Government Affairs and Public Law Litigation

There is currently much debate about what is the “best” infrastructure project delivery method. Design-build-finance-maintain? Collaborative model? Alliancing? Another way? Even though the labels may change, one underlying reality remains: The structure best suited to financing, whether private or public, stands the best chance of success.  After exploring the reasons why infrastructure financing needs to be modernized and reviewing emerging models, our series is finally getting to the heart of the matter: the contractual framework and risk allocation. This is where a project transitions from just a vision to reality.  That is because, while risk allocation may be viewed differently by various stakeholders, the requirements of the financier or public authority are what ultimately dictate a project's success or failure. Stakeholders would therefore be well advised to keep this in mind right from the design phase.  The bankability of a project, that is, whether it can actually be financed on acceptable terms, is a matter of contractual discipline aimed at stabilizing costs and revenues, making risks manageable and establishing a management structure that can deal with deviations without letting the project spiral out of control. Put another way, a project is financed risk by risk, each one (supply, construction, operation, or refinancing) must be assessed, mitigated and contractually assigned to the party best positioned to manage it. The same principles apply whether the goal is to secure bank financing or simply stay within a public budget. Given the length of this article, we can only provide a brief overview of these principles.  Project financing in short: special purpose vehicle, financial model and off-balance-sheet  The most common structure, especially in public-private partnerships (PPPs), is a special purpose vehicle (SPV), which, depending on the type of project, is an entity created to contract with the public authority, own the future infrastructure and carry the debt. This entity raises equity capital from developers, builders, operators and investment funds, and debt capital from banks, bond investors and development finance institutions. In limited-recourse project financing, the purpose of an SPV is the resulting compartmentalization: lenders are repaid from the project’s cash flows, without a security interest (or with a limited security interest) in the shareholders’ assets. The idea is not new. A famous predecessor is the Suez Canal Company, a joint-stock company founded in 1858 to carry out a single project by raising capital based solely on the project’s potential.1 What has changed is the financial model underpinning the transaction: It has become far more sophisticated. It is now a complex labyrinth of Excel sheets, with a continuous thread of cash flows under the firm control of the lenders, with all project documentation bringing the model to fruition within a coherent, “closed system.” The model thus dictates how rigorously due diligence is conducted, how cash flow allocation is prioritized (operations, reserves, debt service and distributions), and how strictly dividends are capped as long as safety margins are not met.  This financing structure is not the only possible option. For example, for smaller projects or less liquid markets, we often see full-recourse corporate financing. Here, SPVs backed by corporate guarantees facilitate closing when pure non-recourse financing is out of reach, but the result is that project compartmentalization is reduced and shareholders face more exposure. No matter which model is available or chosen, the project owner and developer must be as disciplined as a lender, even if no financier needs to be brought on board. A project carried out and paid for with public funds must be just as thorough as a private one: A budget must be kept and value for money achieved through the same assessment of risks and the same search for the party best placed to assume them.2 Even when no funds are sought from a bank, a banker’s perspective is still indispensable.  Bankable income  The risk differential is considerable between a model with contractually secured or regulated revenues and one left to the mercy of fluctuations in demand, prices or government decisions. A project’s risk profile will ultimately dictate interest rates, acceptable debt levels and even whether the project can achieve financial close. The solutions depend on the type of project. Examples include pricing regulated by a credible regulator for a transport project; long-term purchase agreements at a fixed price or a price linked to raw materials in the energy or petrochemical sectors; or availability payments in PPPs, where compensation is based on the provision of services under the contract rather than on the number of users. Of course, much civil infrastructure generates no income from users, instead, the public authority compensates the operator for availability. In all cases, the cash flow must be predictable and viable, but the payment mechanism must be enforceable and within the financial capacity of the final paying party.   