IFLR 1000
The Guide to the World's Leading Financial Law Firms

Pipelines, hydroelectric plants, highways, wind farms, bridges, hospitals, ports, prisons, and secret spy facilities - you name it, Canada built it, or at least arranged the financing for it, in 2010 and 2011. "Canada has been providing infrastructure projects at a rate that outpaces the US," remarks one partner.

In January 2011, the government announced its Building Canada Fund, an $8.8 billion investment which aims to create a stronger economy, cleaner environment and better communities through new infrastructure projects. The fund adds to Infrastructure Canada's seven-year, $33 billion Building Canada Plan. Introduced in 2007, the plan provides for a $25-million-a-year allocation to each province and territory, and is now mainly dedicated to existing projects. It also aims to encourage the use of the public-private partnership (PPP) procurement model, and in 2008 PPP Canada, a crown corporation, was created to further that objective.

"It's the busiest year we've had in PPPs," remarks one partner. As of January 2010, the Conference Board of Canada reported that PPPs accounted for 10 to 20% of total infrastructure spending for the year. The latest federal budget, announced in June 2011, required that all federal infrastructure projects creating an asset with a lifespan of over 20 years and costing $100 million or more must undergo a PPP procurement screen. Although the budget focuses primarily on deficit reduction, infrastructure is one of the few areas targeted for increased spending.

Practitioners noted an uptick in lending by Canadian banks for infrastructure projects, signalling renewed confidence in the economy. The maximum loan terms for domestic banks rarely exceed seven years, so the long-term loans required for project finance are still primarily held by European banks. However, "Domestic banks have been kept busy underwriting bond transactions for PPP projects, which they do almost exclusively," notes one attorney.

Ontario has been especially busy. "Infrastructure Ontario has the biggest, most aggressive pipeline in Canada," comments one partner. Also known as the Ontario Infrastructure Project Corporation, Infrastructure Ontario is a government-owned corporation established by the Ontario Infrastructure and Lands Corporation Act, 2011. The organisation is dedicated to the renewal and maintenance of the province's infrastructure. It does this primarily through the promotion of PPPs and by providing loans.

"On the power side, there has been a robust uptake in project finance in Ontario because of the feed-in-tariff (FIT) regime," notes another attorney. FIT's encourage external investment by guaranteeing energy prices, but the FIT's Domestic Content Requirement continues to draw negative attention, with opponents objecting that it violates World Trade Organisation (WTO) agreements. Japan, the US, the European Union and the WTO itself has been particularly vocal in expressing their opposition. The FIT has encouraged foreign companies to invest in the province to ensure that they are eligible under the domestic content requirement.

In May 2011, the government of Quebec announced Plan Nord - a massive 25-year-plan to develop the province's northern and Arctic regions. The project aims to revive Québec's mining industry, and is forecasted to represent an overall investment of C$80 billion ($84.1 billion).

Blakes Cassels & Graydon's expertise in infrastructure development has placed it at the forefront of the public infrastructure market. The firm has played a significant role in most public-private partnerships (PPPs) and alternative financing and procurement projects in Canada, and many major public procurement projects throughout the world. With offices in each of the major Canadian cities, Blakes' infrastructure/P3 group has attracted praise from clients.

"We're very happy with the skill level," says one client. "They're also very good at keeping me informed, updated, asking the appropriate questions, thinking issues through before they develop into problems and heading them off." Another customer observes, "They always meet our deadlines, whether reasonable or unreasonable."

Blakes acted for Ontario Power Generation in connection with bank and bond financing arrangements for the redevelopment of hydroelectric-generating assets on Northern Ontario's Lower Mattagami River. At a cost of C$2.6 billion ($2.7 billion), it is the largest hydroelectric undertaking in Ontario in the last 40 years, and will provide hydroelectric energy to the province. The first component of the financing, comprising a master trust indenture and a $700 million bank credit facility, closed in August 2010.

The firm also scored a double first, advising Fiera Axium Recherche on the first Québec health PPP, the $470 million financing for medical research centre Centre Hospitalier de l'Université de Montréal. The deal was also the first PPP in the province to be financed with bonds. The facility will accommodate around 110 research teams and approximately 500 temporary users, including students and patients.

Osler Hoskin & Harcourt's practice includes specialists in project finance, public-private partnerships (PPP), power and procurement.

Highlights over the last year include representing Atomic Energy Canada on various procurement, construction and consulting contracts. These include transactions relating to the development of the Waste Storage System, the FPS Retrieval and Transfer System, and the Fuel Packaging and Storage Building at Chalk River Laboratories. The work also includes the Ontario Nuclear Procurement Project, conducted by Infrastructure Ontario, involving the refurbishment and re-tubing work for the restart of several major nuclear generating stations.

