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Winnipeg Free Press - PRINT EDITION

Study calls for $300-billion federal infrastructure investment

By: Staff Writer

Posted: 01/25/2013 1:00 AM | Comments: 0

OTTAWA -- A new study suggests as much as an additional $30 billion a year for 10 years would be needed to return infrastructure spending in Canada to historic levels.

The study, from the left-leaning Canadian Centre for Policy Alternatives, says underinvestment in infrastructure is a chronic problem in Canada.

The centre says investment peaked at just over three per cent of gross domestic product in the late 1950s and then steadily declined until the mid-2000s.

It notes the federal-provincial economic stimulus program temporarily reversed the trend, but says up to $300 billion over 10 years is needed on top of current spending to return funding to levels not seen since the 1950s.

The study also suggests the federal government has shifted responsibility for infrastructure investment to municipalities over the past several decades.

It says the federal government accounted for 34 per cent of capital investment in 1955, but that figure had declined to 13 per cent by 2003.

"The shift in responsibility for public capital investment from senior governments to local governments has not been matched by corresponding increases in transfer payments," said CCPA economist and research associate Hugh Mackenzie.

"The cumulative effect of this underinvestment means we are missing $145 billion worth of infrastructure."

The study's recommendations include a call to resist the "tendency to use infrastructure funding as a political pork barrel or to use that funding as a lever for ideological agendas such as public-private partnerships."

-- The Canadian Press

Republished from the Winnipeg Free Press print edition January 25, 2013 B16

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