While availability payments in a PPP shift demand risk, they also concentrate revenues with a single public authority, and that authority’s creditworthiness will dictate whether other guarantees, such as budgetary safeguards and dedicated payment mechanisms, are required.  A toll project is bankable if traffic assumptions are conservative, toll rates are adjustable and social acceptability is addressed in advance. In addition, predictable revenues at a rate that covers debt service open the door to signing a credible—and therefore bankable—operating contract. In an industrial project, a solid offtake agreement must substantiate the financial model’s projections, and when a cost cannot be fixed in advance, it must be linked to the revenues it drives, through indexation or cost pass-through, so that the two vary in tandem rather than in opposite directions.  Assessing, mitigating and allocating risks  The essential preliminary step before drafting any contract is to identify risks, evaluate their probability and impact, and determine appropriate mitigation measures for each. Only then can the contractual framework be established, allocating each residual risk to the party best suited to assume it. Debt financing is only available for risks that have been identified, quantified, and allocated. This is why lenders demand consistency: If the SPV guarantees a service standard to the public authority, it must be able to “procure” this exact standard from its contractors. Otherwise, the SPV will retain the risk and the project will become difficult to finance.  Construction provides the most compelling illustration of this principle. To establish the price of a project, a market-tested cost estimate is conducted (ideally through real bids), and then a fixed-price, fixed-deadline turnkey EPC contract is concluded. Lenders favour this specific structure precisely because it establishes the cost of completion. The contractor includes a margin for its own contingencies, which represents the price of certainty. Any residual default risks are covered by performance bonds to ensure project completion if the contractor falters, letters of credit guaranteeing the reimbursement of advance payments, payment holdbacks and late penalties. These mechanisms ensure that, whatever happens, the project will be delivered on budget, in compliance with the financial model.  However, even though we prefer fixed-price EPCs, they are not used across the board. In Quebec and Ontario, more flexible procurement is often used, such as EPCM, alliancing and progressive design-build, where the contractor is engaged early in the process but the price is not locked in from the outset. A target price is established during the draft-design phase, featuring a risk-and-reward sharing mechanism for overruns and savings, typically capped, to align interests without placing the entire risk burden on one party.3 However, the golden rule of finance still holds true: the less certain the price, the greater the uncertainty, leading the lender to require higher equity, completion guarantees or shareholder support—driving up financing costs to account for the risk.  The contract must be structured for the long term, as infrastructure projects are financed over decades in a changing world. Legislative changes, superior force, climate and geotechnical hazards must all be anticipated to prevent an external event from triggering a default. In addition, lenders are often granted step-in rights through direct agreements with the public authority, allowing them to take back control should the contractor default on its obligations, thereby avoiding termination and ensuring service continuity. When they are well-designed and have precise triggers and realistic remediation deadlines, such mechanisms also serve the public interest by providing a window for corrective action before the government has to step in.  Capitalization and leverage  The level of financial leverage and the quality of the SPV’s capitalization are direct determinants of bankability. Shareholders often have an interest in maximizing debt, as it is generally less expensive than equity and increases returns. The lenders, for their part, want an SPV that is sufficiently capitalized to absorb shocks and maintain incentive alignment. If the equity portion is marginal, financial close is often more difficult and contractual protection requirements may increase. Should the economic balance deteriorate, an operator with limited financial exposure may prefer to withdraw rather than incur prolonged losses, leaving the public authority facing a forced renegotiation. Minimum equity requirements, combined with restrictions on the sale of shares prior to commissioning and a stabilization period, are specifically designed to avoid such misalignment.  Lastly, when a public authority awards a contract before financing is fully committed, the interval between the award and financial close exposes it to renegotiation pressure, because lenders will impose conditions precedent as they finalize their due diligence. To mitigate this risk, the public authority will adopt a banker’s perspective by including credibility requirements for the financing plan right from the tender stage. Where appropriate, it will also incorporate incentive or disciplinary mechanisms, such as bid bonds, more advanced financing commitments, optional pre-arranged financing. Over time, bankability requires that the contract cover the allocation of refinancing risk and the allocation of refinancing gains, if any, so as to avoid difficult future negotiations on value for money.  