Lexpert Special Editions

Infrastructure September 2014

The Lexpert Special Editions profiles selected Lexpert-ranked lawyers whose focus is in Corporate, Infrastructure, Energy and Litigation law and relevant practices. It also includes feature articles on legal aspects of Canadian business issues.

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Lexpert®Ranked Lawyers Hull, Robert G.S. Gowling Lafl eur Henderson LLP (416) 369-7313 robert.hull@ gowlings.com Mr. Hull specializes in infrastructure/ energy fund formation on behalf of both managers/sponsors and institutional investors. He also represents domestic and international clients active in the Canadian infrastructure and energy sectors. Jenkins, William K. Dentons Canada LLP (403) 268-6835 bill.jenkins@ dentons.com Mr. Jenkins represents borrowers or lenders in connection with domestic or cross- border project fi nancings, syndicated credit facilities, private or public placements of debt securities and joint ventures, particularly in energy and transportation. Johnson, Philippe Davies Ward Phillips & Vineberg LLP (514) 841-6501 pjohnson@dwpv.com Mr. Johnson is a partner in the Corporate/Commercial, M&A, Commercial Real Estate & Infrastructure practices. He is advising CSX Transportation, a leading North American railway company, with respect to its development of various projects in Quebec. Hurley, John Gowling Lafl eur Henderson LLP (514) 392-9431 john.hurley@ gowlings.com Mr. Hurley has extensive experience in commercial law, with special emphasis on First Nations, energy and infrastructure, government relations, regulatory matters, environmental law and international development. Johannsen, Helmut K. Fasken Martineau DuMoulin LLP (604) 631-4819 hjohannsen@ fasken.com Mr. Johannsen, also a professional engineer, focuses on construction law including infrastructure, PPP, procurement, dispute resolution, litigation, insurance and contracts. His experience incorporates hydro, rapid transit, LNG and pipeline projects. Johnston, R. Brock Clark Wilson LLP (604) 643-3116 rbj@cwilson.com Mr. Johnston advises government, public organizations and the private sector on publicly funded infrastructure projects, including rapid transit, waste water treatment, biofuels, bridges, university buildings, sports facilities and hospitals. The North | 19 to keep the existing fl eet running, QEC has been urged by some ratepayers to fi nd alternative fi nancing methods to build zero-emissions hydro plants. But hydro generators and transmission lines would cost additional hundreds of millions, at least. "Everything is amplifi ed in the North," says Paul Blundy, infrastructure expert with Bennett Jones LLP in Toronto. Projects are more costly to build and operate, and very short shipping and construction seasons multiply the costs of the smallest delay or procurement oversight. "Everything that makes P3s a good idea in the South is amplifi ed in the North," Blundy says. In a vast, remote land- scape with a tiny population – some 35,500 people in all of Nunavut – government revenues are stretched to breaking. And debt fi nancing for needed infrastructure is rarely an option because Ottawa imposes debt caps on the territo- rial governments of Nunavut and the Northwest Territo- ries (NWT). In the cash-constrained North, public-private participa- tion (P3) models – where private investors fund up-front design, procurement, construction, operations and mainte- nance in return for an annual government reimbursement over 20 or 30 years – can be especially attractive, Blundy says. In a typical P3, government off -loads risk by locking in a contracted annual payment for the life of the project. e contracting government avoids lumpy capital outlays and acquires private-sector operating and maintenance ex- pertise it might otherwise lack. Blundy says the big challenge to Northern P3s is always identifying a signifi cant, long-term revenue stream, either from user tolls or government funding. " e heart of the northern infrastructure challenge is money," says Scott Northey. " e more they need the infra- structure, the less money they have to fund it." Northey is COO of the Nunavut Resources Corporation (NRC), a wholly owned subsidiary of the Kitikmeot Inuit Association, formed in 2010 to fi nd innovative ways to fund resource development projects in Nunavut. In its eff ort to prime the pump of Northern development, he says, NRC uses a modifi ed P3 formula. "If you're a mining company, you [typically] put in a $3-billion project with a $1-billion road," Northey explains. If NRC takes on the road as a separate project, it suddenly makes the mine a lot more likely to proceed, with all its jobs, training and taxes. NRC fi nds a private-sector partner to invest in the road and seeks to access government funds for

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