned from that decision: both Phase 1 and 11 will be publicly owned.

The final outstanding problem for the province relates to its finances. The annual deficit is a jaw-dropping $14 billion and the accumulated debt is close to $250 billion. Many of the largest projects in the last several years have been in the institutional construction category, which features schools and hospitals.

the private sector expects to win £20 billion of business from the NHS, according to the corporate finance adviser Catalyst

a few gluttonous companies—Virgin Care, Serco, Care UK—have secured dominant positions in the market

The biggest privatisations are taking place in community health services.

Local NHS bodies have already been instructed to outsource 39 types of service. Dubbed the “39 steps to privatisation,” this covers everything from autism care to wheelchair provision.

privatisation favours a few big winners over the co-ops, charities and social enterprises

Many Hospital Trusts are being pushed to the financial brink by the disastrous legacy of the Private Finance Initiative (PFI)

In a first for the private sector, in February 2012 Circle took over an entire general hospital at Hinchingbrooke in Cambridgeshire. The hospital has since fallen 19 places in the patient satisfaction rankings and its finances have worsened, forcing Circle to ask for a bailout after just six months. Despite being prepared to make a potential 20 percent cut to the hospital’s workforce, and while mostly owned by investment funds operating out of tax-havens like the Caymen Islands, Circle nevertheless vaunts its friendly-sounding business model under which doctors and nurses are given part-ownership of the company.

another controversial aspect of the Health and Social Care Act—the ability for NHS hospitals to earn half their income from private patients

revealed a tragic case where a consultant left half way through a dangerous birth to carry out a private caesarean section. The baby later died.

many of the dominant players in the new market are owned by ruthless private equity firms

the collapse of the Southern Cross care-home company

All of this comes before the most high-profile part of the Health and Social Care Act has even been fully implemented—the replacement of PCTs with Clinical Commissioning Groups (CCGs)

largely unaccountable new groups, who will in turn outsource the work to privatised “commissioning support units”

The report contains 362 recommendations, over 100 of which focus on health care

According to Drummond, eliminating the deficit by 2018 will require cutting program spending in real terms by 16.2 per cent over the next seven years. The Conservative government of Mike Harris cut program spending by 4.7 per cent in the first four years, but was forced to raise spending in the second term for a total increase of 5.6 per cent over the 8-year period.

Michael Hurley, President of the Ontario Council of Hospital Unions, says that bringing more profit motive into health-care services will be bad for quality and for costs. Speaking of the recent scandal involving Ontario's Air Ambulance service ORNGE, Hurley notes, "They gamed the system for millions of dollars of public funds. It appears as though the Liberals are willfully blind to the lessons from the ORNGE fiasco."

The Commission was prohibited from considering revenues, but a recent report from the Canadian Centre for Policy Alternatives has shown that Ontario's deficit is largely equal to the cuts to capital, corporate and income taxes under the Liberal and Conservative governments of the last 15 years.

In the last year for which calculations were available, Ontario had forgone $15 billion in revenues due to these tax cuts.

Under pressure from the New Democratic Party, Finance Minister Dwight Duncan said yesterday that he is considering delaying further corporate tax cuts.

In health care, Drummond calls for changing hospital funding to an "activity-based financing" model,

A related recommendation calls for allowing more for-profit private sector companies to provide health services, while keeping payment under OHIP.

The report also recommends moving more patients out of hospitals and into care in the community. But a recent report by the Ontario Health Coalition questions where these patients will go unless home care and long-term care are significantly expanded.

In a departure from past years, there will be no public budget hearings this year. Instead, Finance Minister Dwight Duncan is holding a series of telephone town-halls.

limiting job security provisions for unionized public sector workers

Flaherty's spokeswoman, Mary Ann Dewey-Plante, said the PBO report is essentially a discussion paper, but the government supports its calls to strengthen federal finances.

Approximately 30 per cent of the federal government's program expenditures are tied to transfers to the provinces, with those same transfers accounting for about 21 per cent of provincial and territorial revenues.

The federal government's projected shortfall would be eliminated, the study says, if Ottawa trimmed the size of annual increases in provincial health and social transfers to the rate of nominal GDP, rather than the current escalators of six and three per cent, respectively.

"We are Conservative, we know we have to get our federal house in order, but it shouldn't come at the expense of health care," said Alberta Tory Finance Minister Lloyd Snelgrove."We have to look at how we provide the gamut of services. Something has to give. We can't keep growing (in health spending)," added Snelgrove, whose government's annual health tab is roughly $15 billion.

the six-per-cent escalator

there have been no promises such an arrangement will be included in the next health accord.

There is a need to identify financing options that do not impose burdens on government budgets.

The social insurance (SI) model, common in Europe and used in Canada to finance public pensions and employment insurance, has been suggested as a way to raise revenue to improve access to non-CHA services.

This paper examines the implications of using the SI model to expand coverage to services such as pharmaceuticals and long-term care.

Duncan and Bachand were joined at a post-meeting news conference by the finance ministers from Manitoba, Prince Edward Island, Newfoundland and Labrador and Nova Scotia, who all blasted the new transfer arrangement.

He said tying health transfers to the nominal rate of economic growth starting in 2017-2018 effectively removes $21 billion from health care funding across Canada.

B.C. Finance Minister Kevin Falcon said he's happy with the five-year plan.

"The process that we saw today where the federal government comes and says this is our non-negotiable position simply is not the way to build a nation," he said.