The mechanics of public intervention  Public intervention is compatible with the market, provided that it is intended to remove specific barriers rather than replacing the market. A public subsidy or loan can fill a viability gap, offset the lack of long-term maturities or mitigate an excessive risk premium. Partial guarantees and credit enhancement, which allow an institutional guarantor to cover a portion of the default risk, help to make private commercial debt available at a lower cost. Other financing structures can go even further. The public authority can waive most of its defences against the lenders once the work has been completed and accepted. This is called “debt assignment,” a typical example being forfaiting, a well-known mechanism used in European PPPs. The public authority’s debt thereby becomes almost unconditional and can be transferred to the banks, which no longer carry project risk, but instead take on direct exposure to the public authority. This drives financing costs down. Of course, the intent is never to use public funds to serve private interests or to manage them any less rigorously. Ultimately, any commitment of public funds calls for the exact same discipline in risk management and contractual structuring.  Conclusion  We can all dream of a better world, but we need to give ourselves the means to build it. Private financing comes at a cost, and that cost justifies the discipline it forces on a project. A non-recourse lender only signs off on what they have assessed, quantified and mitigated, and such an exacting approach benefits the entire project. Whether a banker is involved or not, structuring contracts in this way is the best guarantee of success.  Sir William Cornelius Van Horne, who directed the construction of the Canadian Pacific Transcontinental Railway, completed in 1885 in less than half the planned time, is quoted as saying “It has always been a profound belief of mine that the things which people regard as next to impossible are the easiest things to do”.4 Yet the man was anything but a dreamer. He knew that the subsidies, in money and land, would only be paid as railway sections were completed, inspected and commissioned, and he was known for his iron discipline in payment sequencing and the choice of contracting partners. Still today, such a rigorous approach is what turns a project that exists only on paper into one that is actually built.  Encyclopædia Britannica, “Suez Canal”, https://www.britannica.com/topic/Suez-Canal  OECD, 2012, Recommendation of the Council on Principles for Public Governance of Public-Private Partnerships, https://legalinstruments.oecd.org/public/doc/275/275.en.pdf; and World Bank, 2017, Public-Private Partnerships Reference Guide (Version 3), https://ppp.worldbank.org/sites/default/files/2024-08/PPP%20Reference%20Guide%20Version%203.pdf Gouvernement du Québec (2024), Stratégie québécoise en infrastructures publiques — Des infrastructures de qualité, réalisées plus rapidement et à meilleur coût, https://cdn-contenu.quebec.ca/cdn-contenu/adm/org/sous-secretariat-infrastructures-publiques/publications/strategie/strategie_infrastructures.pdf ; Infrastructure Ontario, Choosing the Right Model for Each Project, https://www.infrastructureontario.ca/en/what-we-do/major-projects/model-selection/ Red River North Heritage, Creating a Legacy: The Van Horne Farm part I, https://redrivernorthheritage.com/creating-a-legacy/; Dictionary of Canadian Biography (1998), Van Horne, Sir William Cornelius, https://www.biographi.ca/en/bio/van_horne_william_cornelius_14E.html Source used throughout the article: World Bank, 2025, Infrastructure Monitor 2024 , https://openknowledge.worldbank.org/server/api/core/bitstreams/de04d2f1-f59f-499d-9aa1-2bf052d74eb3/content 

In the Henry decision rendered on January 16, 2026,1 the Professions Tribunal reiterated what framework applies to a guilty plea in disciplinary matters. In this case, the professional had pleaded guilty during his conviction hearing. After having ascertained that his pleas were made freely and voluntarily, the Disciplinary Council of the Ordre des dentistes (the “Council”) declared him guilty. However, the Council had not ensured that the professional admitted to the facts relating to the key elements of the offences at issue. During the penalty hearing, the professional raised questions about his guilty pleas. Although the Council had considered whether his pleas were valid and whether to withdraw them and return the case to a conviction hearing, the hearing continued and penalties were imposed on the professional. On appeal of the Council’s decision, the Professions Tribunal concluded that the Council had erred in accepting the professional’s guilty pleas when it had become clear that he denied the facts put forward in support of the charges against him. The Professions Tribunal concluded that the Disciplinary Council of the Ordre des dentistes had erred in accepting the appellant’s guilty plea when it had become clear that he denied the facts put forward in support of the charges against him.   