Posts Tagged ‘Gas tax’


Thursday, January 27th, 2011

By 2014, when the current suite of  infrastructure programs expires, the federal government will have been in the municipal infrastructure business for two decades, investing nearly $ 30 billion and leveraging billions more from provincial and municipal governments.  

Yet this week at a national infrastructure conference in Regina, mayors and councilors from across the country are debating the same question they were 20 years ago: how to get rid of the infrastructure deficit.

This should not come as a surprise given that in the early1980s, at the start of the cities’ campaign to get federal support in erasing the municipal infrastructure deficit, the gap stood at about $ 12 billion and that by 2007 studies said it had broken through the $100 billion mark. 

One conference participant suggested we simply stop using the term and  start calling it an “infrastructure obligation” instead.  If the last 17 years are any indication, it could well be the only way the infrastructure deficit will disappear any time soon.

So how does one explain such figures in light of multi-billion dollar public investments? And what do these figures mean for the future of federal spending in this area?

Answering these questions is particularly relevant now that the federal government has turned its attention to the fiscal fallout from the recession.

In this period of virtuous frugality some in Ottawa might be tempted to simply walk away from programs and strategies that appear to have missed the mark.

That would be a mistake.

Most agree that, with the economy showing encouraging signs of recovery, it no longer is necessary—or even appropriate—to keep the federal stimulus taps open. But federal infrastructure programs over the last 17 years have been instrumental in helping Canada catch up to other industrialized countries in terms of public capital spending.

More practically, these programs have helped address some of the more pressing infrastructure needs in communities across the country. Everything from water treatment plants needing upgrades to crumbling and unsafe overpasses needing replacement have benefitted from federal programs.

Federal dollars were also critical in leveraging municipal and provincial funds that made important strategic investments, such as the RAV Line in Vancouver or the development of the Quartier international in Montreal possible.  

This federal spending “time out” presents an opportunity for cities, provinces and the federal government to take stock of the benefits and lessons from nearly 20 years of federal investments in municipal infrastructure.

It should be a time to assess what worked and what didn’t and to develop a plan to tackle the problem with an eye to fixing it once and for all, because that is what has been missing from the mix of infrastructure programs that have rolled out of Ottawa: an end game.

Programs have been developed with broad policy frameworks–such as investing in “green” infrastructure, but without a clearly defined sense of need or relative priority.

Mapping and understanding the nature and scope of the infrastructure problem must be the first step in developing solutions.  The second step must be a comprehensive assessment of federal infrastructure programs. This must be done collaboratively with all governments involved.

This is the kind of information that will explain why the infrastructure deficit has been compounding when it should have been shrinking.

It is also the kind information that will allow the three orders of government to develop the key elements of a national plan to eliminate the infrastructure deficit, such as:

  • planning for the total investment required and its timing;
  • tailoring the plan and priorities to fit unique regional needs, rather than relying on national, one-size-fits-all approaches;
  • exploring the impact of changing and extreme weather on infrastructure needs; and
  • developing innovative fiscal tools to support a long term approach by all governments.

As the federal government sets out to fix its fiscal deficit, it must not lose sight of the other deficit which, while off the books, has the potential to be just a debilitating socially and economically.

If Canada is to prosper, municipal infrastructure investments must support the economic potential locked within our cities and communities. For this to happen, programs and financing must reflect the long-term nature of infrastructure investments and encourage long-term thinking and planning.

Now is the time to recognize the immense benefits of recent infrastructure investments  and begin planning for a way to put our municipal infrastructure in the black.