Osler is also representing Pristine Power on the development of the York Energy Centre, a 393MW gas-fuelled plant. The firm's work includes negotiating agreements for the East Windsor Cogeneration, a 92MW facility that recycles wasted energy from the plant.

Led by Jonathan Weisz, the project finance group of Tory's was boosted over the past year after the opening of a new office in Calgary, adding to its presence in Toronto and New York. The project finance group added five new members, including two partners in its Calgary office - Kevin Fougere, formerly of Blakes, and Tony Cioni, former in-house counsel at Husky Energy. Tara Mackay was also promoted to partner in February 2011.

"They know their business and they know the industry," says one client, who deals primarily with Weisz and Fougere on energy projects. "A lot of the business we do is highly structured; you need to know what the risks are and what business and legal points you can compromise on. They do, better than anyone."

Torys is consortium counsel to Windsor Essex Mobility Group (WEMG) in a design-build-finance-maintain contract with the Province of Ontario for the construction of Windsor-Essex Parkway. The 11km, six-lane highway will include a service road that will connect Highway 401 to a new international crossing to Interstate 75 in Michigan. The parkway will be delivered using Ontario's alternative financing and procurement (AFP) model, which transfers most risks associated with the design, construction and maintaining of the parkway to WEMG. The contract's value to WEMG is approximately C$1.4 billion ($1.47 million), and over the 30-year contract term, the payments will come to around C$2.2 billion. The deal closed in December 2010.

Torys also represented the international lending syndicate: Dexia Credit Local, WestLB and Caixa Nova in its C$100 million ($105 million) project financing of the 20MW Aten solar energy project in Amherstburg, Ontario. When completed, the park will be one of the largest solar power facilities in Canada and is expected to produce enough electricity annually to power approximately 4000 homes. The facility, which involved several Renewable Energy Standard Offering Project contracts, is being developed by a subsidiary of Macquarie Power & Infrastructure Income Fund. The deal closed in November 2010.

Stikeman Elliott has been involved in many of Canada's most prominent project finance transactions over the past year. These include the first highway public-private partnership (PPP) financing in Ontario and one of the largest energy project financings in its history, the first PPP financing undertaken by the Government of Canada, the largest renewable energy project financing in the Maritimes and the first bank-bond and monoline-insured bond project financing transactions in the country. One client says the firm does "an excellent job" adding, "we can rely on them."

In a deal that closed in October 2010, Stikeman acted as lenders' counsel to the Spanish bank BBVA and Instituto de Crédito Oficial (ICO), a state-owned corporate entity attached to the Spanish government in regard to a $115 million credit facility provided to develop the largest wind farm in Nova Scotia, the Glen Dhu Wind Power project.

In the first PPP undertaken by the government of Canada, Stikeman acted for the lenders to the bidding consortium led by Bouygues, for the construction of the Royal Canadian Mounted Police E-Division headquarters, located in Surrey, British Columbia. Financing for the $182 million deal closed in May 2010.

BLG's public-private partnership group (PPP) comprises 50 lawyers in offices in throughout Canada, with a focus on health, transportation and energy. The firm has helped to shape and restructure policy framework for Canada's energy, water and hospital infrastructure. "Borden's claim to fame is working for the Ontario government," explains one competitor.

BLG has also featured on cross border work including advising SNC Lavalin, one member of a consortium made up of the Indian companies Reliance Infrastructure and Reliance Communications, which was chosen as the preferred bidder for the Mumbai Metro II PPP, an underground railway line in India. Financing closed for the $2.55 billion project in March 2011. It will entail the construction of 38km of metro line for a 35-year build-operate-transfer (BOT) concession from Charkop to Mankhurd, via Bandra.

In addition, BLG acted for Infrastructure Ontario and St Joseph's Regional Mental Health Care on two regional projects providing services to individuals experiencing severe and persistent mental illness. One facility will be constructed adjacent to the Parkwood Hospital in London and the second venue, in St. Thomas, will focus on forensic mental health. The deal was valued at an initial $830.5 million.

Davies Ward Phillips & Vineberg has participated in some of Canada's most complex financings in recent years, including the "fixed link" toll bridge to Prince Edward Island, the first privately-financed toll road in Canada. Other notable work includes the first public financing of airport revenue bonds.

