Technical ReportPDF Available

Reinventing the Building of Schools: The Real Legacy of Public-Private Partnership (P3) Schools in Nova Scotia (AIMS, May 2017)

May 2017

DOI:10.13140/RG.2.2.16273.22887

Affiliation: Atlantic Institute for Market Studies/ Saint Mary's University

Authors:

Paul W Bennett

Saint Mary's University

Content uploaded by Paul W Bennett

Content may be subject to copyright.

REINVENTING THE BUILDING OF SCHOOLS

Reinventing the

Building of Schools

The Real Legacy of

Public-Private-Partnership

(P3) Schools in Nova Scotia

Paul W. Bennett, Ed.D.

Director, Schoolhouse Consulting, Halifax, Nova Scotia

Halifax, Nova Scotia

May 2017

Policy Paper

ATLANTIC INSTITUTE FOR MARKET STUDIES

REINVENTING THE BUILDING OF SCHOOLS

The Atlantic Institute for Market Studies (AIMS)

AIMS is a Canadian non-profit, non-partisan think tank that provides a distinctive Atlantic Canadian

perspective on economic, political, and social issues. The Institute sets the benchmark on public policy

by drawing together the most innovative thinking available from some of the world’s foremost experts

and applying that thinking to the challenges facing Canadians.

AIMS was incorporated as a non-profit corporation under Part II of the Canada Corporations Act and

was granted charitable registration by Revenue Canada as of 3 October 1994. It received US charitable

recognition under 501(c)(3), effective the same date.

287 Lacewood Drive, Suite 204,

Halifax, Nova Scotia, Canada B3M 3Y7

Telephone: (902) 429-1143

aims@AIMS.ca facebook.com/AtlanticInstituteCA @aims_ca

www.AIMS.ca /company/atlantic-institute-for-market-studies

Board of Directors

Chairman: John Risley

Former Chairman: John F. Irving

President and CEO: Marco Navarro-Génie

Vice-Chair: Scott McCain (New Brunswick),

Vice-Chair: Don Mills (Nova Scotia)

Vice-Chair: Leo Power (Newfoundland and Labrador)

Secretary: Fae Shaw

Treasurer: Doug Reid, FCA

Directors: Paul Antle, Laura Araneda, Lee Bragg, Dr. Robert Campbell, Stephen Emmerson,

Dr. Richard Florizone, Nelson Hagerman, Doug Hall, Dennice Leahey,

Todd McDonald, Jonathan Meretsky, Andrew Oland, Bob Owens, Peter Woodward.

Advisory Council

George Bishop, Angus Bruneau, George Cooper, Ivan Duvar, Peter Godsoe, James Gogan,

Frederick Hyndman, Bernard Imbeault, Phillip Knoll, Colin Latham, Norman Miller, James Moir, Jr.,

Gerald L. Pond, Allan C. Shaw, Joseph Shannon.

Board of Research Advisors

Advisors: Ian R. Brodie, Charles Colgan, J. Colin Dodds, Morley Gunderson, Doug May,

Jim McNiven, Robert Mundell.

The author(s) of this document worked independently, and is solely responsible for the views presented here. The opinions

are not necessarily those of the Atlantic Institute for Market Studies, its directors or supporters or of other organizations with

which the author(s) may be affiliated. Any errors or omissions remain the responsibility of the author(s).

REINVENTING THE BUILDING OF SCHOOLS

Halifax, Nova Scotia

May 2017

Reinventing the

Building of Schools

The Real Legacy of Public-Private-Partnership

(P3) Schools in Nova Scotia

By Paul W. Bennett, Ed.D.

Director, Schoolhouse Consulting, Halifax, Nova Scotia

Table of Contents

Executive Summary 5

Introduction: Innovation Injection and Rejection 7

Background Context: Why Turn to Public-Private Partnerships (P3s) for New Schools? 10

Building Too Many, Too Fast: The P3 Schools Construction Program, 1993- 2001 13

Successes and Set-Backs: Assessing the P3 Schools Record 18

Hidden Legacy: Of Education Sector Mismanagement and the Innovation Quotient 23

Who Benefited Most from P3 Schools? Net Benefits and the Public Interest 28

Summary: Lessons Learned from Nova Scotia’s P3 Schools Initiative 33

Recommendations: Building Upon the Lessons 34

References 36

REINVENTING THE BUILDING OF SCHOOLS

About the Author

Paul W. Bennett, Ed.D. (OISE/Toronto) is Founding Director of

Schoolhouse Consulting, and Adjunct Professor of Education at Saint

Mary’s University, Halifax, NS.

Dr. Bennett is a Halifax author, education professor, policy researcher

and news commentator. Prior to completing his doctorate at the

University of Toronto, Paul earned an Hons. B.A. in History and

Political Science (York), a M.A. in History (York), and a B.Ed. from the

University of Toronto. Over a career spanning four decades, Paul has

taught high school history, authored three national textbooks, headed

two leading independent schools, produced many policy papers and

written or co-authored eight books. His three most recent books

are The Grammar School: Striving for Excellence in a Public School

World (2009), and Vanishing Schools, Threatened Communities; The

Contested Schoolhouse in Maritime Canada, 1850 -2010 (2011), and

The Last Stand: Schools, Communities and the Future of Rural Nova

Scotia (2013).

Today Paul is primarily an education policy analyst and commentator,

producing regular columns for The Chronicle Herald, The Globe and

Mail, and The National Post and a variety of other publications. His

most recent academic articles have appeared in The Journal of Sports

History, Historical Studies in Education, Acadiensis, Canadian Issues,

and the Royal Nova Scotia Historical Society Journal.

Over the past seven years, he has produced major policy papers for

the Atlantic Institute for Market Studies, the Northern Policy Institute,

the Society for Quality Education, and the Canadian Accredited

Independent Schools Association. He specializes in K-12 educational

policy, education history, educational standards, school governance,

teacher education, and special education services.

Currently, Paul serves as Chair of the Board of the Halifax Regional

Library Board, and Vice Chair of the Board at Churchill Academy, a

Dartmouth school for students with learning challenges.

About the Author

REINVENTING THE BUILDING OF SCHOOLS

Executive Summary

The current research report, Reinventing the Building of Schools, seeks to dispel the

enduring myths associated with Nova Scotia’s foray into Public-Private Partnership

(P3) schools from their inception in the mid-1990s until the present. With the 20-year

P3 school contracts expiring over the next few years, it seemed to be an opportune

time to take stock of the successes and shortfalls, to assess the real value of the whole

initiative, to identify a few public policy lessons, and to suggest a few ways to build

upon the P3 schools legacy in school planning, innovation, and management.

Public criticisms of the P3 school deals have been overstated and amplified by

politically-driven research which makes little or no reference to the later participation

of OMERS, a major Ontario union pension fund. The critical issue is not whether the

province should purchase or “buy-out” the private contractors or not, but how we

can sustain the innovative impulse unlocked by the first generation of P3s – nurture

the innovative ideas, re-capture entrepreneurial spirit, and move ahead with a more

flexible, integrated and responsive school building process.

Recent public revelations about “queue jumping” in the N.S. school construction

approvals process also suggest that political interference in deciding where schools

are built or renovated is a public issue of considerable concern. Building upon research

conducted for this policy paper and the lessons gleaned from recent Nova Scotia

Auditor General reports, I suggest that the Government of Nova Scotia, the Department

of Education and Early Childhood Development, regional school boards, and potential

private sector partners consider and act upon the following recommendations:

1. Make school capital planning a higher priority of the government and initiate a

multi-year school construction and renovation planning process.

2. Establish a Capital Asset Management Framework (CAMF) and expand the range of

strategic options from public procurement to alternative service models. End the

current counterproductive division of responsibilities in school planning between

the department and school boards.

3. Build upon the foundation laid by public-private partnerships by establishing

“Partnerships NS,” as a P3 advisory committee, tapping into entrepreneurial

innovation.

4. Expand the network of school-level facilities management teams from P3 schools

to regular schools, as a demonstration of community engagement.

REINVENTING THE BUILDING OF SCHOOLS

5. Conduct a comprehensive audit of the P3 school planning and management venture

assessing the hard lessons, community impact, costs and benefits to the public.

6. Develop a new set of provincial guidelines for identifying P3s, including clear

performance standards and criteria for selection.

7. Establish criteria for evaluating progress in reinventing school planning and

management process, drawing upon the latest research in public sector

management, including value-for-money (VfM) analysis and P3 screening.

REINVENTING THE BUILDING OF SCHOOLS

Introduction:

Innovation Injection and Rejection

“We believe P3 models are largely misunderstood and often misrepresented in pub-

lic discussion….”

— Paul LaFleche, Deputy Minister of Transportation and Infrastructure Renewal, Testimony,

Public Accounts Committee, Nova Scotia Legislature, January 25, 2017.

Nova Scotia’s Public-Private Partnership (P3) schools have attracted more than their

share of “scare stories” since their inception two decades ago. The first ventures,

graphically symbolized by the new Horton High School in Wolfville, NS, tagged the

“Taj Mahal,” built at a total cost of over $30-million, cemented in the public mind the

image that private-public partnerships drove costs up, exemplified lavish spending,

and enriched private developers (Sheppard 1998). In December 2015, the public

reputation of P3 schools took another hit. An Access to Information release obtained

by the Nova Scotia Government and General Employees Union (NSGEU) rolled out

some big cost figures: the total inventory of 39 public-private partnership schools,

over 20-years, would cost provincial taxpayers at least $726-million, including $47.2

million for Horton H.S., representing $400 million in total principal and $326 million

in interest payments (Gorman 2015).

News reports highlighted the enormous costs, with no reference whatsoever to

comparable estimates for public procurement alternatives. The Canadian Centre for Policy

Alternatives (CCPA) seized on the cost figures, warned that the numbers could ultimately

reach $1-billion, and recommended that the government exercise its “buy-out” option

when the 20-year leases began to expire, starting in June 2016 (CCPA-NS, 2016).

The massive experiment with P3 schools in Nova Scotia from 1996 to 2001 was a

period of radical innovation in school construction with difficult-to-assess results. Over

the course of the first six projects, the province and the private developers essentially

reinvented school design, building, and management to break the traditional mold

and inject a little private sector entrepreneurial spirit into the rather formulaic public

capital procurement process (NS, PAC Hansard 2017; McCulloch 2017). A Nova Scotia

Auditor General’s report in 1998, focusing on the first school completed, O’Connell

Drive Elementary School in Porter’s Lake, NS, found the province’s decision to classify

the lease agreement as an operating expense instead of a capital lease to be unjustified,

and dealt a fatal blow to the rather “dodgy” plan to transfer the debt for school

construction “off-book” in the province (Auditor General 1998). In the absence of a

REINVENTING THE BUILDING OF SCHOOLS

reliable public sector comparator, critics of P3s feasted on the revelations. The public

reputation of such projects never really recovered in Nova Scotia and far beyond, in

other provincial school jurisdictions.

Lost in the ongoing public debate over P3 schools was any real reference to the ultimate

success and positive impact of the thirty-nine P3 schools for students, parents, school

boards, and local taxpayers. Nor was there any recognition of the exciting possibilities

for “reinventing government” unlocked by the P3 “big bang” in Nova Scotia. The

purpose of this research report is to re-assess the actual Nova Scotia experience with

P3 schools and to right the balance. It demonstrates that, under certain circumstances,

public-private ventures, effectively monitored and managed, can be an innovative and

sensible means of achieving desired public purposes.

