Now’s the time to invest in infrastructure


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In the public discourse during the COVID-19 pandemic about essential workers, it’s likely few Canadians gave much thought to the men and women who work on our roads and repair our sewer and water lines. Nevertheless, heavy-construction labourers were out there.

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Hey there, time traveller!
This article was published 02/05/2020 (827 days ago), so information in it may no longer be current.

In the public discourse during the COVID-19 pandemic about essential workers, it’s likely few Canadians gave much thought to the men and women who work on our roads and repair our sewer and water lines. Nevertheless, heavy-construction labourers were out there.

Noting this fact is in no way intended to diminish the spotlight on our front-line emergency and health-services workforces across Canada, who have risked their health to help those who fell ill. Rather, I raise it to encourage discussion on an equally important recovery: COVID-19 has our economy on its knees.

The provincial government is forced to add $5 billion to its debt load, due to lost revenue and additional expense in fighting the pandemic; the city’s conservative estimate is $12 million per month in lost revenue. We don’t yet know the financial hit on the federal government, but weeks ago, some were estimating a cost of $250 billion.

Wayne Glowacki / Winnipeg Free Press Files Investment in infrastructure projects by cities and provinces is a proven antidote to an economic downturn.

The pummelling of public treasuries is just one front in this economic maelstrom. The business shutdown has thrown millions across Canada out of work and shuttered storefronts. Some 7.2 million people have received the Canada Emergency Response Benefit. The economic forecasts all see negative growth nationally, provincially and municipally.

A palpable crisis in confidence has gripped business owners (those who still hope to see their doors reopen) and the private-sector investment community. We need to stop wondering when we’ll hit bottom, and start looking to turn the corner. We need an economic revival.

Where does hope lie?

Governments at all levels defended their capital-investment budgets and the tender schedules during the pandemic shutdown. Infrastructure works are critical services, and infrastructure investment acts as an economic stabilizer. Good, reliable infrastructure keeps people working and supplies moving, and it gets people to jobs and products to stores. It puts money in pockets and circulates wealth quickly.

Moreover, capital investment in infrastructure is verified as an economic force. All estimates, which vary depending on what kind of infrastructure is in the mix, show infrastructure investment holds among the largest returns to the GDP, immediately and multi-year.

Now is the time to ramp up infrastructure investment. The Manitoba Heavy Construction Association has joined five other business groups, representing the broad engineering and construction industry, in calling on all levels of government to seize the perfect conditions before us now to glean some benefit from the economic crisis.

Extraordinarily low interest rates combined with a very competitive market — producing tight, low bids on tenders — have delivered to public-project owners the perfect storm, blowing in their favour. More projects can be rolled out for the value of the program budget.

But to get optimum benefit, especially given the low interest rates, governments should over-commit their budgets. We have urged them to double their infrastructure investment programs, as Alberta did, to stimulate economic activity and put people back to work, earning and spending money, supporting local businesses.

Building during a time of low interest rates allows governments to manage the cost of borrowing with sustainable debt servicing, while getting the knock-on returns of the assets built or improved. Transportation infrastructure boosts trade productivity and profile.

Consider for a moment what completing the Chief Peguis Trail could do for Winnipeg, the capital region and the province.

This $600-million project:

❚ connects to CentrePort Canada, the country’s largest inland trade port

❚ opens development in the city’s northwest and the capital region, where 70 per cent of Manitoba’s GDP is derived

❚ bolsters the importance of the Headingley and St. Norbert bypasses, and the widening of Route 90.

As a trade enabler, it would be hard to find another capital project to match its economic punch. And right now, Ottawa’s stimulus planning is set to call for shovel-ready and major capital projects, across Canada, to kick-start the economy.

Our provincial, municipal and federal governments need to step up, draw up a list of projects and fully take up Manitoba’s allocation of the Investing in Canada Infrastructure Program. Quebec and Ontario have their lists ready.

We know of no economic recovery strategy that supports status-quo capital investment measures in times of depressed economies. We need our governments to commit to bold stimulus capital programs, procuring jobs and building legacy assets.

We strongly urge all levels of government to significantly enhance infrastructure investment, which has proven itself repeatedly as an antidote to economic collapse.

Canada cannot nervously await a rescue plan, but rather must grab the potential residing within crisis. Canada must invest in itself, its infrastructure and our future.

Chris Lorenc is president of the Manitoba Heavy Construction Association and the Western Canada Roadbuilders and Heavy Construction Association.

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