The practice earns praise from competitors, with one calling it "a strong team". Partners Carol Pennycook and Gregory Southam are singled out for praise by one client, who describes them as "extremely bright, very knowledgeable, but also very commercial". He adds: "Davies is the best firm in Canada in this space. In addition to lawyers having a deep grasp of how to structure transactions, they are able to make the structures practical and meaningful in their implementation."

In 2010 the firm acted for The Manufacturers Life Insurance Company on the project financing of $87.5 million in credit facilities for the construction of two hydroelectric projects in the Bear Creek region of British Columbia. It also represented Manufacturers Life in connection with financing for the Mont Louis Wind Farm project in the Gaspésie region of Québec.

Davies also acted for Plenary Properties in the past year, which was awarded a contract by Defence Construction Canada to design, build, finance and maintain a new headquarters for Communication Security Establishment Canada (CSEC), Canada's foreign intelligence and national cryptologic agency. Spanning over 72,000 square metres and scheduled for completion in 2015, the top-secret, state-of-the art facility will become the new home of Canada's national cryptologic agency.

Clients had high praise for the Fasken Martineau project finance team: "Whether on the sponsor side or the lender side, I try to bring them into the transaction because it's always good to have a good lawyer," says one.

Another, who worked with partners Brian Kelsall and Ella Plotkin, says they did a "fantastic job," and gave the firm high marks for its ability to "synthesise complex structures into simple words, build consensus and lead discussion."

Fasken Martineau acted as counsel for the lenders to the winning consortium of ten international banks financing of the Windsor Essex Parkway project in Ontario, worth over $1 billion. The scheme was the biggest Infrastructure Ontario project to date. The road will connect to the new crossing to be built over the Detroit River between Canada and the US. The deal closed in December 2010, in a record six weeks.

The firm also acted as counsel to the federal government on the procurement and financing of over $1 billion in bonds for the landmark PPP (public-private partnership) Communications Security Establishment Canada Long Term Accommodation Project. The project is the new premises for the Canadian top-secret "electronic spy" facility. It was the first major federal PPP to take place in Canada, closing in January 2011.

One client notes of McCarthy Tétrault that when he started working with the firm ten years ago, it was one of the few firms with expertise in the power sector. "They had more experience than most," he says. "They understand the business side and what matters." Another client remarks, "A lot the transactions have been very complex, precedent-setting deals and they were excellent." Over the past year, the firm has acted for the agents and lenders in the up to C$126 million ($133 million) financing of a peaking plant facility Spy Hill, Saskatchewan. Canadian Imperial Bank of Commerce acted as both arranger and administrative agent for the lenders consisting of Canadian Imperial Bank of Commerce, Bank of Montreal and The Bank of Nova Scotia. The deal closed in April 2010 and was led by Stephen Furlan.

Under lead lawyer Gordon Willcocks, McCarthy also acted as counsel to Women's College Hospital (WCH) and its co-sponsor Infrastructure Ontario for the C$450 million design-build-finance-maintain redevelopment project. The project is being delivered using an alternative financing and procurement model. Women's College Partnership will receive annual payments from Women's College Hospital over a 30-year period following completion of the construction, which is expected in 2016. A new 630,000-square-foot hospital will be built on the current Grenville Street site, replacing all existing buildings and consolidating most services to a single location.

Ron Stuber leads the team at FMC, which has a diverse practice taking in energy, infrastructure and mining projects.

On the domestic front, the team last year advised the Fraser Transportation Group on the design-build joint venture for the construction of the South Fraser Perimeter Road. On the bank side the team also advised the Royal Bank of Canada as the administration agent for the financing of the York Energy Centre, a 450MW gas power plant in York Ontario.

The team also picked up work outside of Canada as Ron Matheson, James Clare, Matt Peters and Chris Turney acted for the Dundee Corporation and Sprott Resource Lending as the mandated lead arranger of a $417 million financing package for the development of the Tonkolili iron ore project in Sierra Leone.

The 12 partner team at Goodmans is led by Carla Salzman and Ira Berg.

Last year Salzman acted for Dexia Credit Local and Norddeutsche Landesbank Girozentale as lenders to Balfour Beatty on its bid for the St Thomas and Quinte Consolidated Courthouse BOTs (build-operate-transfer) projects.

Salzman and Berg were also called in by Dundee Kilmer Developments in regard to their bid for the athletics village in Ontario which is being prepared for the Pan American and Parapan American Games in 2015.

In the power sector, the firm was also kept busy advising on no less than six project financings related to new solar projects for Nord Bank and Deutsche Bank. For the former the firm acted on the financing of two new projects developed by SunEdison and SkyPower. In December 2010 the team also acted for Deutsche Bank on four other projects by SkyPower. The combined value cost of all six projects came to $210 million.