Bill 73: Increased Accountability for Capital Project Expenditures
The Government of Alberta seeks to increase transparency, predictability and accountability in its capital project spending decisions. On October 25, 2021, Alberta Infrastructure Minister Prasad Panda introduced Bill 73, Infrastructure Accountability Act propose six capital project evaluation criteria and a strategic capital plan. The bill is currently at its second reading in the Alberta Legislative Assembly.
Key Features of Bill 73
Bill 73 makes two important changes to the government’s decision-making process for capital projects.
1. Criteria for evaluating proposed capital projects
the Act sets out six criteria for the responsible minister to consider when evaluating proposed capital projects (excluding capital maintenance and renewal projects). The six criteria assess how a proposed capital project:
- Meet health, safety and compliance needs. Projects must reduce risks to the health, safety or security of Albertans or increase compliance with health, safety and other applicable laws.
- Align with government priorities and strategies. Projects must align with government strategic objectives, as identified in government strategic and business plans, and with other government priorities.
- Stimulate economic activity and create jobs. Projects must have positive economic impacts, including direct or indirect job creation and economic development and activity.
- Improve program delivery and services. the Act does not expand on this criterion.
- Generate ROI after considering full project lifecycle costs. Full life cost is the total cost associated with a capital asset, including acquisition, construction, development, maintenance, improvement, operation and disposal costs. Full life cycle costing begins with the identification of an asset’s needs and ends with its disposal.
- Improve community resilience. Examples include: improving the resilience of existing infrastructure that community members depend on; protect community members and property from natural disasters; providing a remote community with basic infrastructure; preserve or enhance the culture and heritage of the community; and improve social and environmental conditions in the community and local conditions in general.
the Act also allows the responsible minister to consider any other criteria from time to time. Minister Panda said not all proposed capital projects need to align with the six criteria. The criteria will not be used to publicly rank or rate proposed capital projects.
2. Strategic Capital Plan
the Act require the responsible minister to develop and regularly review a 20-year strategic capital plan. The plan will outline the government’s long-term vision for meeting Alberta’s infrastructure needs over a 20-year period. It will also guide future government infrastructure decisions taking into account economic, demographic and other trends. The plan must be published within one year of the Act entry into force and at least once every four years thereafter.
Bill 73 will have a significant impact on capital projects in Alberta. Therefore, we recommend that industry stakeholders familiarize themselves with the key elements of Bill 73 and initiate proactive planning measures. Bennett Jones’ capital and construction projects teams are ready to answer any questions or concerns about Bill 73. We will also continue to monitor Bill 73 and provide updates as they become available. available.