From the outset, the Nova Scotia P3 schools initiative was attacked as a “privatization”

scheme that threatened to subvert public education (Dobbin 2002; Shaker 2003). Most

of the more authoritative, independent analyses recognized it as “a cautionary tale,”

but (at the same time) critical in closing the education infrastructure gap (Deloitte

Research 2006, 24). Scaling back the original plan to build 55 such schools in 1999

made good business sense because of evidence of “a variety of political and other

problems, including cost overruns driven by project “gold plating” (i.e. increasing

school standards, expensive site selection), weak government management, and

problems with the contract terms” (Meek 2001). Few dispute the fact that the P3

school program allowed the province to bring far more new schools into operation.

In fact, by 2006, privately-operated schools accounted for about 14 per cent of the

total square footage in the province’s schools (Deloitte Research 2006, 24). Despite

the scare stories, the only value-for-money study of Nova Scotia’s P3 school building

program, conducted in 1999-2000 by KPMG, was unable to answer the key question

of whether the P3 schools actually cost more than those that would have been built

by conventional public procurement means (KPMG 2000; PAC, Hansard 2003).

Leading critics of P3 schools simply dismiss such contradictory research findings and

persist in claiming that the whole venture was a “bad deal” for Nova Scotians. In June

of 2016, the Canadian Centre for Policy Alternatives (CCPA-NS) issued a summary report

on Nova Scotia’s Public-Private Partnership Schools (P3s), entitled Private Profit at the

Public Price, that attempted to bury one of Atlantic Canada’s most adventuresome

forays into reinventing the building of schools. “The P3 schools program in Nova

Scotia,” the CCPA-NS media release declared, “was a failure that cost Nova Scotians

tens of millions more than the traditional system procurement system.” With the

twenty-year leases on thirty-nine P3 schools expiring, it claimed that “buy-out” was

the only option to put an end to the whole venture (CCPA-NS 2016).

REINVENTING THE BUILDING OF SCHOOLS

Nova Scotia’s rather grand experiment with P3 schools two decades ago is now

coming to an ignominious end. Since August of 2016, the Province has, in stages,

retreated from leasing schools and announced that it would be purchasing most of

the 39 schools constructed in the late 1990s under successive Liberal and Conservative

governments. With the 20-year initial leases expiring, the province is preparing to pay

millions of dollars more to extricate itself from the school capital finance partnerships.

By March of 2017, the total cost of buying-out the P3 schools totalled an additional

$149.8-million (Flinn 2017) and will be added to the provincial debt in 2020 (Flinn

2016).

Big decisions are, once again, being made in haste, according to N.S. Auditor General

Michael Pickup, and serious questions arise about how and why it has happened. That

June 2016 CCPA report was doubtless timed to tip the balance in favour of a total

buy-back of the leased assets, at a time when the province is already burdened with a

$16-billion debt. Two reports by successive Nova Scotia Auditors General, in February

2010 and in November 2016, tilt in a different direction (AG 2010 and 2016). Taken

together, the more recent AG reports tend to raise serious questions about public

sector management, providing ample evidence of poorly worded contracts, structural

disconnects, lax public oversight and ossified infrastructure management practices.

Comparing school building and operation costs of the P3s with traditional public

procurement costs is not impossible and, as shown in this report, presents a completely

different picture of the real legacy of Nova Scotia’s public-private partnerships in the

education sector.

REINVENTING THE BUILDING OF SCHOOLS

Background Context:

Why Turn to Public-Private Partnerships (P3s)

for New Schools?

“Reinventing public institutions is Herculean work. To succeed you must find

strategies that set off chain reactions in your organization or system, dominoes that

will set all others falling. In a phrase, you must be strategic.”

— David Osborne, “Reinventing Government: What a Difference a Strategy Makes”,

Global Forum on Reinventing Government, Vienna, Austria, June 2007.

Governments in the 1990s, in Nova Scotia and elsewhere, were struggling with

staggering debt, facing mounting concerns about aging school facilities, and looking

for alternatives. Entering into private-public partnerships allowed the province to

undertake a major rebuild of schools while transferring the financial risk to private

developers (NS, PAC, Hansard 2003). The appeal of private sector involvement was

broader than financial because policy-makers also sought to apply lessons learned

in private sector business to improve the performance of government in delivering

schools and related public education services. Inspired by public sector reform in

the United Kingdom, Australia and New Zealand, a “reinvention movement” made

its appearance in Nova Scotia with the arrival in 1993 of the John Savage Liberal

Government (Clancy, Bickerton, Haddow, Stewart 2000, 74-75).

The ideal of progressive reform of government services had lost its former lustre

by the 1990s, particularly among a civil service frustrated by bureaucratic obstacles

and a public increasingly dissatisfied with the delivery of services (Barzelay 1992).

Determined to close what was viewed as an “innovation gap,” a new breed of

“reinvention” reformers believed that the traditional bureaucratic form of regulatory

government would benefit from an infusion of the “entrepreneurial spirit.” Nova

Scotia Finance Minister Bernie Boudreau’s 1994 Government by Design plan echoed

the school restructuring philosophy popularized in David Osborne and Ted Gaebler’s

1992 book, Reinventing Government: “State government and school boards would

steer the system but let others row” (Osborne and Gaebler 1993, 314). An injection

of private business innovation was necessary to transform the public management

status quo where “public agencies utilize resources inefficiently,” were “stuck in out-

moded routines,” “insensitive to citizen’s concerns” and “run more for the benefit

of employees than clients” (Altshuler and Behn 1997, 4). When it came to building

schools on a massive scale, governments looked to tap into private business to

REINVENTING THE BUILDING OF SCHOOLS

develop a “flexible, dynamic, project-oriented matrix” and “organic forms of

organization” that would be superior to the traditional “mechanistic-bureaucratic

form” (Lynn, 1997, 91) commonly associated with conventional school capital

planning, finance, and construction.

The whole idea of reinventing school design, building, and management adopted by

the Savage government from 1993 to 1996 was borne of that broader “reinvention

movement” aimed at public sector reform as well as better management of public

finances (Clancy, Bickerton, Haddow, Stewart 2000, 74-75). Facing mounting

provincial debt, damaged credit ratings and a backlog of school construction, Savage

and his finance minister found an exciting new prescription in David Osborne and

Ted Gaebler’s 1992 bestseller, Reinventing Government: How the Entrepreneurial

Spirit is Transforming the Public Sector. Premier Savage and his cabinet may have

embraced radical restructuring, but they did so for more pragmatic than ideological

reasons. The problem, in Osborne and Gaebler’s words, was “not too much or too

little government but the wrong kind of government.”

In the September 1993 Throne Speech and companion budget, Savage and his ministers

committed themselves to “client-centred government.” That meant delivering public

services differently “through the eyes of those being served, rather than the vantage

point of those delivering the service – the government and bureaucracy.” His finance

minister telegraphed what was to happen: “Innovative ways to deliver programs and

services will be developed, and traditional barriers to change will be removed.” As

Nova Scotia’s “reinvention architects,” they sought to transform the “special interest

state” in health, education, municipal services, and social assistance and enlisted

Education Minister John MacEachern in a series of education reforms, including the

development of P3 schools (Clancy et al. 2000, 75).

The earliest P3 school was the Evergreen Park School constructed between 1994 and

1996 in Moncton, New Brunswick, but the new venture came under its heaviest fire

in Nova Scotia. Public sector unions opposed such agreements, fearing that they

posed a threat to union contracts, wage rates, and long-term job security (Loxley

2010, 83, 91-93). During the 1998 provincial election, the ballooning costs of the

new P3 Horton High School being built in Education Minister Robert Harrison’s home

riding became a lightning rod, when NDP leader Robert Chisholm contrasted “Robbie

Harrison’s Taj Mahal” with his own high school which had to “sell cupcakes to buy

window blinds” (Bennett 2011, 137-138). While the P3 schools did serve a purpose,

removing the school construction backlog, by the time that the Liberal government

of Savage’s successor Russell MacLellan was defeated in July 1999, defending P3

schools became politically risky in the province (Dobbin 2002).

REINVENTING THE BUILDING OF SCHOOLS

The original Liberal plan to construct fifty-five P3 schools was scaled-down to thirty-

three in 1999 by the incoming Conservative government of John Hamm. While the

new Education Minister, Jane Purves, considered P3 schools too costly with “extras

[that] taxpayers cannot afford,” Finance Minister Neil LeBlanc was more concerned by

a process “too out of control” (Meek 2001). Late in 1999, LeBlanc commissioned the

Halifax auditing firm KPMG to study the costs and benefits of P3 school construction.

The consulting firm produced a 31-page research report but was unable to answer

the central question – whether it was cheaper to build P3 schools or government-

built and funded capital projects.

“We are not in a position,” the report concluded, “to say definitively whether the

P3 projects did or did not achieve value for money” (KPMG 2000). Without access

to suitable public sector comparator, in the form of traditional school construction

projects, the consultants were unable to answer the critical question, but did propose

a few improvements in the P3 procurement process.

REINVENTING THE BUILDING OF SCHOOLS

Building Too Many, Too Fast:

The P3 Schools Construction Program, 1993- 2001

“One of the most persistent threads of policy controversy set loose by the Savage

government became known as the P3 program…Essentially this was a new ap-

proach to financing public works, made possible by the virtual disappearance of

capital budgets during the deficit crisis years.”

— Peter Clancy, James Bickerton, Rodney Haddow, and Ian Stewart,

The Savage Years: The Perils of Reinventing Government in Nova Scotia (2000).

The partnership approach adopted in establishing Nova Scotia’s P3 schools sprang

from the Savage government’s desire to bring private money and management skills

to school planning, capital financing, and operations. Facing a mounting debt and

a credit crisis, the Savage government sought private partners to raise the capital

and also sought a way of circumventing the slow, time-consuming School Capital

Construction procurement process (NS, PAC, Hansard 2003). The other reasons for

involving private developers were clear: to secure the sizable amount of financing,

tap into new management capacities, acquire access to innovative technology, and

improve public service delivery. With private developers investing their own resources,

it was believed that they would have a strong incentive to closely monitor the projects

to ensure the best possible return on their investment. Building in financial incentives

was expected to help steer and keep a check on the private contractors’ behaviour.

Under the P3 school agreements, financial incentives were aligned to require the

private partners to share in the risks and rewards, improving the likelihood of a

successful, cost-effective outcome with social gains for school systems and the

broader community. Securing that private capital for school construction with proper

incentives for cost efficiencies was intended to help keep down operational costs. The

biggest advantage of all was that P3s promised to make new school infrastructure

available much more expeditiously than conventional public procurement, with its

maze of regulations and processes (Poschmann 2003 and 2017).

Nova Scotia took the plunge into P3 school construction with considerable zeal.

Upon taking office, the Savage government confronted two formidable barriers in

school capital planning. Aging schools and a school construction backlog presented

a problem requiring some $90-million in capital costs over three years, but so did

changes in accounting standards that required the government to go “on book” for

the costs of new schools (i.e., to record the borrowing costs for new schools rather

than transferring them to the accounts of individual school boards) (AG 1997).

REINVENTING THE BUILDING OF SCHOOLS

Such a change would add another $217-million to the province’s net debt and even

more for each additional school. This would not only be politically unpalatable,

but also stymie the government’s ambitious plan to restructure the school system.

