Gerard Lucyshyn is vice-president of research and a senior economist at the MEI, a think tank with offices in Calgary, Ottawa, and Montreal.The indicators for Calgary’s infrastructure are flashing red. To turn things around, the city needs to stop relying on the same old approach that helped create the problem in the first place. According to City Hall’s estimates, it will need to spend at least $53.3 billion to develop and maintain infrastructure over the next ten years. To put that in perspective, the city’s revenues totalled $7.2 billion in 2025. When accounting for the cost of services, it’s clear the city doesn’t have the funds to cover its infrastructure needs the old-fashioned way without borrowing significantly.The problem is not simply what Calgary needs to build, but what Calgary is already not keeping up with.In 2013, only 2% of Calgary’s infrastructure was classified as being in poor or very poor condition. Today, this share has surged to 14%. Roads, sidewalks, pathways, and water infrastructure are all showing signs of strain, as exemplified by the Bearspaw feeder main failure last December.Every year that infrastructure is neglected makes the problem worse.Not that Calgary is unique. For too long, Canadian cities have relied upon traditional public procurement to build and maintain their infrastructure. This has led to a recurring outcome: higher costs leading to increased upward pressure on property taxes. .Calgary needs to rethink how it builds and maintains its assets. It needs to forgo the traditional public procurement system and adopt more public-private partnerships, or P3s.A P3 doesn’t mean giving up on Calgary’s infrastructure. The city maintains ownership while a private company delivers results based on its contractual commitments. The benefit comes from the incentives faced by the private contractor.Under procurement, contractors usually get paid only when infrastructure breaks down and needs repair. They fix problems after the fact. In a well-designed performance-based P3, payments are tied to how well the infrastructure works over time. In other words, contractors get paid for keeping things running smoothly. The idea is simple: the company makes more money stopping a failure before it happens than it makes fixing it. That difference is important.France does this, and the results speak for themselves. Under its concession system, the government retains ownership of major highways while private actors manage and maintain them. French roads managed through concession are 3.4 times less likely to be in poor condition than those managed exclusively by the public sector. .The message for Calgary is clear: make room for the private sector to improve infrastructure without giving up public ownership.Calgary itself has already seen the model work, in fact. Its first major P3, a composting facility, was delivered on time and on budget. So why not use them more?Drinking water infrastructure is a good place to start. Calgary projects that it will need to invest more than $5 billion in water infrastructure over the next decade, while parts of the network face significant vulnerabilities. The municipal government should consider a long-term, performance-based concession for the maintenance and renewal of parts of its water network. A private partner could take care of those parts while Calgary maintains ownership. The partner would be paid based on how well the network runs and whether it meets clear performance targets.That’s the promise of P3s: not less control for Calgary, but better public management. The city already has a P3 policy. It has already seen the model work for other projects. Now it has an infrastructure problem large enough to demand a new approach that it already knows will help.The longer it waits for more roads, pipes, and other assets to deteriorate before changing course, the more expensive the repairs will become. Calgary’s infrastructure crisis is here. If the government wants to prevent today’s maintenance backlog from becoming tomorrow’s fiscal crisis, it should start putting P3s to work now.Gerard Lucyshyn is vice-president of research and a senior economist at the MEI, a think tank with offices in Calgary, Ottawa, and Montreal.
