Tories’ budget trail littered with broken infrastructure promises
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Hey there, time traveller!
This article was published 13/04/2022 (349 days ago), so information in it may no longer be current.
It almost always garners a good headline: the provincial government plans to spend some gargantuan sum of money on infrastructure over a multiple number of years. It’s usually an “historic” amount that targets roads, highways, hospitals, schools and flood protection. Yet, every year, at least over the past five years, government comes nowhere near spending the amount advertised.
In Tuesday’s provincial budget, the Stefanson government announced that “for the first time in our province’s history” government planned to lay out a multi-year infrastructure plan and spend an “historic” $2.4 billion over three years.
That’s inaccurate. It’s not the first time the province has announced a multi-year infrastructure program. The former NDP government announced a five-year, $5.5 billion infrastructure plan in its 2014-15 budget, including more than $700 million a year for roads, highways and bridges. They weren’t around long enough to see it through after losing the 2016 election.
Most multi-year funding announcements by governments are meaningless anyway; the legislative assembly votes on budgetary items one fiscal year at a time. Even the infrastructure spending they do approve often falls short of projections.
Most multi-year funding announcements by governments are meaningless anyway; the legislative assembly votes on budgetary items one fiscal year at a time.
The Progressive Conservative government has massively underspent its infrastructure budget every year over the past five years. In 2017-18, it came in $487 million below budget; the next year it was $566 million shy of spending projections. In 2019-20, the Tories underspent infrastructure by $404 million.
In 2020-21, infrastructure spending came in $525 million below the $2.18-billion budget.
The COVID-19 pandemic was responsible for some of that, including health-care facility projects that were delayed owing to public-health concerns. There have been other legitimate reasons why projects have not moved ahead in the scheduled year. Delays in obtaining federal approval for the Lake St. Martin outlet channel, for example, meant some planned infrastructure spending was moved to a later year.
Still, it’s government’s responsibility to select projects that have a reasonable expectation of meeting their projected start dates. Every time a project lapses to a future year, it means funds are not available for other projects that were, or could have been, shovel-ready. There is no shortage of critical infrastructure in the province in need of funding. It’s up to government to properly manage funding schedules and allocate infrastructure dollars based on the readiness of projects. There will always be some delays, including those related to weather when it comes to highway infrastructure. However, the extent to which projects have been deferred under the Tories in recent years is well beyond normal variances. It appears some projects were postponed for austerity reasons.
Delaying infrastructure projects may improve the province’s bottom line in the short term. However, doing so usually comes with long-term financial and economic costs. The longer governments wait to replace or upgrade aging infrastructure, the more expensive that work becomes down the road. Failure to maintain proper transportation infrastructure also negatively affects trade and undermines the province’s competitive position. There’s a steep cost to letting infrastructure crumble.
Delaying infrastructure projects may improve the province’s bottom line in the short term. However, doing so usually comes with long-term financial and economic costs.
So, when the province announces a new $2.4 billion strategic infrastructure spending plan over three years as it did this week, it has to be taken with a grain of salt. The plan includes a minimum of $500 million per year on highway funding. That’s good news if the money gets spent and projects move ahead. It’s a minimum level of funding the heavy-construction industry has long called for.
The province has the fiscal room to increase capital spending, which is funded through borrowing and amortized over time. The province’s debt-to-GDP ratio — a key metric bond-rating agencies consider when determining government’s credit rating — has been declining since last year. It came in well short of the projected 39.9 per cent for 2021-22 and is expected to fall to 35.9 per cent this year. Part of the reason it declined as much as it did is because the province has been underspending its infrastructure budget.
Manitoba can’t afford to keep doing that.
Tom has been covering Manitoba politics since the early 1990s and joined the Winnipeg Free Press news team in 2019.
Updated on Wednesday, April 13, 2022 10:31 PM CDT: Fixes typo.