Shifting the costs to operating leases with private developers became, much to the

chagrin of Nova Scotia’s Auditor General, “the determining factor” in proceeding

with the venture (Salmon, PAC, Hansard 1998).

The Savage government found some justification for proceeding with P3s in two

supportive 1997 reports, the Department of Finance’s Transferring Risk in Public-

Private Partnerships (NS Finance 1997) and an independent consultant’s report on

P3s relating mostly to municipalities. Rightly or wrongly, the second report forecast

that public-private partnerships would – in theory – be more affordable, more

efficient, and provide better quality facilities than the traditional public sector plan-

bid-build approach (NS Finance 1997). Claiming that the province could not afford

to go it alone, Savage and his cabinet talked-up the advantages of public-private

partnerships to provide the needed infrastructure and engaged four private developers

– the Hardman Group, Nova Learning, Scotia Learning and Ashford Investments – to

build first six schools, then another 33, all over a five-year period (CCPA-NS 2016,

10). Exploring such innovations in school building was consistent with the Savage

Liberals’ bold educational restructuring agenda from 1993 to 1998 that encompassed

reducing school districts from 21 to 7, reducing the education budget from $806.5

million to $766.5 million, introducing school-based management, and establishing

school-advisory councils (Clancy et al., 2000, 158-159).

In accepting the P3 model for school construction, the Nova Scotia government

was persuaded that private sector expertise and resources could be harnessed

to address public needs. The Guide to Strategic Partnering, prepared in 1997 by

Anderson Consulting Services, not only explained the concept, but set out the

reasons municipalities should consider what were termed PPPs. Public sector bodies,

the document claimed, could expect to achieve some or all of the following benefits:

• Construction Cost Savings

• Operational Savings

• Faster Implementation

• Preserved or Improved Levels of Service

• Risk Sharing

• Financing Options

• Avoidance of Capital Debt

• Enhanced Public Management

• Greater Performance Measurement

• Increased Public Sector Revenues

• Enhanced Economic Development

• Innovative Solutions

• Realize the Value of Under-Utilized Assets

• Enhanced Facility Maintenance

• True Costing and True Value

• Arms-Length Independence

REINVENTING THE BUILDING OF SCHOOLS

The Guide also attempted to promote more private sector involvement in a wide range

of formerly public service functions, including project design, financing, procurement

and construction, operations, and maintenance. It even provided a primer on the

various forms of public-private partnering from Privatization/Design-Build-Own-

Operate (DBOO) to Design-Build-Own-Transfer-Operate (DBOTO) and everything in

between, including maintaining public operations and maintenance functions (NS

Finance 1997, 1-10).

Conventional Procurement

Separate phases (Design, Finance, Build,

Operate) procured separately in a “design-

bid-build” model through a series of

contracts at each juncture of the project.

Short-term agreements for tendering

specific phases of design, construction,

FF&E (fixturing) and operation.

Conventional builds utilize stipulated price

contracts or construction management

contracts with contracts for sub-trades.

Funded through public debt borrowing

at government rates through the issuing

of bonds. Limited to regular payments to

contractors based upon work completed

to date.

(Prescriptive Specifications) Public agency

specifies the exact inputs required for the

facility, but specific outputs or perform-

ance standards may not be spelled out

in the contract.

Monthly payments are normally made to

contractors based upon percentage of

project completed. Up to 90 per cent of

cost may be paid in monthly installments.

Final payment paid upon delivery of

project, after the builders’ lien holdback.

Award contracts to lowest bidders and

highly dependent upon effectiveness of

public oversight over costly design errors

and change orders.

TABLE 1

P3 Procurement

All phases (two or more) are integrated to

carry the project through from design to

build to fixturing to operation – and several

projects can be “bundled” in a comprehen-

sive series of agreements.

Longer-term contracts covering the useful

life of the asset, extending to 20 or 30 years,

covering complete services and assuming

risk. Include capital refresh sinking fund for

ongoing maintenance.

A substantial share of project cost is financed

through project-specific equity and debt.

Equity provided by consortium partners

usually makes up less than 20 per cent of

the project financing.

(Performance Specifications) Deliverables

are specified in terms of outputs, entrusting

oversight to public partner. Specified outputs

include functional design requirements, and

operational standards.

Private contractor expected to bear all the

capital costs and paid only for defined assets

or services upon project completion – in a

performance-based contract.

Close collaboration between design-build

team at all stages minimizes costly design

errors and change orders. Buildings designed

more effectively by team to achieve cost

efficiencies. Risk transferred to contractors

better able to handle risk.

Comparison of Conventional Public Procurement

and P3 Procurement

Process

Contracts

Financing

Contract Specifications

Payment Schedule

Cost Controls

Source: Adapted from Conference Board of Canada, Dispelling the Myths: A Pan-Canadian Assessment of Public-Private Partnerships

for Infrastructure Investments (Ottawa: Conference Board of Canada, January 2010), Table 1, p. 3.

REINVENTING THE BUILDING OF SCHOOLS

Public-private partnerships do offer some advantages over conventional public

procurement for major capital projects which will incur sizable publicly-backed debt.

The most successful projects are those that efficiently achieve public purposes, like the

provision of new schools, while shifting the risks and rewards between the contracting

parties (Poschmann 2003). Critical to the arrangement are contracts which provide

an acceptable level of public transparency and yet respect the proprietary rights of

private companies to structure projects, financing, and performance contracts in

ways that reduce costs and ensure a fair return on their investments. In the case of

P3 schools in the 1990s, the P3s did provide the province with access to new money,

expanded managerial skills, project management expertise, and innovative ideas for

school design and service delivery. It was also viewed as potentially preferable to the

existing public procurement model. With so much invested in a project, the province

expected and anticipated that private contractors would be more inclined than public

managers to properly monitor the construction and to more carefully monitor the

operation’s ongoing performance (Poschmann 2003 and 2017). Deviations from the

normal P3 arrangement in the N.S. education sector, such as sub-contracting back to

the school boards, was not envisaged in the original plan for Nova Scotia.

The sheer scale and scope of the Nova Scotia P3 school construction program was

staggering, especially in comparison with traditional year-to-year school capital

infrastructure development. Table 1, Summary of the P3 Schools Lease Payments and

Buy-Out Prices, constructed by the Canadian Centre for Policy Alternatives (CCPA)

based upon raw data accessed by FOIPOP from the Department of Education, estimates

that the cost of leases for the total inventory of 39 schools was $726-million, with 45

per cent of the total coming from interest payments (Gorman 2015). While the data

set is incomplete, coming from only three of the four private developers, a statistical

procedure known as mean substitution was used to provide estimates for the missing

data. Nova Scotia’s Auditor General has pegged the costs higher, estimating that total

costs for 31 of the schools over the life of the leases will be $830-million (AG 2010).

Round that figure up to include the eight missing schools and the total cost may be

over $1-billion. It is likely that the discrepancy may be attributed to additional costs

above and beyond the lease totals, including project development costs, sinking fund

payments, and maintenance (CCPA-NS 2016, 17).

Building too many schools too fast was the undoing of the Nova Scotia venture

with P3 schools. Nova Scotia’s Finance Minister under John Hamm was sanguine in

March 2001 about what led to the undoing of the ambitious P3 school construction

REINVENTING THE BUILDING OF SCHOOLS

program. The first six schools were too expensive, too politically contentious, and

“too out of control.” “I don’t blame the developers or the school boards,” LeBlanc

said. “It was the province that didn’t grab control of this. There weren’t enough

ground rules up front for controlling costs” (Meek 2001). Based upon the KPMG

findings, the P3 school construction projects were simply not carefully planned or

monitored by provincial education officials, giving local school committees and

private developers too much leeway, resulting in costly design changes, including

oversized gyms, bigger classroom sizes, and upgraded computer infrastructure (Meek

2001, McCulloch 2017).

The direct involvement of an Ontario union pension fund, the Ontario Municipal

Employees Retirement System (OMERS), in the Nova Scotia P3 initiative tended to

blur the tidy lines normally drawn between public and private interests. Fifteen

of the P3 schools were built by Ashford Investments in partnership with OMERS,

through its wholly-owned subsidiary Borealis Infrastructure Management, based in

Moncton, NB, and one other, already built, was acquired by OMERS at a cost of $162

million, financed by the issuing of bonds (Loxley 2010, 91-92). The union pension

fund’s involvement was a matter of concern for prominent P3 critics like University

of Winnipeg economist John Loxley who openly mused about the union’s complicity

in supporting the venture. OMERS’s role in aiding the private venture capitalists was

viewed as aiding and abetting “bad public policy” and roundly criticized by other

unions, most notably the Ontario branch of CUPE (CUPE-Ontario 2004, 9-11). Further

alarms were raised when CCPA research revealed that borrowing costs were higher

for Borealis (6.35%) than those of the province (5.6%), adding to the burden borne

by the province. What was clear to Loxley was that not only the odour of the Nova

Scotia P3 deals, but OMERS’s “complicity” driven by “a narrow motive of maximizing

returns” (Loxley 2010, 93).

REINVENTING THE BUILDING OF SCHOOLS

Successes and Set-Backs:

Assessing the P3 Schools Record

“Comprehensive contract terms and management processes and procedures which

ensure that services are paid for and received are essential to protecting the public

interest. Our audit identified significant weaknesses in both of these areas.”

— Jacques Lapointe, Auditor General, Nova Scotia,

Report of the Auditor General, February 2010.

Appearing before the Nova Scotia Legislature Public Accounts Committee on January

25, 2017, Paul LaFleche, Deputy Minister of Transportation and Infrastructure

Renewal (DTIR), opened with an appeal to look again at the merits of public-

private partnerships. “We believe that P3 models are largely misunderstood and

often misrepresented in public discussion,” he stated. To set the record straight, his

presentation outlined “what they are and under what circumstances government

might consider a project suitable for a P3 arrangement.” “My remarks,” he added,

“are not meant to persuade or dissuade you on the merits of P3s but I do want

to explain why government might consider these types of arrangements for large

infrastructure projects, especially when it is in the best interests of taxpayers – in fact

– only when it is the best interests” (NS, PAC Hansard 2017).

With the province engaged in planning a massive QEII Heath Sciences redevelopment

project, including the demolition of the Centennial and Victoria Buildings at the VG

site, and a series of related renovation projects, LaFleche was attempting to ensure

that all options, including P3s remained on the table. Perhaps mindful of the cloud

left hanging over the P3 schools venture, he and his senior staff emphasized the

potential benefits of such partnerships. In testimony, he cited well-known examples

of P3 projects such as the Cobequid Pass toll highway, the Halifax Convention Centre,

and the Nova Scotia Correctional Facility in Burnside with only a passing reference to

the P3 schools. “If the business case supports it,” LaFleche said, “there can be mutual

benefits for all partners involved in public-private partnerships.” He then repeated

the purported advantages: “P3s can be a way to deliver large infrastructure projects

that speeds up delivery of the project and transfers day-to-day operating risk to the

private partner – such as building upkeep and operational costs—while allowing the

government partner to do what it does best in terms of operating its services to the

public” (NS, PAC Hansard 2017). The implication was clear: do not throw the “P3

baby” out with the P3 schools bathwater.

