Bill 73: Alberta’s “New” Proposed Capital Projects Governance Framework
The Alberta government has introduced a new governance framework for the review and funding of capital projects. Bill 73, the Infrastructure Accountability Act, was introduced to “help guide government decision-making around capital projects to best support jobs and the economy, as well as provide Albertans with the public infrastructure they need”, and responds to several recommendations from the 2019 MacKinnon Report on Alberta’s Finances.
With the implementation of the province’s new prompt payment and adjudication regimes looming, significant change is in store for Alberta’s construction industry in the coming years. While the specific purpose of Bill 73 remains somewhat vague, at least on First Reading, stakeholders should be aware that Bill 73 lists several evaluative criteria and formalizes a requirement for the government to introduce capital plans that look two decades into the future; as such, project proponents should consider and ensure that any funding proposals are in alignment with same.
Summary of Key Changes
At a high level, the key changes proposed in the First Reading of Bill 73 include:
- the establishment of 6 criteria that the government must consider when evaluating a capital planning submission, such that projects would be evaluated based on how they:
- address health, safety, and compliance needs;
- align with government priorities and strategies;
- foster economic activity and create jobs;
- improve program delivery and services;
- consider life cycle costs and whether it will generate a return on investment; and
- enhance the resiliency of communities.
- the creation of a governance framework for developing the annual capital plan (the “Capital Plan”) by specifically outlining the roles and responsibilities for government ministries involved;
- the formalization of a “Deputy Ministers Capital Committee” to advise on the Capital Plan; and
- the legislation of the development and release of a “20-Year Strategic Capital Plan”, to be released within one year of the Infrastructure Accountability Act coming into force, and be updated at least every 4 years.
The 6 “New” Criteria
Under the draft legislation, the Responsible Minister will be required to “analyze and evaluate capital planning submissions […] according to the criteria outlined in section 4 and other criteria the Responsible Minister considers appropriate and make recommendations to the Treasury Board relating to capital planning submissions.” Interestingly, the draft legislation does not provide for a public scoring or ranking system showing how specific projects are judged based on the new criteria, nor does it provide detail on the relative value or importance (if any) of each criteria vis à vis the others. Further, Bill 73 does not apply to municipal projects.
In terms of economic impact, the Minister will be required to consider “the extent to which the project or program is expected to result in positive economic impacts, including direct or indirect job creation and economic development and activity.”
Regarding a proposed project’s ability to enhance the “resiliency” of communities, the current draft legislation outlines a list of both broad and specific considerations, which include: enhancing the resiliency of existing infrastructure relied on by members of the community; protecting community members and assets from natural disasters; providing a remote community with core infrastructure; preserving or enhancing the community’s culture and heritage; and improving social and environmental circumstances in the community and local conditions generally.
Perhaps the most vague of the new criteria is regarding alignment with the government’s priorities; under the draft legislation, the Responsible Minister shall consider “the extent to which the project or program aligns with the government’s strategic objectives, as identified in the government’s strategic and business plans, and other government priorities.” Clarity through future drafts or subsequent regulations may be helpful on this front.
The 20-Year Strategic Capital Plan
Further, the introduction of a 20-Year Strategic Capital Plan is a noteworthy development, given that the province’s capital plans are currently released every four years. The Preamble of the draft legislation states, among other things, “the Government of Alberta is committed to infrastructure planning that is long term, priority based and strategic.” Bill 73 currently provides that the Responsible Minister “shall prepare and publish a 20-year strategic capital plan within one year of the coming into force of this Act and at least once every 4 years thereafter.” One wonders what language may be included in future drafts of Bill 73, or any subsequent regulations, to clarify the relationship between these two plans and to outline what kind of metrics or projections may be required for the purposes of the long term plan.
Bill 73 represents a continuation of the Alberta government’s keen interest and focus on the construction industry, and follows recent proposed and upcoming changes to the prompt payment and construction lien system through Bills 37 and 62, which our team has previously written about here. Unsurprisingly, infrastructure spending and development has been identified by many governments throughout Canada and beyond as a priority coming out of the COVID-19 pandemic, and it will be interesting to see what impact these specific criteria, and the implementation of a long-term capital plan, will have on future projects in Alberta.
With these significant changes on the horizon, it is more important than ever for industry players and stakeholders to have competent counsel with a deep understanding of construction law and the capacity to navigate through this new capital planning regime competently and effectively. The lawyers at McCarthy Tétrault have extensive experience in the construction industry and can help you navigate this complex legislative scheme.
We will continue to monitor the progress of Bill 73 and will provide further updates as they become available.
 Press Release dated October 25, 2021: https://www.alberta.ca/strengthening-infrastructure-planning.aspx
 s. 1 defines “full life-cycle cost” as: “the total cost associated with a capital asset, including the costs of acquiring, constructing, developing, maintaining, improving, operating or disposing of the asset, commencing with the identification of the need for the asset and terminating with the disposal of the asset.”
 s. 3(c).
 s. 4.
 s. 4(b).
 s. 6(1).