Development in Canada's infrastructure is expected to grow by approximately 30 percent from 2005 to 2010, and governments at all levels are turning to public-private partnerships (P3s) to meet the demand. P3s help the public sector finance and operate vital infrastructure such as roads, hospitals, bridges, water systems, and public transportation and to upgrade our ports and airports — all in an efficient and cost-effective manner. Federal governments have begun to realize that maximizing infrastructure investments means rethinking the traditional government approach to infrastructure renewal, not just thinking outside the box but looking to reinvent the box.
Nonresidents of Canada who are entering into P3 contracts often face unfamiliar tax, regulatory and operational challenges. In turn, the governments awarding P3 contracts need to ensure they receive the desired value and benefits. While there is a powerful business case for the use of a P3 approach over a traditional method for procuring infrastructure, both the public and private sectors must ensure that the obligations and responsibilities of each party are clearly defined. As well, the payment mechanisms for a P3 project must be based on performance and manage the amount of risk assumed by the private sector party. The potential for conflict is rife and it takes dedication and experience on both sides to ensure that every P3 project is a mutually successful one.
How PwC can help
Our Engineering and Construction practice has strong international connections and experience in P3s and can leverage our advisory, industry and tax knowledge to help at every stage of a P3 project.
If you are looking to bid on a Canadian P3 project, PwC's Tax Services practice can help you stay competitive by providing effective tax structuring for your bid as well as assist with the tax aspects of the financial modeling. Once your bid is successful, we can assist with the set up of the tax effective structure and operations that are required to handle the P3 project. In addition, PwC can help with other areas such as the development of tax effective repatriation strategies and executive compensation plans.
On the public sector side, our Tax and Advisory Services practices can offer assistance in a number of key areas, including indirect tax (e.g. GST/HST, and provincial sales taxes) matters, tax review of bids, infrastructure and project finance advice, and performance management.
Whether you represent the private or public sector involved with P3 projects our PwC professionals have the knowledge, experience and creative solutions to assist you. Contact us today to discuss your circumstances.