REINVENTING THE BUILDING OF SCHOOLS

Nova Scotia’s massive plunge into P3 school construction may have been a

“cautionary tale,” but it was not without its remarkable successes. Given the dire

state of provincial finances in June 1993, school capital planning and construction

was in jeopardy. Barely recovered from the 1990 recession, the newly-elected

Savage government faced a serious budget crisis with a mounting debt, declining

provincial tax receipts and rising demands for social expenditures in health and

education (Clancy et al. 2000, 54). A Price-Waterhouse financial review for the first

quarter (April-June) of fiscal 1993-94 forecast a record deficit of $650 million, with

declining revenues (Boudreau 1993). Following the September 1993 budget address,

Minister Boudreau attempted to reassure the New York bond rating agencies, but

Moody’s downgraded Nova Scotia debt from A3 to A2 in the month that followed

(Tibbetts 1993). The rising cost of provincial borrowing and the shrinking numbers

of big lenders posed a grave danger to Nova Scotia and other debt-heavy provinces

seeking to finance infrastructure projects (LaFleche 2017). With little “fiscal room,”

Savage and Boudreau were forced to look for creative alternatives and found a way

forward by embracing the structural reform agenda of the “reinvention” movement.

Influenced by Osborne and Gaebler’s public management reform ideas, they began

to see it as a “catalytic crisis” opening the door to an injection of private sector

innovation and entrepreneurship. In purely pragmatic terms, initiating P3 schools

provided an immediate solution to two challenges – leveraging more finance capital

and transferring the costs “off-book” on the provincial finance ledger. The school

finance strategy worked, for a time, allowing for a massive infusion of new capital,

building need schools sooner, and putting off the debt reconciliation.

Adopting the P3 schools model succeeded in reducing the short-term cost of providing

a record number of brand new schools, eventually totalling thirty-nine over five

years. The initial costs borne by the Nova Scotia government were significantly less,

particularly on a per school or per pupil space basis. Converting the capital leases into

“service agreements” allowed the two parties, the government and private partners,

to finance the projects “off-book” until 2001 when the Nova Scotia Auditor General

weighed-in and ordered a $400-million capital charge be recorded in 2001. Out of

the P3 partnerships, the province secured news schools in over 30 local communities

and the annual contract payments in 2015-16 totalled $37.3 million, with an option

to either purchase the schools for agreed-upon prices or return them to the private

developers. The purchase prices will not be added to the provincial debt until 2020

and will not be amortized until that date. (Gorman 2015, Flinn 2016).

REINVENTING THE BUILDING OF SCHOOLS

Total Contract Total Principal Total Interest

District (School) Payments Payments Payments Buy-Out Price

Annapolis

Champlain Elementary School $10,559,760.00 $5,679,496.48 $4,880,263.52 $2,405,660.00

Horton High $47,200,080.00 $27,500,448.94 $19,699,631.06 $13,338,600.00

Northeast King’s Education Centre $32,393,412.14 $17,083,552.70 $15,309,859.44 $7,857,612.00

Pine Ridge Elementary School $21,401,760.00 $11,373,851.73 $10,027,908.27 $5,173,177.00

Cape Breton

Cape Smokey Elementary School $8,061,556.00 $4,413,837.01 $3,647,718.99 $2,010,659.00

Greenfield Elementary School $14,871,876.19 $8,204,288.51 $6,667,587.68 $3,825,306.00

Harbourside Elementary School $19,549,372.74 $10,733,681.87 $8,815,690.87 $5,100,544.00

Jubilee Elementary School $11,333,273.00 $6,205,159.25 $5,128,113.75 $3,588,338.00

North Highland Elementary School $8,013,610.00 $4,389,370.10 $3,624,239.90 $1,993,340.00

Riverside Elementary School $11,685,169.03 $6,467,585.48 $5,217,583.55 $3,042,885.00

Sherwood Park Education Center - Sydney $23,715,486.00 $12,897,884.28 $10,817,601.72 $6,600,000.00

Chignecto

Amherst High School $36,492,886.29 $20,036,603.83 $16,456,282.46 $10,000,000.00

Enfield Elementary $10,898,400.00 $5,861,178.73 $5,037,221.27 $5,285,301.42

Maple Ridge Elementary School $15,619,606.00 $9,058,736.48 $6,560,869.52 $4,550,000.00

Pictou Elementary $10,238,160.00 $5,506,099.77 $4,732,060.23 $5,285,301.42

Riverside Education Center $33,497,175.00 $16,176,430.77 $17,320,744.23 $8,950,000.00

Conseil Scholaire

Ecole Beaubassin $14,066,640.00 $8,050,774.05 $6,015,865.95 $5,285,301.42

Ecole Bois Joli $14,470,560.00 $8,281,949.96 $6,188,610.04 $5,285,301.42

Halifax

Bedford South School $16,958,880.00 $9,094,100.95 $7,864,779.05 $5,285,301.42

Eastern Passage Education Center $17,949,612.00 $10,258,718.79 $7,690,893.21 $5,285,301.42

Lockview High $33,839,040.00 $19,317,359.50 $14,521,680.50 $5,285,301.42

Madeline Symonds Middle School $18,055,200.00 $10,333,552.51 $7,721,647.49 $5,285,301.42

O’Connell Drive Elementary School $13,038,940.50 $7,195,256.51 $5,843,683.99 $3,950,000.00

Park West School $16,959,120.00 $9,120,645.01 $7,838,474.99 $5,285,301.42

Portland Estates School $11,706,960.00 $6,296,024.02 $5,410,935.98 $5,285,301.42

Ridgecliff Middle School $17,738,820.00 $10,118,809.59 $7,620,010.41 $5,285,301.42

Sackville Heights Elementary School $11,706,960.00 $6,296,024.02 $5,410,935.98 $5,285,301.42

St. Margaret’s Bay Elementary $10,293,120.00 $5,891,072.31 $4,402,047.69 $5,285,301.42

South Shore

Apostogan Consolidated Elementary School $8,421,800.40 $4,614,452.86 $3,807,347.54 $2,056,885.00

Bayview Community School $19,162,800.00 $10,333,780.55 $8,829,019.45 $4,371,572.00

Strait

Antigonish Education Centre $22,961,874.84 $12,689,106.09 $10,272,768.75 $5,899,606.00

Bayview Education Centre $18,414,753.03 $10,158,759.49 $8,255,987.54 $4,819,494.00

Cape Breton Highlands Academy $23,477,056.00 $13,030,296.48 $10,446,759.52 $6,061,083.00

Dalbrae Academy $20,473,077.35 $11,312,048.61 $9,161,028.74 $5,377,555.00

East Antigonish Academy/Education Center $26,503,880.48 $14,645,798.07 $11,858,082.41 $6,737,971.00

Richmond Academy $21,144,849.29 $11,688,674.67 $9,456,174.62 $5,457,355.00

Tamarac Academy Education Centre $22,267,646.97 $12,309,346.05 $9,958,300.92 $5,762,940.00

Tri-County

Forest Ridge Academy $9,913,920.00 $5,332,136.39 $4,581,783.61 $2,287,255.00

Meadowfields Community School $21,509,760.00 $12,398,710.16 $9,111,049.84 $6,2000,000.00

TOTAL $726,566,853.25 $400,355,608.57 $326,211,244.68 $206,126,755.46

TABLE 2

Summary of Lease Payments and Buy-Out Prices

REINVENTING THE BUILDING OF SCHOOLS

Nova Scotia’s P3 schools in the second wave were delivered, in most cases, on

time and on budget. Scanning the initial lease dates for the thirty-nine P3 school

projects provides compelling evidence that most, if not all, opened close to their

scheduled completion dates (CCPA-NS 2016). A detailed analysis of the nine schools

built by Nova Learning Incorporated, produced by President/CEO Kirk McCulloch,

demonstrates that the schools were not only constructed in a timely fashion, but,

overall, at costs significantly less or comparable to traditional schools (Scotia Learning

2017). That is consistent with the detailed British research on their version of P3s,

the Private Finance Initiative (PFI) projects, constructed during the 1990 to 2006-time

period. Out of 600 operational new public facilities with PFI investment over those

15 years, some 200 or one-third were new and refurbished schools. A 2006 HM (Her

Majesty’s) Treasury study examined 61 PFI projects, in detail, and found that 89 per

cent of the projects were delivered on time or early; all were delivered within public

sector budgets with the exception of a few user change orders. With respect to PFI

construction performance, the U.K. National Audit Office (NAO) confirmed in 2006

that over 75 per cent of the reviewed PFI projects were delivered on time or early, and

in no case, did the public sector bear the cost of construction overruns, a significant

improvement over public procurement projects (HM Treasury 2006, 4 and 5).

Building high quality schools was a priority in the Nova Scotia P3 construction program

and, after 20 years, the thirty-nine schools are in good shape and reasonably well-

maintained. Speaking to the Public Accounts Committee in January 2017, the DTIR

Executive Director of Major Infrastructure Projects, John O’Connor, confirmed that

they were “good buildings and built to a similar standard that we were using for our

own buildings” (NS, PAC, Hansard 2017). The N.S. Auditor General’s 2010 report found

that, overall, the 13 principals of P3 schools surveyed were “satisfied with the level of

services” in spite of the documented lapses and gaps in oversight by education sector

management (AG 2010, 33). Senior Nova Scotia government officials speaking freely

at a January 2017 Atlantic Association of Applied Economists session on Private-

Public Partnerships were less reserved in their assessment of the total inventory of

P3 schools. Recent assessments in preparation for deciding about whether to “buy

out” the contracts revealed that they were in “excellent condition.” The P3 schools,

one official commented, were “better maintained” and “not comparable to regular

schools with no regular maintenance plans” (Discussion Notes, AAAE 2017).

The first P3 school in Halifax Regional Municipality, O’Connell Drive Elementary School

in Porter’s Lake exemplifies, in some ways, the complexities involved in assessing the

value of the whole venture. When it opened in September 1998, the P3 school built

by Nova Learning won national accolades, winning first place in the “infrastructure”

REINVENTING THE BUILDING OF SCHOOLS

category in the Canadian Council for Public-Private Partnerships (CCPPP) Awards for

Innovation and Excellence (CCPPP 1998). When the school’s well water was found to

be unsafe in 2000, possibly because of site selection, a water filtration system was

installed, but Scotia Learning encountered difficulties with the Halifax Regional School

Board in trying to get it connected and in operation. Students and teachers were

required to drink bottled water for over a year, while both parties worked to resolve

the matter (Shaker 2013 and McCulloch 2017). Sixteen years later, the province was

quick to decide on purchasing O’Connell Drive Elementary, a well-designed 50,000

sq. ft. K-6 school in good condition in a growing community, for $3.9 million, one of

two purchased for $13 million in July of 2016 (Gunn 2016).

One of the four private contractors, Nova Learning Centres, a consortium headed

by Halifax developer George Armoyan, held firm to the letter of the agreements

and exposed the P3 schools to public criticism (Shaker 2003). From the outset, Nova

Learning sought to maximize its return on the investment in nine schools, exploiting

holes in the P3 contracts allowing the private contractor to charge higher rates for

community use of schools. Under the terms of the leases, the province was entitled to

use the building for 3,500 hours a year, even though some claimed to use only half of

that time. Armoyan and Nova Learning began charging several times the normal HRSB

rates for renting a double or single gym for youth and adult community programs.

