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Winnipeg Free Press - PRINT EDITION

Infrastructure spending is our economic health program

By: Chris Lorenc

Posted: 10/5/2012 1:00 AM | Comments: 0

Sustained investment in public infrastructure brings results -- enhanced economic productivity, higher competitiveness, and therefore, better rates of economic growth. And, it is this economic growth that generates revenue for governments to fund Canada's globally envied health care, education, and social safety nets. Hence, our quality of life in this country.

In short, investment in infrastructure is Canada's economic health-care program.

In a set of cross-Canada roundtable meetings held this summer, the federal government explored how best to implement a Long Term Infrastructure Program (LTIP) that extends beyond the expiry of the Building Canada Plan in 2014.

It appears the Harper government's LTIP focus will be on investments in infrastructure that support long-term economic growth and prosperity.

An Informetrica report on infrastructure and its impacts on productivity found that for every $10 billion invested in local infrastructure, 115,000 new jobs are created and nominal GDP grows by 1.3 per cent. The study also found investments funded from growth taxes -- specifically sales and income taxes -- deliver a bigger boost to a slowing national economy than investments funded from municipal property taxes. And for $1 invested in municipal infrastructure, roughly 35¢ is returned to the provincial and federal governments in direct financial benefits, mainly through increased sales and income tax revenue.

A 2010 Residential and Civil Construction Alliance of Ontario report underscored the economic importance of infrastructure by concluding that continued under-investment in infrastructure over the next 50 years will slow economic growth, reduce business profitability by up to 20 per cent.

Congestion on Canada's transportation system -- railways, U.S. border crossings, airports, marine facilities and roadways -- has severe consequences on our nation's trade-dependent economy and our jobs. These assets must meet the current and future needs of the economy for Canada to remain internationally competitive.

Most of the core public infrastructure upon which Canadians depend upon, says Statistics Canada, was built in the 1950s and is rapidly approaching the end of its useful service life. Much of it will need to be rehabilitated or replaced within the next 10 to 15 years.

The Federation of Canadian Municipalities (FCM) found municipal infrastructure ranks between fair and very poor. Replacing key assets such as drinking-water systems, wastewater and storm-water networks, and municipal roads will cost $171.8 billion, nationally.

Canada's population has increased to approximately 34 million from 16 million, and more than 80 per cent of the population live in urban communities.

Not only is our infrastructure old, but in many cases, daily demands on it far exceed its intended design capacity.

The tragedy that occurred in Quebec with the bridge collapse, or the bridge closure on the Trans-Canada Highway east of Portage la Prairie will become all too common without a concerted effort on the part of Canadian governments at all levels to accelerate the pace of infrastructure re-investment.

The investments of the past three years -- as large as they have been -- have merely dented our national infrastructure deficit.

How Canada renews and invests in its aging infrastructure over the next 10 years will determine our nation's economic, fiscal and social health. Delaying today will place an impossible financial burden on future generations, and will without question lower our standard of living.

Canada stands on a precipice. While the need to return to fiscal balance is important, it must be implemented in such a way as not to neglect important investments in our economic health.

Chris Lorenc is the president of the Manitoba Heavy Construction Association.

Republished from the Winnipeg Free Press print edition October 5, 2012 A14

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