## Canada 

In Canada, it is estimated that the infrastructure deficit --- for public buildings, roads, bridges, sewers, electrical grids, water purification plants and other critical infrastructure --- ranges up to approximately $570 billion. (1) There is significant private investment in infrastructure in Canada and P3s are a well-established model for infrastructure delivery in several provinces, notably Ontario, British Columbia, Alberta and Quebec, and at the federal level. 

In Canada, Capstone continues to explore opportunities in the power sector, including operating facilities and development-stage projects, and believes the public-private partnership segment offers potential opportunities. 

In the electricity sector, it is estimated that about $294 billion will need to be invested between 2010 and 2030 to maintain existing generation, transmission and distribution infrastructure, meet market growth and accommodate a changing generation mix. (2) In addition, the renewable energy sector is expected to continue to experience activity in Canada, although at a slower pace than in recent years, reflecting government policy imperatives with respect to carbon reduction, climate change management and job creation. 

Canada enjoys an increasingly centralized and coordinated P3 market. There are currently 206 P3 projects across the country, primarily at the provincial or federal level, either in operation or in development representing an estimated cumulative investment of approximately $63.5 billion.$^{3)}$ Canada’s P3 pipeline is increasingly diverse, featuring a growing number of urban transit projects and offering the potential for more water/wastewater projects as municipalities must meet more stringent federal government compliance standards. Across Canada, the infrastructure spending of municipalities is comparable to that of the provinces yet the number and total value of P3 projects delivered by municipalities lags in comparison, creating the potential for increased adoption of the P3 model. 

Capstone is primarily targeting P3 opportunities in transportation, such as roads and public transit, bridges and tunnels; water and wastewater; and government buildings such as schools or hospitals. Capstone emphasizes market P3 opportunities where the project is operational or near to completion, thereby offering greater cash flow predictability with a low risk profile. 

## United States 

In the United States, infrastructure spending as a percentage of GDP has shrunk to about 2.4% from its peak of more than 3% during the 1960s.$^{(4)}$ In 2013, the condition of America’s infrastructure --- including water, transportation, public facilities, and energy --- was assigned an overall grade of D+ by the America Society for Civil Engineers, which measures infrastructure conditions and needs according to eight criteria, including capacity, condition, funding, future need, operation and maintenance, public safety, resilience and innovation. Since 1998, grades have averaged only Ds due to delayed maintenance and underinvestment across most categories. (5) 

In the United States, Capstone is primarily targeting opportunities in the power sector, both operating and development-stage projects, and utilities. The U.S. also has significant, unmet transportation infrastructure needs. 

While slow economic growth and a declining manufacturing sector have dampened current demand for power in the United States, the electrical grid is aging and requires significant investment by utilities to reduce power failures and interruptions and to meet evolving government policy imperatives with respect to carbon reduction and climate change management. These two factors are expected to support continuing opportunities in renewable power generation as well as the building of new baseload generation capacity, primarily gas-fired, to replace power facilities reaching the end of their useful lives and to meet future demand growth. 

The water sector also offers investment opportunities. The U.S. Environmental Protection Agency estimates water infrastructure investment needs in the United States over the next 20 years at more than US$500 billion. 

In addition, the P3 market in the U.S. is expected to continue to grow, with the strengthening of project pipelines in states that were early adopters of the P3 model, with more public authorities turning to the P3 method of procurement, and with increasing acceptance of P3s by the U.S. construction industry. 