Nova Learning took the matter to arbitration and won the case, securing the right to

rent the building after school hours and set their own rates. It also secured a ruling

that the private owner was entitled to a 35 per cent share of cafeteria food and

vending machine sales, amounting to an estimated $50,000 a year. When it came to

paying for computer upgrades in new classrooms, the arbitrator also sided with the

Armoyan firm (Nova Learning v. Nova Scotia Government 2003, Shaker 2003). On

the matter of paying for repairs caused by vandalism, Nova Learning challenged the

province, again, insisting that it was not responsible for any vandalism repairs during

extended school hours (Sherwood 2003). The actions of Armoyan and Nova Learning

not only stirred up a “hornet’s nest” but gave the other P3 private partners a bad

name, even though they generally refrained from such overt profit-seeking activities

(Jackson and Sherwood 2003).

REINVENTING THE BUILDING OF SCHOOLS

Hidden Legacy:

Of Education Sector Mismanagement and

the Innovation Quotient

“State governments and school boards would steer the system and let others row.

They would set minimum standards, enforce goals… and establish the financing

mechanisms necessary to achieve the standards and goals. But school districts

would not operate the schools.”

— David Osborne and Ted Gaebler, Reinventing Government:

How the Entrepreneurial Spirit is Transforming the Public Sector (1992), p. 314.

Many of the contentious issues and setbacks associated with the P3 schools stemmed

from poorly worded contracts, confusion over public-private responsibilities, and lax

oversight by education authorities. Two recent Auditor General reports, in February

2010 and November 2016, identified a litany of concerns centring upon school board

management competencies, the Education Department’s inability to enforce contract

compliance (AG 2010), and glaring weaknesses in school capital planning related to P3

and regular school construction and management (AG 2016). Public sector managers,

in the Department and school boards, come in for the heaviest criticism for failing

to negotiate “comprehensive contract terms” and for their laxity in “management

processes which ensure services paid for and (sic) received are essential to protecting

the public interest.” Auditor Jacques Lapointe was particularly alarmed to learn that,

over the 20-year life of the contracts, there was a forecasted $52 million shortfall in

payments between the private developers and the regional school boards (AG 2010,

28).

The Department of Education’s management of the P3 service contracts did not pass

the test in the February 2010 performance audit. The Provincial Auditor identified, in

exacting detail, the shortcomings of the public managers and was surprisingly “soft”

on the private developers throughout the report. Public management oversight was

found sadly lacking in a whole range of management and compliance areas, including

student health and safety, staff criminal reference checks, fire safety inspections,

and CPR training. It was unclear as to whether this might apply more broadly to the

situation in regular public schools. Over half of the P3 schools reviewed (18 out of

31) had held joint Facilities Management Team meetings. School officials were not

effective in monitoring lease/service payments and, in one case, by December 2008,

had failed to collect $61,000 due as a result of annual inflation adjustments.

REINVENTING THE BUILDING OF SCHOOLS

For one-third of the tested schools (5 out of 15), staff were unable to provide

data on how operating payments were determined, more than ten years after the

commencement of the leases. The Department still did not have a comprehensive P3

school contract management manual and two key management staff had retired,

leaving the positions vacant from March 2008 to December 2008. The Auditor also

found serious holes in the contracts which lacked specificity when it came to cleaning

standards and maintenance response times and contained no process to monitor

private developer performance. It was abundantly clear that the Auditor found the

Department ill-prepared to “hold the developers accountable and effectively manage

the contracts” (AG 2010, 37-40).

Regional school boards (RSBs) fared no better and, in the case of the Cape Breton

Victoria Regional School Board, Lapointe was scathing in his assessment of board

managers for sub-contracting maintenance and operations back to the board,

transferring risks back to the government. On top of the RSB subcontracting problem,

the audit turned up contract calculation errors involving hundreds of thousands of

dollars (AG 2010, 40-45). None of the Auditor General’s 2010 findings amounted to

much of an endorsement of public sector management of school facilities, with or

without P3 agreements.

From the outset, Nova Scotia public education authorities recognized that they were

breaking new ground in the provision and management of school infrastructure.

When KPMG conducted its 1998 study looking at whether P3s were a good deal or

not, the consultants were unable to answer the question. Conservative Education

Minister Jane Purves, speaking in the Legislative Assembly in March 2000, put it this

way: “Our consultant told us that they couldn’t answer the question about whether

P3 financing was good value for money because the proper analysis had not been

done before the projects began. But since no other government had ever attempted

such a construction program, we lacked a public-school comparator.” Then came a

rather prophetic forecast of what was to follow: “What the consultant could do was

give us the tools to do an up-front analysis, using proper comparators, before we go

forward with any more public-private partnerships” (NSLA, Hansard 2000).

School management officials involved in overseeing the P3 school contract arrange-

ments were more forthcoming in acknowledging their initial challenges. Speaking

before the Public Accounts Committee in April 2003, three senior management officials

were quite honest about changing school capital planning processes requiring them

to venture outside their realm of experience. The Department of Education’s Director

of Facilities, Charles Clattenburg, was most comfortable outlining the conventional

steps in the School Capital Construction process and testified that sizable cost

REINVENTING THE BUILDING OF SCHOOLS

escalations in the case of two schools, Horton High School and Meadowfields School

in Yarmouth County, were the direct result of program enhancements, including

larger gymnasia, requested by the local school boards and negotiated by the private

developers in community consultations. Negotiating the P3 contracts for the first six

projects was so new to the Nova Scotia government that the contract negotiations

were delegated to a private sector law firm. Looking back in April 2003, John Traves,

Director of Legal Services at the Justice Department, offered this post-mortem: “I

don’t believe there was value for money for the first six.” That is why, he explained,

the government decided to “bundle” the next 33 projects into bigger deals, aiming

to achieve economies of scale through “bundling” with three private development

contractors. Summarizing his experience, Clattenburg conceded: “We’ve had some

good successes and we have had some problems in the P3 process. It’s been a learning

curve” (NS, PAC Hansard 2003).

Bundling the second wave of P3 projects made the massive construction venture

more manageable for the province and likely more cost-effective in terms of school

cost per square foot. By then, the Education Department had Traves as in-house legal

counsel and was better equipped to deal face-to-face with private developers as

project partners. Taking on all 39 projects over such a short time line proved to be the

supreme test for public sector managers steeped in a more methodical, sequenced

model of school capital planning and construction. One example of what went

wrong was the structuring of the contracts limiting school boards to 3,500 hours and

leaving the setting of community rental rates to the private managers of the facilities

(NS, PAC Hansard 2003). Years later, in February 2017, senior government staff, in a

private briefing conceded that if the P3 process was “out of control,” it was because

“too many were undertaken all at once” and because it “takes time to build up the

expertise” (AAAE Notes 2017).

School capital planning has advanced significantly since the “big bang” of P3 schools

from 1996 to 2001. Better processes have emerged to establish school capital funding

limits and to allocate funding to schools and communities based upon an assessment

of needs. Examining the province’s budgeting for school construction and renovations

from 2012-13 to 2016-17, Auditor General Michael Pickup found that a relatively

stable $80 million or so a year was approved by the Education Department. His most

recent report on School Capital Planning also clearly indicated that there is still plenty

of room for improvement (Auditor General 2016, Doucette 2016). Since the spring

of 2015, school boards are required to conduct a Long-Range Outlook as part of the

School Review process, but that inventory of the province’s 400 schools provides only

a very basic summary of building conditions. For its part, the Department does nothing

further with the information, leaving the province without a full assessment of the

“condition of good repair” of the buildings in operation, including the P3 schools.

REINVENTING THE BUILDING OF SCHOOLS

Decision-making responsibilities for capital planning are still divided between the

Department and the regional school boards, despite being interdependent with one

another. The Department is responsible for approving new schools and renovations,

while the boards entrusted with closing schools and reallocating students to make

best use of existing facilities (Auditor General 2016, 29-30). In cases where schools

are recommended for closure, such as Pentz and Petite Riviere in the South Shore

Regional Board of Education, transition plans are completely disrupted when the

province fails to approve funding for the proposed new school (Lee 2017, CBC Nova

Scotia 2017).

The decision-making process in school construction became a live public issue in

March of 2017. A Global News Maritimes investigation, conducted by provincial

legislature reporter Marieka Walsh, provided clear evidence of what was described

as “queue jumping” in school construction. Documents released through N.S.

access to information included scorecards for schools that were “pushed ahead”

of others higher on the waiting list for new builds or renovations. Out of 17 school

projects approved in 2014-15, six schools were approved to jump the queue, five of

which were in government-held ridings. In the case of the Tatamagouche School, in

Education Minister Karen Casey’s riding, the cabinet overruled provincial bureaucrats

who provided documentation to support the conclusion there was “no benefit

demonstrated” for the project. When asked to justify the decision, senior Education

Department official Heather Fairburn offered the justification that “some factors”

cannot be “adequately expressed on a scoresheet” (Walsh, Global News 2017).

Whatever the explanation, the revelations severely damaged the credibility of the

provincial ranking and approvals process in school capital planning. It also suggested

the need for significant governmental reform.

Deciding on the future of P3 schools posed a bigger challenge. Facing a few major

decisions involving the fate of the 39 P3 schools involving as much as $200 million

in potential “buy-out” costs, the Department was hamstrung by the existing school

planning process, essentially dependent upon school board closure decisions before

deciding on whether to retain nearby P3 schools. With the 20-year lease expiry date

approaching in 2016-17, the province was compelled to extend deadlines and make

decisions in hasty fashion without evidence of detailed case-by-case analysis. Not

only did the division of school planning responsibilities disrupt sound, integrated

school capital planning; it also left the Department in the lurch and rushed in making

decisions on whether or not to purchase a few P3 schools at the end of their 20-year

lease agreements (Auditor General 2016, 30, 35-38).

REINVENTING THE BUILDING OF SCHOOLS

Twenty years on, P3s are no longer a new public sector management strategy. P3s-

or PPPs – or PFIs – are common in most countries and in some Canadian provinces.

The “cautionary tale” of Nova Scotia’s P3 schools may well have dampened the

public appetite for such ventures in Atlantic Canada, but not in the United Kingdom,

Australia, or British Columbia (Conference Board 2013, Boothe et al. 2015). While

Nova Scotia school capital decisions are still made on a traditional government cycle

of one year, the government has acquired, over time, more expertise and experience

in structuring alternative financing arrangements and managing public-private

partnership schools. With the recent addition of a senior Education Department

facilities planner, the Department of Transportation and Infrastructure Renewal team

is much better equipped to assess and potentially oversee new school construction

and renovations, including possible future P3 projects. While the future of P3 schools

is very much in question, determined to a large extent by political considerations, the

province is capable of initiating, guiding and properly managing major P3 projects,

most likely in the health and transportation sector. “We are now in a different place,”

Deputy Minister LaFleche says, “with 20 years of experience” (Private Briefing, DTIR

2017).

REINVENTING THE BUILDING OF SCHOOLS

Who Benefited Most from P3 Schools?

Net Benefits and the Public Interest

“Public-private partnerships have a long history, but they recently have come to the

fore as a way to make projects happen sooner and more cost effectively than they

would if managed by the public sector alone.”

— Finn Poschmann, Private Means to Public Ends: The Future of

Public-Private Partnerships. CD Howe Commentary, No. 183, June 2003.

“We’ve had some good successes and we’ve had some problems in the P3 process.

It’s been a learning curve.”