The Professions Tribunal reasons were based on the following: The Professional Code2 contains no specific provisions governing the entering of a guilty plea.3 In the absence of specific rules, disciplinary law can draw inspiration from the criteria developed in criminal and penal law.4  By pleading guilty, the professional waives their right to a formal investigation and associated procedural safeguards.5  Pleading guilty is a significant decision in disciplinary proceedings, as it inevitably brings the investigation to a close and has detrimental consequences on the professional who pleads guilty.6 This decision serves as a reminder of the two-prong test7 a Disciplinary Council must use to accept a guilty plea: Admission by the professional: The professional must have formally admitted to the key legal elements of the offence.8 To be valid, a guilty plea must be voluntary, unequivocal and made with full knowledge of its effects and consequences.9 Acceptance by the Council: The Council may only accept the plea after ensuring that the professional knows and understands the nature of the offence they are charged with and the effects of their guilty plea. The Council must also confirm that the professional admits to the facts relating to the key elements of the offence in question.10 This decision also introduces the requirement to submit a joint statement of the facts11 or provide an account of the facts that led to the offences in order to properly contextualize them.12 Failure to comply with these requirements could result in the professional’s guilty plea being contested or dismissed by the Disciplinary Council. More recently in the Fernandez decision,13 the Disciplinary Council of the College des médecins was called upon to rule on whether the requirements of the Henry decision applied, in particular regarding the filing of a joint statement or account of the facts giving rise to the offences. In this case, the Council had taken cognizance of the Henry decision after having accepted the professional’s guilty plea, and no joint statement had been filed. After allowing the parties to present their observations, the Council declared itself satisfied with the parties’ claims that the Fernandez case differed from the Henry case in that Dr. Fernandez had admitted to the facts relating to the essential elements of the charge, that he had filed a 17­­-page statement, and that the Syndic had filed documents containing the accounts of eight patients. It will be interesting to follow how case law will develop on this issue to confirm what direction the various disciplinary councils will take. The members of Lavery’s professional and disciplinary law team regularly represent professional orders and professionals. They are available to advise you and answer your questions. Summary A guilty plea may expedite the disciplinary process, but it has the effect of depriving the accused professional of certain procedural safeguards. It is important to ensure that the conditions of validity and acceptance of a guilty plea are met, otherwise it may be dismissed or overturned on appeal. Summary evidence must be taken before a professional pleads guilty, whether it be through the filing of a joint statement of facts, the presentation of an account of the facts by one of the parties or the submission of documentary evidence. Henry c. Dentistes (Ordre professionnel des), 2026 QCTP 1 2 CQLR C-26. Henry c. Dentistes (Ordre professionnel des), 2026 QCTP 1, para. 24 Id. Id. Id., para. 27 Id., para. 25 Id., para. 26 Id., para. 28 Id., para. 27 and 29. Id., para. 30 Id., para. 31 Médecins (Ordre professionnel des) c. Fernandez, 2026 QCCDMD 5

This bulletin addresses the same subject as a first bulletin we published on March 10, 2025, regarding Bill 89 tabled by the government. The bill was assented to on May 30, 2025, with a number of amendments and clarifications. The bill provides for major amendments to the Labour Code (L.C.) to improve the way in which the needs of the population are taken into account during labour disputes by introducing two new mechanisms, in particular. Firstly, it grants the Minister of Labour the power to refer parties to binding arbitration when the Minister considers that a strike or lockout is causing or threatening to cause serious harm to the public after unsuccessful mediation or conciliation. Secondly, it creates a framework for a new category of services to be maintained, those “ensuring the well-being of the population,” under which critical services will be maintained during strikes or lockouts. Having followed the parliamentary proceedings closely, we noted that a number of significant amendments were made to the bill since it was introduced. The time limit to negotiate services ensuring the well-being of the population was changed from fifteen to seven clear working days and the date of entry into force of the new provisions postponed to November 30, 2025. During the parliamentary debates, the Minister gave a few examples