FAQs
Funding
Q: How much will the new Hospital cost to build?
A: In the best interest of the project, providing an estimate at this stage is premature and could jeopardize the competitive procurement process. We want to obtain the most favourable proposals from bidders and providing an estimate could undermine that opportunity. Full project costs will be disclosed publicly following financial close in Spring 2011.
Q: How will the project be financed?
A: Financing for the new Hospital will follow the provincial government’s Alternative Financing and Procurement Model (AFP). Under this model of financing, the private sector is responsible for the design, construction, financing and maintenance of the project. We will pay for the project over a 30-year term, a bit like paying a mortgage. The hospital will remain publicly owned, publicly controlled and publicly accountable.
Q: What is the Alternative Financing and Procurement Model (AFP)?
A: AFP is an innovative way of financing and procuring large public infrastructure projects. It leverages private sector resources and expertise for large, complex public infrastructure projects like the New Oakville Hospital.
AFP also provides the opportunity to transfer project risks to the private sector, which commits to delivering projects on time and on budget. For more information about AFP projects, please visit Infrastructure Ontario’s website at www.infrastructureontario.ca
Q: What are the benefits of an AFP project?
A: The AFP approach is generally suitable for large, complex projects. However, not all projects lend themselves to this model.
AFP transactions are governed by the principles set out in the government’s Building a Better Tomorrow Framework for planning, financing and procuring public infrastructure.
This approach brings in private-sector expertise, ingenuity and rigour to the process of managing and renewing Ontario’s public infrastructure, but preserves public ownership of core public assets such as hospitals. It works towards:
- Minimizing cost and schedule overruns;
- Better coordination between design, construction and long-term maintenance and building services;
- More accountability throughout the planning, construction and maintenance phases of each project; and
- All processes must be fair, transparent and efficient.
Q: How is the community supporting the Hospital financially?
A: The contributions of the community are a vital component of the Hospital’s Local Share Plan. The local share is the portion of funding for which a hospital is responsible.
The provincial portion of eligible construction costs is 90 per cent. Hospitals are responsible for 10 per cent of the construction and development costs and the 30-year maintenance and lifecycle program. The hospital is also responsible for 100 per cent of non-eligible construction costs (retail space, parking, etc.) as well as the costs associated with the purchase of new and replacement furniture and equipment.
The Town of Oakville has committed to supporting the local share plan and the efforts of the Oakville Hospital Foundation will also be instrumental in fulfilling the local share.
Q: How will the Hospital fulfil the local share?
A: The local share plan is comprised of a number of different revenue streams including:
New Oakville Hospital Capital Campaign ($60 million goal)
- Fundraising led by the Oakville Hospital Foundation
Halton Healthcare Services ($270 million +/- 15%)
- Parking revenue
- Patient services revenue
- Retail revenue
Town of Oakville (up to $200 million)
- $130 million at substantial completion
- $40 million as required over a 30-year period to fund lifecycle maintenance costs
- Another $30 million at substantial completion if deemed necessary
Q: Have other municipalities contributed to hospital projects
A: Yes, communities across Ontario have been asked to contribute financially to their local hospital projects. A local share is required for all large-scale hospital construction projects in Ontario. Locally, Joseph Brant Memorial Hospital and the Niagara Health System have requested and received support from their municipal governments for their local share plans.
Q: Is the local share for Oakville higher than others?
A: The local share is higher than those that have been requested to support smaller hospital construction projects, which have consisted primarily of renovations and/or additions to existing infrastructure. Many of these projects do not include the 30-year lifecycle and building maintenance program. This feature contributes to the cost of our project but ensures the condition of the hospital will be maintained in opening day condition for 30-years. The provincial government pays for 90% of the lifecycle and maintenance costs, the remaining 10% is captured within the local share plan.
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