— Charles Clattenburg, Director of Facilities Management,

Nova Scotia Department of Education, Testimony, Public Accounts Committee,

Nova Scotia Legislature, April 9, 2003.

The most commonly asked question about Nova Scotia’s P3 school venture is whether

the province achieved value for the $726 million to $878 million spent over the

20-year span of the lease-to-purchase agreements. Recent reports commissioned

by the Canadian Centre for Policy Alternatives, Nova Scotia Office, and supported

by the Canadian Union of Public Employees (CUPE), have provided their definitive

answer that Nova Scotia’s P3 schools were a “financial failure” and purchasing the

buildings will ensure that public schools are back safely under public ownership

(CCPA-NS 2016, CUPE 2016). Completely missing from the CCPA-NS analysis was

any reference to the participation of the Ontario municipal employees pension fund,

OMERS, in partnership with Ashford Investments. The only comprehensive research

study, conducted in 1999-2000 by KPMG, was unable to answer the critical question

of whether the public got good value because of the absence of a public-sector

comparator (KPMG 2000). Based upon the KPMG report and his own experience

overseeing the contracts, Justice Department expert David Traves responded to the

question carefully back in April 2003: “I feel you (Nova Scotians) received good

value, but I think there is certainly room that… the province could have gotten

better value.” His governmental colleague, Darrell Youden of Education’s Corporate

Services, admitted that it was difficult for anyone to render any judgement four years

into a 20-year arrangement (NS, PAC Hansard 2003).

Years later, officials in the Department of Transportation and Infrastructure Renewal

are still reticent to render a clear judgement on deals done in the late 1990s.

Furthermore, DTIR’s in-house expert John O’Connor recently told Conservative MLA

REINVENTING THE BUILDING OF SCHOOLS

Tim Houston before the Public Accounts Committee that government managers had,

as of January 2017, “not gone back through a backward-analysis of all the deals for

the P3 schools” (NS, PAC Hansard 2017).

The private partners may well have benefitted inordinately from the inexperience,

confusion and ineptitude of government managers initially assigned to the file,

particularly during the negotiation of the first six P3 school contracts. That was the

damning assessment rendered by the Auditor General in his 2010 report on the

management of the P3 schools (Auditor General 2010). Two developers were also

paid by the province to deliver operating and maintenance services but subsequently

subcontracted the work back to school boards for far less than the province had

paid. That resulted in a windfall profit to the service provider of $52 million over the

full term of the 20-year lease (Auditor General 2016, 37). It is also quite clear that

one private partner, Nova Learning, took advantage of a loophole in its contracts to

squeeze more of a profit out of after-school space rentals and food service proceeds

(Shaker 2003).

One of the lead private developers, Kirk McCulloch, has countered the June 2016

CCPA-NS report, Private Profit at a Public Price, with a Value for Money (VfM)

comparison of his own, utilizing data gleaned from the financial records for nine P3

schools built and managed by his own development company, Scotia Learning. His

Cost Comparison for all Scotia Learning Schools, comparing the P3s to province-built

schools, covers the full term of the 20-year leases and provides evidence that the

province may well have come out ahead in the whole transaction. Originally prepared

for the Government of Nova Scotia as a document meant to inform decision-makers in

the Finance, Education, and Transportation and Infrastructure Renewal departments,

it was updated recently for inclusion in this research report (McCulloch 2017).

The Scotia Learning Cost Comparison Schedule (Table 3, next page) includes all nine

Scotia Learning schools, comparing the costs with a public-sector comparator, in this

case, the estimated costs of province-built and financed schools. Each of the Scotia

Learning Schools is broken out in terms of its detailed costing over the 20-year period,

with the lease expiry dates and established option-to-purchase prices. It confirms

that the first P3s (O’Connell Drive Elementary School and Riverside Education Centre)

were costlier, but, overall, the province reaped a saving of $14.1 million over the life

of the contracts. Without necessarily accepting the developer’s detailed analysis, this

much is clear: Bundling of P3 schools in the second phase worked to the advantage

of the province and yielded a much better return for the taxpaying public (Scotia

Learning 2017). “We can build school infrastructure for 10 to 15 per cent less than

the province,” the President of Scotia Learning maintains. “When it comes to P3

schools, we delivered value at the end of the day” (McCulloch 2017).

REINVENTING THE BUILDING OF SCHOOLS

The P3 school venture succeeded in delivering building facilities and services far

superior to the previous buildings and adhering to reasonably high quality standards.

A whole succession of Auditors General reports from 1997 to 2016 picked holes in the

public management of the P3 schools and identified a few examples of the first phase

cost overruns, but raised few, if any questions, about the quality of the facilities. In

April of 2003, the Cape Breton-Victoria Regional School Board confirmed, in a letter

to Liberal MLA Russell MacKinnon, that their P3 schools were well received. “Without

exception, these schools have been well accepted by the school communities, have

provided students with enhanced physical facilities with special program areas, and

have provided access for the communities to participate fully in student-centred

activities” (NS, PAC Hansard 2003).

Access to a capital sinking fund, under the P3 school contracts, helped ensure that

the schools were reasonably well maintained and deferred maintenance was kept

to a minimum, especially in school boards where facilities management is a system-

wide priority. With Scotia Learning’s Maple Ridge Elementary School in East Hants,

NS, under review for possible closure in January 2017, McCulloch described the

Total Net Option Option Total Total Pricipal

Area Lease Lease Purchase Price Cost Incl. Interest Repayment Total (positive=saving)

School Grade (Sq. Ft.) Expiry Payments Price /Sq. Ft. Purchase Payments On Maturity Cost (negative=cost)

O’Connell Drive Elementary School P6 48,098 Jul.31.18 $14,435,657 $3,950,000 $82 $18,385,657 $10,247,677 $8.047,404 $18,295,081 -$90,576

Porters Lake, Halifax Co.

Riverside Education Center 6-8 104,114 Jul.31.18 $31,632,563 $8,950,000 $86 $40,582,563 $22,542,468 $17,410,000 $39,952,468 -$630,095

Milford, Hants Co.

Maple Ridge Elementary School P-5 52,612 Jul.31.19 $15,653,862 $4,550,000 $86 $20,203,862 $11,981,060 $9,090,000 $21,071,060 $867,198

Lance, Hants Co.

Meadowfields Community School P-6 73,754 Jul.31.19 $21,420,060 $6,2000,00 $84 $27,620,060 $15,083,424 $11,759,732 $26,843,156 -$776,903

Yarmouth, Yarmouth Co.

Forest Ridge Academy P-6 38,309 Aug.31.20 $9,913,961 $2,287,255 $60 $12,201,216 $7,702,330 $5,718,137 $13,420,467 $1,219,252

Barrington, Shelburne Co.

Champlain Elementary School P-5 41,096 Aug.31.20 $10,559,784 $2,585,592 $63 $13,145,376 $8,706,982 $6,463,981 $15,170,963 $2,025,587

Annapolis Royal, Annapolis Co.

Bayview Community School P-9 73,476 Oct.31.20 $19,162,740 $4,519,081 $62 $23,681,821 $15,141,180 $11,297,702 $26,438,882 $2,757,061

Mahone Bay, Lunenburg Co.

Pine Ridge Middle School 6-8 83,719 Jan.31.21 $21,401,815 $5,173,177 $62 $26,574,992 $16,929,223 $12,932,943 $29,862,166 $3,287,173

Kingston, Kings Co.

Northeast Kings Education Centre 6-12 126,415 Aug.15.21 $32,393,412 $32,393,412 $62 $40,251,024 $26,106,915 $19,644,029 $45,750,944 $5,499,920

Canning, Kings Co.

TOTAL 641,593 $176,573,854 $46,072,717 $72 $222,646,571 $134,441,259 $102,363,928 $236,805,187 $14,158,616

TABLE 3

Cost Comparison: All Schools Over 20 Year Lease plus Purchase

P3 (Actual) Compared to Province Built/Financed (Estimated)

Net Cost/Saving

Schools P3 School Leases Over 20 Year Lease Term (Actual) If Province Had Built and Financed Schools (Est.) to Province

REINVENTING THE BUILDING OF SCHOOLS

52,000-square foot building on a 4.5-hectare plot of land near Highway 2 in Lanz

this way: “It’s a well-designed, well-built and well-maintained school in excellent

condition” (Campbell 2017a). A month later, the School Options Committee chaired

by Milford lawyer Kerri-Ann Robson, wholeheartedly concurred with that assessment

in recommending that it be retained and purchased by the province for $4.5 million,

a figure far less than the $13 million to $15 million it would cost to construct today

(Campbell 2017b). None of the 39 P3 school facilities across Nova Scotia has proven

to have been shoddy in its construction or to have structural problems, as have some

in Scotland and elsewhere (Johnson 2016).

Provincial and school board facilities staff concur on the effectiveness of school

maintenance and repair in most of the P3 schools. Recent school reviews for closure

in two rural counties, Pictou and East Hants, found the 20-year-old P3 elementary

schools in ‘good condition’ and better maintained than most built and maintained

by the province (Berry CBC News 2017; CCRSB Long Range Outlook 2015). Unlike

school board-owned properties, the P3 schools are maintained through a sinking

fund allocating some 40 cents per square foot for repairs per year. While the province

also provided a technology management fund, at least one of the contractors sub-

contracted with board staff to manage the “technology capital refresh” in their

schools (McCulloch 2017). Any initial fears that the P3 schools would fall short of

established standards were far off-the mark and, in fact, it may well be the reverse.

School authorities and public education research organizations, such as CCPA, start

with the assumption that the public interest is always best protected when social

infrastructure is under public management. Commissioned research studies, such as

CCPA-BC’s 2006 paper Value for Money? and CCPA-NS’s 2016 report Private Profit at

a Public Price are not only openly hostile to public-private partnerships, but dismissive

of research that calls into serious question the effectiveness of public management

of schools, with or without P3 contract arrangements. Most such research reports

are ideologically-driven and that is clear from the conclusions they reach: “Schools

are vital parts of our communities here in Nova Scotia, and they need to belong to

the public, not private corporations” (CCPA-NS 2016, 30). Missing from such studies

is any recognition or discussion of the dramatic changes remaking public sector

management or of fundamental questions being asked about whether “public service

delivery” is always the best way to serve the public interest (Dean 2011). Looking

back over twenty years of experience with P3 schools, McCulloch waxed pragmatic:

“We want to build the best school we can and, in the end, make a dollar.” If the Nova

Scotia P3 schools venture proves anything, it’s that a little competition between civil

servants, private contractors, and school board officials may be good for everyone.

REINVENTING THE BUILDING OF SCHOOLS

The time of decision is upon us. In school districts across the Nova Scotia, the wake-

up call came in September of 2016 when the public was alerted to the fact that

dozens of P3 leases on privately-built, publicly-rented school buildings are expiring

in four years, or, in a few cases, in 2019 and 2021. The actual time frame is shorter

because the 20-year contracts require the province to give the landlord four years’

notice of their intentions – whether to purchase the schools, close the schools and

vacate, or enter into new lease agreements. The first school board to decide on the

fate of its P3s was the Cape Breton-Victoria Regional School Board. Back in April

2016, six months ahead of the deadline clause, the CBVRSB advised the province

that the province should dispose of two of its seven leased schools, Harbourside

Elementary and Sherwood Park Education Centre (Farries 2016).

