Aug. 22, 2019 - As outlined in our e-communications of May 21, 2019, and August 12, 2019, Québec’s Ministry of Finance has introduced new rules regarding the disclosure of nominee agreements. The new disclosure requirement is relevant to nominee agreements involving one or more parties that are subject to Québec tax...
Québec Government Adopts a New Governance Framework for Infrastructure Projects and Real Estate Holdings
In 2012, a SECOR-KPMG report highlighted deficiencies in the planning and management of public infrastructures in Québec, including cost overruns, suboptimal contractual practices and low standards. In order to overcome these flaws, Québec recently adopted the Public Infrastructure Act (the PIA). Partially entered into force in November 2013, the PIA centralized the management of public infrastructure projects and public real estate holdings under the auspices of a new Crown corporation, the Société québécoise des infrastructures (the SQI). It also implemented a new framework for the governance of public infrastructures.
Centralized management of public infrastructure projects and public real estate holdings
The management of public infrastructure projects and public real estate holdings was the responsibility of, respectively, Infrastructure Québec and the Société immobilière du Québec, a division that involved significant administrative redundancy.
This two-headed management has since come to an end. The coming into force of the PIA led to the merger of Infrastructure Québec and the Société immobilière du Québec into a single Crown corporation, the SQI. It now falls to this new entity to:
- firstly, support public bodies1 in the management of their public infrastructure projects by providing them with strategic, financial, administrative and contractual consulting services; and
- secondly, develop, maintain and manage the real estate holdings of public bodies through, specifically, the acquisition, construction, lease, maintenance and sale of buildings.
But there is more. The PIA breaks new ground by giving the SQI the authority to directly manage and control major infrastructure projects, including projects valued at $40 million or more, and those relating to certain healthcare and social services institutions. As such, the SQI may, inter alia, proceed with calls for tenders and enter into any agreement. By comparison, the predecessor to the SQI, Infrastructure Québec, solely had a supporting role with regard to major projects.
Only road infrastructure projects fall outside the scope of the SQI. Currently under the responsibility of the Minister of Transport, road infrastructure projects could nevertheless soon fall under the umbrella of a new agency should Bill 68, An Act respecting the Agence des infrastructures de transport du Québec, be adopted.2
New framework for the governance of public infrastructures
The application of the PIA will eventually be expanded to include planning, management and oversight mechanisms concerning public infrastructure investments. Specifically, these mechanisms will:
- require that every Minister submit to the Treasury Board an annual management plan covering the public infrastructure investments of the Ministry and public bodies he or she oversees;
- clarify the criteria for prioritizing public infrastructure projects; and
- subject public bodies to standards on needs assessment, required authorizations, supporting documents and public infrastructure project closures.
Furthermore, the PIA grants the Treasury Board the power to compel public bodies to take corrective measures in case of non-compliance with the new governance framework.
After having overhauled the conditions for awarding public contracts, Québec now tackles the reform of the internal management of public infrastructure contracts. This streamlining is expected to benefit businesses that will now have access to a one-stop shop, and soon to more uniform guidelines for contracting with public bodies in the context of real estate and infrastructure projects.
1 For the purposes of the PIA public bodies include government ministries, agencies whose personnel is appointed pursuant to the Public Service Act, school boards and the Agence métropolitaine de transport.
2 Bill 68 was presented to the National Assembly on December 4, 2013, but has yet to be debated.
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