Two Ways to Pay for New Schools

Sackville Schools 2020’s goal is to deliver a 21st century learning environment to the students of Sackville and the larger Tantramar Region family of schools. Previous weeks’ articles have shown what a 21st century educational environment looks like, how experiential and outdoor learning fits into a student’s journey through school, and how great schools benefit not only students and teachers, but whole communities.

There has been a raft of government announcements this year aiming at improving educational opportunities for New Brunswick students, including Federal infrastructure funding, the Province’s New Economy & Education Fund, and combined Federal/Provincial funding of post-secondary experiential learning programs (that ultimately integrate with local schools and communities.)

How different jurisdictions have paid for new school construction

There are basically two models for financing new schools. The first is the ‘traditional’ process where the Department of Education approves a budget, and the Department of Supply and Services designs and builds the building, contracting out work as necessary. The government owns and maintains the schools in these cases.

The other model is called a Public-Private Partnership (P3, for short). In P3 cases, the provincial government enters into a contract with a private developer who finances the design and construction of the school, builds it, and then leases it back to the government, usually over a period of 20 to 35 years. At the end of the lease, the government can choose to buy the building, continue leasing it, or simply walk away.

When properly administered, P3’s have a history of success across the country and around the world.

Alberta has enjoyed positive outcomes with the P3 financing model. Through two phases of construction, using a P3 model to design, build, finance and maintain 18 schools, and then 10 schools, the Alberta government saved $97 million and $105 million, respectively, over 32 years (in today’s dollars), compared to a traditional approach. The schools were also delivered two years earlier than with traditional methods.

Interestingly, in the most recent phase of school construction, the results of the P3 versus traditional evaluation were different: using a P3 to design, build, finance and maintain the 19 schools would have cost more than a traditional design-bid-build approach, so a P3 model was not used in that phase of construction.

Today, Saskatchewan is forecasting that the province will save $100 million over the contract term for 18 new schools.

Closer to home

In 2010, Northrop Frye Elementary School in Moncton and the Eleanor W. Graham Middle School in Rexton were built using the public-private partnership model. Both schools are LEED gold certified, opened on budget and in a shorter timeframe than traditional models would have allowed.

Nova Scotia, which was an early implementer of the P3 financing model, has not always realized positive outcomes from their experience. That province’s Auditor General found that the province had spent $52 million more on the construction and maintenance of 39 P3 schools than a traditional financing model would have delivered.

The Auditor General’s report recommended specific processes and oversight to ensure future P3 contracts are rigorously evaluated and properly managed over their lifetime. Much was learned over these early periods and there are now processes similar to these recommendations found within the successful P3 financing programs shared above, including the New Brunswick Department of Education’s approach, as well as many others throughout the country and the world.

Sackville Schools 2020 has met with several P3 developers and toured the amazing learning spaces developed under this model. We feel that the Province should seriously consider the P3 funding model for Sackville’s new 21st century schools. Entering into the right P3 contract can speed along the building of efficient, modern educational facilities, at a cost at or below what the traditional building model can provide, as well as create the foundation for an integrated learning environment that reflects the needs of the community. Further, as our new school infrastructure has the potential to be integrated with other community development projects, as discussed in other articles appearing in this space, partnering with a private developer may offer advantages - both economic and strategic, for building out Sackville’s school infrastructure.


(Top photo credit: Fielding Nair International)