The Nova Scotia government is now deciding whether to retain the P3 schools and

will likely elect to exercise its right to “buy-out” most of the contracts held by the

four private developers, Scotia Learning, Nova Learning, Ashford Investments/OMERS,

and the Hardman Group. Given all the public controversy surrounding the P3 schools

initiative, since its inception, that is the safest political bet and the option that looks

the most favourable in terms of costs to Nova Scotia taxpayers. In announcing a

November 2016 decision to purchase 12 of the Scotia Learning Centres schools

for $85.7 million, Education Minister Karen Casey set out what would become the

standard rationale: “It was certainly in our best interest to purchase rather than

lease,” she told Canadian Press. “The lease would have been more expensive than the

$85 million” (Doucette 2016). It is not shaping up as much of a negotiation, since the

“buy-out” prices are stipulated in most, if not all, of the 20-year contracts.

REINVENTING THE BUILDING OF SCHOOLS

Summary: Lessons Learned from Nova Scotia’s

P3 Schools Initiative

The Nova Scotia foray into Public-Private Partnership (P3) schools was tantamount

to a “revolution” in school capital planning, innovation, and management. Critics

of the massive P3 schools experiment are inclined to interpret the whole province-

wide initiative as “a cautionary tale,” marked more by cost overruns and mishaps

than successes (CCPA-NS 2016). Public service managers acknowledge that the whole

initiative, symptomatic of the entire John Savage structural reform agenda, took on

“too much too fast” and presented them with a “steep learning curve” (Clancy et al.

2000). Claims that the Nova Scotia P3 school saga was a total “financial failure” are

largely driven by ideological motivations and based almost entirely upon revelations

surrounding the first few projects. In the case of Nova Learning, a good case can be

made that the province gained financially over the life of the contract (McCulloch

2017). Whether the province achieved good value for the massive undertaking remains

a matter in dispute, largely because of the absence of comprehensive data based

upon a public-sector comparator.

Nova Scotia’s P3 schools’ initiative has been, in the words of a Nova Scotia Deputy

Minister, “misunderstood and misrepresented” in public discussion. “We revolutionized

school construction in this province,” Nova Learning president Kirk McCulloch says in

recalling the tremendous jolt of innovation generated by the initiative in the late 1990s.

Far from being a strictly formulaic, bureaucratic school planning and construction

process, the P3 community consultations broke new ground in designing innovative

program spaces and responding to local school needs. Faced with initial resistance,

the private developers also proved themselves capable of working collaboratively with

school communities. “We had to build up credibility,” McCulloch recalls, “and to win

over communities expecting private developers to be looking out for their own interests”

(McCulloch 2017). Recent decisions to purchase most of the P3 schools might suggest

that the province is looking to return to business as usual in school capital planning,

financing, and operations. Tapping into the business acumen and entrepreneurial

spirit of private partners remains the best way to reinvent government service in the

education sector. The success of P3s ultimately lies in developing the management

capacities to steer the process and hold the private partners accountable for delivering

better educational services (Boardman, Siemiatycki, Vining 2016). It would be a pity if

the province slipped back into old habits given how much has been learned about how

to embrace innovative school building models, how to build high quality schools, and

how to exhibit more flexibility in responding to local community needs.

REINVENTING THE BUILDING OF SCHOOLS

Recommendations:

Building Upon the Lessons

This research report has sought to dispel the enduring myths associated with the

P3s and set the public record straight. Nova Scotia’s ambitious P3 school experience

produced some valuable lessons and suggests the need for a second phase of

structural reform in school capital planning and construction.

Here are eight recommendations, gleaned from recent Auditor General reports and

fully explained in this research paper, that build upon the largely unrecognized P3

schools legacy in school planning, innovation, and management:

1. Make School Capital Planning a Higher Priority and Initiate a Multi-Year Planning

Process, focusing on improving the existing year-to-year, ad hoc School Capital

Construction Plan process.

2. Establish a Capital Asset Management Framework (CAMF) for Education

Infrastructure, modelled after British Columbia’s CAMF (2002), to guide the review

proposals for capital spending and provide a “strategic options analysis,” including

a full range of options: traditional procurement, alternative service delivery options,

PPPs, asset trading or leveraging, and asset disposal.

3. Merge the current separate school facilities planning processes which divide the

responsibilities for school approvals and school closures between the Department

and school boards, and establish a provincial School Capital Infrastructure

Committee to break the logjam.

4. Build upon the Foundations laid by Public-Private Partnerships by Establishing

“Partnerships NS”, a PPP Advisory Committee populated by private developers,

architects, consultants, and facilities experts from outside of government.

5. Expand the Network of School-Level Facilities Management Teams to maintain the

community partnerships and business relationships developed in the P3 schools.

6. Conduct a Comprehensive Audit of the P3 School Planning venture, providing

a thorough backwards-analysis of the 39 P3 school projects assessing the hard

lessons, community impact, costs and benefits to the public.

REINVENTING THE BUILDING OF SCHOOLS

7. Develop a New Set of Provincial Guidelines for Identifying P3s, including clear

performance standards and metrics, optimal size, exceeding a minimum threshold

of between $40 million and $100 million; risk transfer assessment; and competitive

market conditions, likely to produce at least three project bids.

8. Establish Criteria for Evaluating Progress in Reinventing School Planning and

Management process, utilizing assessment resources and tools from the latest

research in public sector management reform, including VfM analysis and P3

screening instruments.

REINVENTING THE BUILDING OF SCHOOLS

References

Altshuler, Alan, and Robert D. Behn (1997). Innovation in American Government. Washington, DC: Brookings

Institution.

Arbitration Records (2003). Scotia Learning Centres Inc. v. The Queen, Province of Nova Scotia. Record of

Proceedings in Hearings held in Halifax, NS, April 16, 17, 18, 19; June 24, 25, 26, 27, 28; and July 3, 4,

2003.

Auditor General, Nova Scotia (1997). Report of the Auditor General, Chapter 8: Education and Culture –

Public-Private Partnerships for School Construction. Halifax: OAG

Auditor General, Nova Scotia (1998). Special Report of the Auditor General, Department of Education:

O’Connell Drive Elementary School Lease. Halifax: OAG.

Auditor General, Nova Scotia (1999). Report of the Auditor General, Section 5: Education- Public-Private

Partnerships (P3s) for School Construction – Follow-Up Review. Halifax: OAG, pp. 64-70.

Auditor General, Nova Scotia (2010). Report of the Auditor General, February 2010, Section 3- Contract

Management of Public-Private Partnership Schools. Halifax: OAG, pp. 27- 49.

Auditor General, Nova Scotia (2016). Report of the Auditor General, November 2016, Education and Early

Childhood Development, Section 2: School Capital Planning. Halifax: OAG, 27-39.

Barzelay, Michael (1992). Breaking Through Bureaucracy: A New Vision for Managing Government. Berkeley,

CA: University of California Press.

Bennett, Paul W. (2010). “P3 Schools: Can Partnerships Serve the Public Interest?” The Chronicle Herald,

February 25, 2010.

Bennett, Paul W. (2011). Vanishing Schools, Threatened Communities: The Contested Schoolhouse in Maritime

Canada, 1850-2010. Halifax: Fernwood Publishing.

Berry, Steve (2017). “4 Nova Scotia schools saved from chopping block,” CBC News Nova Scotia, April 27, 2017.

Boothe, Paul, and various co-authors (2015). The Procurement of Public Infrastructure: Comparing P3 and

Traditional Approaches. London, ON: Lawrence National Centre of Policy and Management, Ivey School of

Business.

Boardman, Anthony E., Matti Siemiatycki, and Aidan R. Vining (2016). “The Theory and Evidence Concerning

Public-Private Partnerships in Canada and Elsewhere.” SPP Research Papers, School of Public Policy,

University of Calgary, 9:12 (March 2016), 1-31.

Boudreau, Hon. Bernie (1993). Budget Address, Province of Nova Scotia 1993-94, Nova Scotia House of

Assembly, September 30, 1993.

Burke, David and Michael Gorman (2016). “Auditor General critical of planning to replace schools and protect

infrastructure.” CBC News Nova Scotia, November 30, 2016.

Campbell, Francis (2017a). “P-3 lease decisions swaying school reviews in Nova Scotia.” www.localxpress.ca,

January 30, 2017.

Campbell, Francis (2017b). “Options committee recommends schools in Lantz, Shubenacadie stay open.” www.

localxpress.ca, February 23, 2017.

Canadian Centre for Policy Alternatives, Nova Scotia Oce (2016). Private Prot at a Public Price: Deciding

the Future of the Public-Private Partnership Schools in Nova Scotia. Halifax: CCPA-NS, June 2016.

Canadian Centre for Policy Alternatives, Nova Scotia Oce (2016). “Buy-out in the only option for P3

schools in Nova Scotia, says think tank.” Media Release, CCPA, June 14, 2016.

Canadian Union of Public Employees, Nova Scotia (2016). Submission to the Minister of Finance, Pre-Budget

Consultation. Dartmouth: CUPE, February 26, 2016.

CBC News Nova Scotia (2007). “Tories resurrect P3 building scheme.” CBC News Nova Scotia, November 22,

2007.

CBC News Nova Scotia (2017). “Board says misunderstanding means 2 schools will close – and it can’t reverse

it,” March 6, 2016.

REINVENTING THE BUILDING OF SCHOOLS

Chignecto-Central Regional School Board (2015). Long Range Outlook. Truro: CCRSB, July 2015.

Clancy, Peter, James Bickerton, Rodney Haddow, and Ian Stewart (2000). The Savage Years: The Perils of

Reinventing Government in Nova Scotia. Halifax: Formac Publishing.

Conference Board of Canada (2013). Canada as Global Leader: Delivering Value Through Public-Private

Partnerships at Home and Abroad. Ottawa: The Conference Board, August 2013.

Conference Board of Canada (2010). Dispelling the Myths: A Pan-Canadian Assessment of Private-Public

Partnerships for Infrastructure Investments. Ottawa: Conference Board of Canada, January 2010.

Dachis, Benjamin (2016). “Getting More Buildings for our Bucks: Canadian Infrastructure Policy in 2016.”

C.D. Howe Institute, E-Brief, January 13, 2016.

Dean, Tony (2011). “Is Public Service Delivery Obsolete?” Literary Review of Canada, Feature Essay,

September 2011.

Department of Education, Nova Scotia (2005). “P3 Schools Get Upgrades and Control of Concessions.”

Halifax: News Release, NSDOE, April 7, 2005.

Deloitte Research (2006). Closing the Infrastructure Gap: The Role of Public-Private Partnerships.

Toronto: Deloitte.

Discussion Notes, “Private-Public Partnerships,” Atlantic Association of Applied Economists (AAAE)

Session with Finn Poschmann, February 24, 2017.

Dobbin, Murray (2002). Murray Dobbin. “Warning; the P3s are coming!” www.rabble.ca, July 25, 2002

(1/03/2017)

Doucette, Keith (2016). “N.S. to purchase 12 P3 schools for nearly $86m.” The Chronicle Herald,

November 3, 2016.

Doucette, Keith (2016a). “School planning slammed by auditor.” The Chronicle Herald, December 1, 2016, A1

Farries, Anne (2016). “Time running out on rented P3 schools.” The Chronicle Herald, September 26, 2016.

Flinn, Brian (2016). “P3 Schools.” AllNovaScotia.com, November 3, 2016.