of what could fall under the concept of “social, economic or environmental security” for the population. Social security could be at stake in situations affecting the development of a vulnerable person, or in cases linked to poverty, isolation or food insecurity, among others. Economic security could also be compromised in similar circumstances, particularly when they affect the ability to get to work or earn wages. The concept of environmental security may include natural disasters or a significant deterioration in environmental quality, in particular. Although it will ultimately be up to the courts to rule on the scope of these new provisions, we believe that the points raised in parliamentary committee will affect how they are interpreted. The following table illustrates the main differences between the general essential services framework that apply to the public services covered by the Act and the new measures that can be put in place to protect the population:   Essential services among public services  Services ensuring the well-being of the population Special powers granted to the Minister Scope of application (subject to exclusions)  Public or comparable services (ss. 111.0.16 and 111.0.17 L.C.) Parties designated by the government by order (s. 111.22.4 L.C.) Any dispute, but does not apply to certain sectors or organizations listed in s. 111.32.1 L.C. Process by which dispute is rendered subject to mechanism ALT decision (s. 111.0.17 L.C.) ALT decision (s. 111.22.5 L.C.) Notice from the Minister to the parties (s. 111.32.2 L.C.) Application criteria Possibility of endangering public health or safety (s. 111.0.17 L.C.) Disproportionate impact on the social, economic or environmental security of the population, particularly that of persons in vulnerable situations (s. 111.22.3 L.C.) Labour conflict that causes or threatens to cause serious or irreparable harm to the public and unsuccessful intervention of a conciliator or mediator (s. 111.32.2 L.C.) Effect once subject to mechanism Right to strike temporarily suspended until legal requirements are met (s 111.0.17 L.C.)   Right to lockout prohibited in public services (s. 111.0.26 L.C.)   Continuation of strike or lockout after a decision making the dispute subject to the mechanism is rendered, unless exceptional circumstances warrant otherwise pending a decision by the ALT on whether the minimum services to be maintained are sufficient (s. 111.22.11 L.C.) Right to strike and lockout ceasing at the time indicated on the Minister’s notice (s. 111.32.2 L.C.) Procedure 1. Mandatory negotiation between the parties (s. 111.0.18 L.C.) 1. Mandatory negotiation between the parties within seven clear working days of an ALT decision (s. 111.22.7 L.C.) Parties consulted for 10 days on choice of arbitrator. If this fails, appointment by the Minister (s. 111.32.3 L.C.)   At any time, the parties may agree upon one of the matters of the dispute. The agreement shall be recorded in the arbitration award, which shall not amend it (s. 111.32.4 L.C.). Procedure 2. Forwarding of the agreement to the ALT for sufficiency assessment. If no agreement is reached, the union must forward a list of which services must be maintained (s. 111.0.18 L.C.). 2. Forwarding of the agreement to the ALT for sufficiency assessment (s. 111.22.8 L.C.) Dispute referred to arbitration, with necessary adaptations (ss. 111.32.2 and 111.32.5 L.C.) Procedure 3. ALT can help the parties to reach an agreement (s. 111.0.18 L.C.) 3. ALT can help the parties to reach an agreement (s. 111.22.7 L.C.) n/a ALT’s main role Sufficiency assessment, recommendations to parties in the event of insufficiency (s. 111.0.19 L.C.) Sufficiency assessment, determination of services to be maintained in case of insufficiency or if no agreement is reached (ss. 111.22.8 and 111.22.9 L.C.) Rule on the conditions of employment in dispute. Term and amendment of decisions The ALT’s decision to require a certified association and an employer to maintain services applies to each negotiation stage.   The ALT may also amend or revoke its decision at any time (s. 111.0.17.1 L.C.). The ALT’s decision to require a certified association and an employer to maintain services applies to the negotiation stage in progress.   The ALT may also amend or revoke its decision at any time, after the parties have submitted their views (s. 111.22.10 L.C.). Save for some exceptions, the award binds the parties for no less than one year or more than three years. The parties may, however, agree to amend the content, wholly or in part (s. 92 L.C.).   The arbitrator may at any time correct an award containing a mistake in writing or calculation or any other clerical error (s. 91.1 L.C.). Entry into force October 30, 2019 November 30, 2025 November 30, 2025 Note that we summarized the information above to make it concise. Given the complexity of the provisions in question and the many nuances and clarifications that may apply, you should read the specific provisions of the Labour Code or contact your legal advisors before making any decisions. We are available to answer any questions you may have about the impact of these new provisions on your business or to help you address such matters.

