In September 2007, the Premier announced the Municipal Sustainability Initiative (MSI), a ten-year commitment to fund municipal capital projects. The specific details of the requirements for funding are not yet available, but the province has already released a general set of MSI guidelines.

The guidelines states that funded projects "should be carried out by the private sector."

The guidelines do not specify the extent of private sector involvement required, but the implications are clear. In cases where a municipality cannot secure private services or does not consider private services appropriate, it may propose to use its own resources, but its application for funding must then "include an economic analysis or business case to substantiate that this will result in a more efficient or cost-effective project."

Projects using private resources are not subject to the same requirement. In other words, the guidelines impose a higher burden to justify public projects than private ones.

For example, it is implied that Edmonton or Calgary would have to specially justify using its own Infrastructure and Planning staff and resources to develop an assessment system for infrastructure planning and management, considered a Core Capital Project under MSI guidelines, but would not have to justify hiring a private consultant to do the same. The project itself would still have to be justified, but the guidelines strongly imply that the choice of private over public would be taken for granted.

Given the limited revenue sources available to municipalities, this is a major incentive, and seriously undermines the ability of municipal governments to set their own agendas.

Return to Current P3 Projects in Alberta.