Flinn, Brian (2017). “Karen Casey to Buy Taj Mahal.” AllNovaScotia.com. March 2, 2017.

Gorman, Michael (2015). “P3 bill will exceed $726 million.” The Chronicle Herald, December 8, 2015.

Government of New Brunswick, Department of Supply and Services (2011). “Public-Private Partnership:

Eleanor W. Graham Middle School and Moncton North School.” Report of Auditor General, 2011, Volume 3:

Chapter 2.

Government of Saskatchewan (2015). $100 Million in Savings for New Schools According to KPMG Report.”

Media Release, December 14, 2015, Regina, SK: Government of Saskatchewan.

Gunn, Andrea (2016). “Province purchases two schools from Scotia Learning for $13M.” The Chronicle Herald,

July 29, 2016.

Hall, David (2015). Why Public-Private Partnerships Don’t Work: The Many Advantages of the Public

Alternative. Public Services International.

HM Treasury (2006). PFI: Meeting the Investment Challenge. London: HM Treasury Oce, July 2006.

Hodge, Graeme A. (2010) “A Review Public-Private Partnerships: some thoughts on evaluation.” In

International Handbook on Public-Private Partnerships, edited by Graeme A Hodge, Carsten Greve and

Anthony E. Boardman. Cheltenham: Edward Elgar, 2010, pp. 399-438.

Iacobacci, Mario (2010). Dispelling the Myths: A Pan-Canadian Assessment of Public-Private Partnerships for

Infrastructure Investments. Ottawa: The Conference Board of Canada.

Infrastructure Ontario (2007). Making Projects Happen: Assessing Value for Money: A Guide to

Infrastructure, Ontario’s Methodology. Toronto: Queen’s Printer.

Jackson, David and JoAnn Sherwood (2003). “P3 arbitration loss stirs hornet’s nest.” The Chronicle Herald,

January 23, 2003.

Johnson, Simon (2016). “Faults found at two more Edinburgh PPP schools as 17 forced to shut.”

The Telegraph (London, UK), April 11, 2016.

REINVENTING THE BUILDING OF SCHOOLS

KPMG Management Consultants (2000). Review of Public-Private Partnership Processes. Report for

Department of Finance, Nova Scotia. Halifax: NS Government.

Lee, Michael (2017). “School board upholds Pentz and Petite closures.” Lighthouse Now, March 1, 2017.

Loxley, John with Salim Loxley (2010). Public Service, Private Prots: The Political Economy of Private-Public

Partnerships. Winnipeg and Halifax: Fernwood Publishing.

Lynn, Lawrence E. (1997). “Innovation and the Public Interest,” in Alan Altshuler and Robert D. Behn, eds.,

Innovation in American Government, 88-101.

McCulloch, Kirk (2017). CEO, Nova Learning/ Fairwyn Development Inc., Personal Interview, March 2, 2017

and April 5, 2017.

Meek, Jim (2001). “School’s out.” Summit Magazine. www.summitconnects.com (2001/03/01)

Murray, Stuart (2006). Value for Money: Cautionary Lessons about P3s from British Columbia. Canadian

Centre for Policy Alternatives – BC Oce. Vancouver: CCPA-BC, June 2006.

Nova Scotia, Department of Finance (1997). Strategic Public-Private Partnering: A Guide for Nova Scotia

Municipalities. Halifax: Anderson Consultants. https://novascotia.ca/dma/pdf/mun-strategic-public-private-

partnering.pdf (07/03/2017).

Nova Scotia Legislature (2000), Hansard/Debates, Assembly 58, Session 1, April 12, 2000, pp. 3860-3871.

Nova Scotia Legislature (2003), Public Accounts Committee (PAC), Hansard, April 9, 2003.

Nova Scotia Legislature (2017), Public Accounts Committee (PAC), Hansard, January 25, 2017.

“N.S. to buy, keep 11 schools open.” The Chronicle Herald, November 30, 2016, A5.

Osborne, David and Ted Gaebler (1992). Reinventing Government: How the Entrepreneurial Spirit

is Transforming the Public Sector. Don Mills, ON: Addison-Wesley.

Poschmann, Finn (2003). “Private Means to Public Ends: The Future of Public-Private Partnerships.”

Commentary. Toronto: CD Howe Institute, No. 183, June 2003.

Poschmann, Finn (2017). “The Tenuous Case For and Against Public-Private Partnerships.”

Presentation, Atlantic Association of Applied Economists, Halifax, NS, February 24, 2017.

Private Brieng, Department of Transportation and Infrastructure Renewal (2017). Discussion Notes

from Meeting with Paul LaFleche and the DTIR Capital Planning Team, March 1, 2017.

Salmon, Roy (1998). Testimony of Auditor General, Nova Scotia Legislature, Public Accounts Committee,

Hansard, August 6, 1998.

Scotia Learning Incorporated (2017). Cost Comparison Table and P3 School Schedules.

Prepared for AIMS by Kirk McCulloch, March 1, 2017.

Shaker, Erika (2003). “The devil in the details: The P3 experience in Nova Scotia schools.”

Our Schools/ Our Selves. Spring 2003, April 1, 2003.

Sheppard, David E. (1998). Celebrate the History of Horton District High School, 1959-1998

(Wolfville: HDHS, June 1998).

Sherwood, JoAnn (2003). “P3 vandalism: who pays depends on when it happens.” The Chronicle Herald,

January 25, 2003.

Tibbetts, Janice (1993). “Rating Agencies Dier on Nova Scotia.” The Chronicle Herald, October 7, 1993, A1.

Vining, Aidan R. and Anthony E. Boardman. “Public-private partnerships in Canada: Theory and Evidence.”

Canadian Public Administration 51.1 (2008): 9-44.

Walsh, Marieke (2017). “Documents shed light on queue jumping in Nova Scotia school construction,”

Global News Maritimes, March 17, 2017.

REINVENTING THE BUILDING OF SCHOOLS

Making a Donation

AIMS is a registered charity that operates with the financial support of foundations, corporations and individuals

and offers tax receipts for donations. AIMS does not receive government funding nor does it contract itself

for specific research projects thereby enhancing the Institute’s ability to think freely, to hold decision-makers

accountable for the choices they make, and maintain its professional integrity and intellectual independence.

Cost of Research: Each research project has its own parameters with respect to the amount and quality of the

information available, the level of expertise required by the researcher and the amount of time that it takes to

complete the paper. The total cost tends to range between $10,000 - $20,000+ which includes the author’s fee,

oversight and guidance by our Director of Research, proofreading, time, peer review, formatting, communications,

radio ads, and media relations.

AIMS would like to invite you to join our group of valued supporters by filling in the form below. AIMS has been

an influential voice in Canada for 20 years and those who support our mission and believe in moving it forward are

integral to AIMS’ continued success.

Please mail this form to:

287 Lacewood Drive,

Suite 204, Halifax, NS

B3M 3Y7

Name:

Organization:

Address:

Telephone:

Email:

Payment Method: Visa Mastercard Cheque

$250 $500 $1,000 Other

Card Number: Expiry Date:

Card Holder: Signature:

Or you may email it to aims@aims.ca.

If you wish to donate using our online portal,

go to the Support Us page on our website:

http://www.aims.ca/donate

ATLANTIC INSTITUTE FOR MARKET STUDIES

ResearchGate has not been able to resolve any citations for this publication.

Vanishing Schools, Threatened Communities: The Contested Schoolhouse in Maritime Canada, 1850 -2010

Book

Full-text available

Jan 2011

Paul W Bennett

Getting More Buildings for Our Bucks: Canadian Infrastructure Policy in 2016

Article

Jan 2016

Benjamin Dachis

Reviewing public-private partnerships: Some thoughts on evaluation

Article

Jan 2010

Graeme Hodge

Private Means to Public Ends: The Future of Public-Private Partnerships

Article

Finn Poschmann

Breaking Through Bureaucracy: A New Vision For Managing in Government

Article

Sep 1993

Michael Barzelay

Public-Private Partnerships in Canada: Theory and Evidence

Article

Mar 2008
CAN PUBLIC ADMIN

This article develops some theory on and examines the implementation and performance of Canadian public-private partnerships (P3s). It focuses primarily on infrastructure projects and addresses three questions: 1) What goals do governments expect to achieve through Pas? 2) How effective are Pas likely to be at delivering value to governments and citizens? 3) What lessons can be derived from the use of Pas? The article reviews the government's intended social goals for Pas and evaluates how effective Pas have been in fulfilling them. It then formulates a more comprehensive framework and outlines a "positive theory" perspective of Pas that takes into account the divergent goals of the partners - profit maximization goals of private-sector participants and the political goals of the public sector. The article evaluates and summarizes the findings and implications of ten Canadian Pas. The appropriate test of success, from a social (normative) perspective, is whether Pas have lower total social costs, including production costs and all of the transaction costs and externalities associated with the project. The ten case studies indicate that the potential benefits of Pas are often outweighed by high contracting costs due to opportunism generated by goal conflict. These costs are particularly high when construction or operating complexity is high, revenue uncertainty (use-risk) is high, both of these risks have been transferred to the private-sector partner, and contract management effectiveness is poor. In infrastructure projects, it rarely makes sense to try to transfer large amounts of risk to the private sector.

Reinventing Government: How The Entrepreneurial Spirit Is Transforming The Public Sector

Article

Jan 1992
ACAD MANAGE REV

This article seeks to put the “public” back in public values research by theorizing about the potential of direct citizen participation to assist with identifying and understanding public values. Specifically, the article explores eight participatory design elements and offers nine propositions about how those elements are likely to affect the ability of administrators to identify and understand public values with regard to a policy conflict. The article concludes with a brief discussion about potential directions for future research.

Northeast Kings Education Centre 6-12 126

Kings Kingston
Co

Kingston, Kings Co. Northeast Kings Education Centre 6-12 126,415 Aug.15.21 $32,393,412 $32,393,412 $62 $40,251,024 $26,106,915 $19,644,029 $45,750,944 $5,499,920

References Altshuler Innovation in American Government

Jan 1997

Kings Canning
Robert D Co Alan
Behn

Canning, Kings Co. References Altshuler, Alan, and Robert D. Behn (1997). Innovation in American Government. Washington, DC: Brookings Institution.

Scotia Learning Centres Inc. v. The Queen, Province of Nova Scotia Record of Proceedings in Hearings

Apr 2003

Arbitration Records (2003). Scotia Learning Centres Inc. v. The Queen, Province of Nova Scotia. Record of Proceedings in Hearings held in Halifax, NS, April 16, 17, 18, 19; June 24, 25, 26, 27, 28; and July 3, 4, 2003.

Reinventing the Building of Schools: The Real Legacy of Public-Private Partnership (P3) Schools in Nova Scotia (AIMS, May 2017)

Recommendations

School Storm Days Research, 2009 to the Present

Modern Canadian Bureaucratic Education State 1920s to Present

Examination of life cycle costs as a basis for future Public-Private Partnership (PPP) projects focu...

Re-Engineering Education: Curing the Accountability and Democratic Deficit in Nova Scotia Atlantic I...

Consolidation, Bureaucracy and the Public Schools: The Formation of the Modern Bureaucratic Educatio...

Maintaining "Spotless Records:" Professional Standards, Teacher Misconduct and the Teaching Professi...

The Last Stand: Schools, Communities and the Future of Rural Nova Scotia (Halifax: Fernwood, 2013)