Understanding the House Agreement On June 6, 2025, a landmark settlement catalyzed a major turning point and reshaped the dynamics of American collegiate sports. By approving the House v. NCAA settlement, U.S. courts authorized universities to directly compensate their athletes for the use of their name, image, and likeness (NIL), which represents a significant departure from previous restrictions. In practical terms, NIL rights grant athletes’ exclusive control over their personal brand, enabling them to generate revenue from the commercial use of their identity. In addition to establishing a new legal framework, this settlement provides for a retroactive payout of $2.8 billion to be shared among Division I athletes, the National Collegiate Athletic Association (NCAA)’s top tier, who have competed since 2016. Building on the Supreme Court’s 2021 ruling in NCAA v. Alston, this development stems from the Court's determination that the NCAA’s restrictions on certain education-related benefits constituted antitrust violations. While Alston laid the groundwork for the commercialization of NIL agreements, the subsequent years were plagued by legal uncertainty and a lack of consistency in regulations surrounding the compensation of collegiate athletes. As states and universities implemented divergent policies and internal rules, former Alabama head coach Nick Saban posed a question that remains unanswered to this day: “Where does it end?” A Uniform National Framework at Last The House v. NCAA settlement establishes the first nationwide framework for compensating collegiate athletes. Starting in the 2025-2026 academic year, Division I programs will be permitted to allocate up to $20.5 million annually distributed among their athletes, covering both athletic potential and NIL monetization. This represents a major shift, as universities themselves, not just third-party sponsors, will now be able to directly fund their athletes. Simultaneously, an independent entity, the College Sports Commission LLC, has been established to oversee NIL agreements valued at $600 or more. The Commission will have the authority to approve, modify or reject deals that exceed fair market value or deviate from their intended purpose. For instance, NIL deals cannot reward athletic performance, influence recruitment or transfer decisions, nor serve as disguised salaries, practices commonly known as pay-for-play incentives. To ensure prompt and confidential resolution of disputes, the agreement introduces an expedited arbitration mechanism. Managed by an independent panel, this procedure requires parties to submit their documents within a short timeframe, with decisions to be rendered within 45 days of case initiation, and with no possibility for appeal. The goal is to safeguard athletes’ rights while preventing an overload of NIL-related cases in civil courts. In the wake of this recognition, the introduction of direct payments and the consolidation of the NIL framework are also reshaping traditional career paths for collegiate athletes. Increasingly, collegiate athletes are choosing to delay their entry into professional drafts, particularly in the NBA and NFL, to benefit from the financial and strategic advantages that college sports now offer. For athletes who are not guaranteed an early draft selection, staying in school can mean earning substantial income, sometimes comparable to that of professional athletes, while retaining greater control over the development of their athletic careers. In an increasingly competitive market, this new leverage is redefining the balance of power between athletes, universities, and professional franchises. This reform also resonates with the journeys of several Quebec athletes who came up through the NCAA, such as Bennedict Mathurin and Luguentz Dort, both of whom reached this year’s NBA Finals. Their stories illustrate how American college sports can serve as a powerful gateway that now financially recognizes and rewards its athletes. The fact that these players grew up in Montréal-North before rising through the NCAA makes it clear that Quebec is claiming its place in this evolving landscape, not only as a pool of talent, but also as a fertile soil for cultivating collegiate careers that are both inspiring and financially profitable. What Lies Ahead? While this reform represents a milestone, it also prompts significant new legal challenges. A pending appeal challenges the $2.8 billion retroactive payout, arguing that it could violate Title IX’s mandate for gender equity in federally funded education programs. Critics warn that, without clear safeguards, the distribution may exacerbate rather than reduce existing disparities between men’s and women’s sports. Furthermore, the Johnson v. NCAA case is currently pending before the U.S. District Court for the Eastern District of Pennsylvania, where collegiate athletes are seeking to be recognized as university employees, which would entitle them to a minimum wage and other labour protections. With over 350 universities and approximately 200,000 athletes impacted, the implementation of this reform is likely to vary significantly across institutions. Collegiate athletics is entering a new era of remunerated athletes but remains for the moment in a state of transition and uncertainty.