Tracking infrastructure spending tricky

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This article was published 13/03/2019 (2431 days ago), so information in it may no longer be current.

OTTAWA — The federal government has no way of knowing how much of its $188-billion infrastructure fund is replacing cash that provinces would have otherwise spent, a watchdog says.

The parliamentary budget officer released a report Wednesday that suggests Ottawa’s pledge for evidence-based governance should include incremental reporting on how its massive infrastructure investments are rolling out, including how much construction is underway.

The federal Liberals and the Pallister government are embroiled in a spat over untapped funding.

“The federal government did not measure what provinces and cities were planning to spend on infrastructure before committing $188 billion for infrastructure projects in 2016,” budget officer Yves Giroux wrote.

“Without that crucial information, the federal government won’t be able to assess whether its money has actually led to higher investment. Our analysis suggests the provincial governments are using a portion of the federal infrastructure money to spend on other programs.”

Ottawa tracks how much funding provinces and cities have signed on for, how much those jurisdictions are matching, and the sum of claims each has submitted. The information is available online. But Infrastructure Canada cannot tell whether provinces are taking federal money and diverting it elsewhere, by decreasing their own planned infrastructure investments.

Since the Trudeau government’s first budget, MPs have been asking the watchdog whether federal infrastructure allocations are rolling out as intended, and if the federal cash is replacing provincial money that would have been spent. Giroux reported Wednesday that he can only guess.

The office of federal Infrastructure Minister François-Philippe Champagne noted that it assesses outcomes such as fiscal growth, housing conditions, accessibility and sustainability

“Our long-term infrastructure plan is working and providing the support for Canadian communities that they have long sought,” spokesman Brook Simpson wrote. The minister was not available for an interview.

Simpson noted that the Liberals have approved more than 4,700 projects, with $19 billion of federal cash being spent, of the $188 billion pledged from 2016 to 2028.

But Giroux argues the lack of incremental reporting makes it hard to test the Liberals’ claims about job creation and economic growth.

The federal government only dispenses cash when provinces submit claims for reimbursement, which is normally toward the end of construction projects. The Liberals reject claims their infrastructure money is rolling out slowly, noting that projects are underway and that they expect provinces to submit claims for them.

But Giroux suggests provinces aren’t spending that much money — he estimates that “provincial capital spending was $5.4 billion lower in 2016-17 and 2017-18 than what it should have been.” That would suggest provinces don’t have many projects underway to bill Ottawa for, after all.

Giroux cautioned that other factors could be at play.

In Manitoba’s case, infrastructure spending was $995 million lower in that time period than what the province had been on track to spend. The time frame overlaps with the Progressive Conservatives coming to power and axing programs the NDP had approved.

For three weeks, the Liberals have said $1.9 billion in federal funds, which was pledged for Manitoba in various programs over the next decade, has gone unclaimed; about half of that is for infrastructure projects.

Giroux’s report did note that some cities are boosting their infrastructure spending, thanks to Ottawa putting up cash that is then matched by municipalities and provinces. Champagne’s office suggested cities could later bill provinces, who would then seek federal reimbursement.

The report looked at larger cities that could provide detailed information; Winnipeg was not one of them.

dylan.robertson@freepress.mb.ca

Federal budget watchdog's report on infrastructure spending