Is Canada finally ready to invest in its infrastructure?
March 7, 2007
March 7, 2007
I’ve been hearing a lot of talk lately from both top ranking transportation ministry bureaucrats and their political bosses that they’re finally ready to start spending the money necessary to give Canada the infrastructure we need for the efficient movement of goods.
That was certainly the main message from the high-level bureaucrats included in a transportation policy session at the Transpo 2007 conference I attended in Toronto. To quote David O’Toole, assistant deputy minister for Ontario’s ministry of transport, both political will and understanding are currently aligning in such a way that there are opportunities to make improvements to our transportation infrastructure “that haven’t been available in maybe 40 years.”
Is this just more talk or real reason to get excited?
Certainly some of the investments being made are worth noting. Manitoba, for example, recently announced an unprecedented investment of $4 billion and the province’s first-ever, multi-year plan to renew its highway system. With this commitment the province has increased investment in its roads and highways by 125% since 1999. In comparison, in the 10 years prior to 1999, investment in its roads and highways increased a little over 4%.
To prove the claim that his own province of Ontario also gets it, O’Toole pointed to the Move Ontario program which is providing $1.2 billion for public transit, municipal roads & bridges; the $1.8 billion to be spent on northern Ontario highways; the $3.4 billion to be spent on southern Ontario highways; and the $800 million being spent with the federal government and other stakeholders on improving border access.
Perhaps of equal import to the money that is starting to be spent, is the approach to transportation policy and infrastructure investment. Kristine Burr, assistant deputy minister, policy, for Transport Canada, explained that Ottawa is taking a “systems approach” which places emphasis on integration of a range of policy and regulatory issues, including taxation, governance, land use planning, and the skills/labour market. One of the better offshoots of this approach is the gateway strategy and last October Ottawa announced $591 million would be pumped into the Asia-Pacific Gateway and Corridor Initiative. And, of course, yesterday the feds announced some very big bucks to help boost Toronto’s subway infrastructure, which will hopefully pull a good chunk of cars off the roads.
The bureaucrats are certainly talking the talk, and their bosses appear to be walking the walk with those investments.
But you’ll have to excuse me if I choose to remain cautious. First there’s the size of hole (pothole?) we’re in, thanks to years of neglect. Much of the nation’s infrastructure was put in place during the 50s, 60s and 70s with little done after that, despite considerable increases in the use of our roadways. Considering the useful life of many physical structures is about 50 years, a significant share of assets is already in need of replacement or quickly approaching that stage. A paper published by TD Economics a couple of years ago examining the infrastructure investment gap (the difference between what is needed to maintain the national infrastructure and what is actually being spent) was estimated at between $50 billion and $125 billion.
There’s also the problem of convincing cabinet to continue spending; that our transportation infrastructure should be a priority in the same way that healthcare and education are. That’s a tough nut to crack and may remain so.
Another significant obstacle towards infrastructure investment is the long-term nature of the process. It’s a lot of money that needs to be spent and the benefits may not be realized for years – certainly not before the next election. That too is a tough nut to crack for a political system that too often falls prey to short-term thinking.
And, of course, there’s the challenge posed by the snail-like pace of the approvals process. The environmental assessment process can take up to a decade to complete, by which time the trade corridor the infrastructure investment was designed to augment may wither away as commercial interests, in frustration, seek alternative routings.
I want to believe but I need to see more evidence we’re on a new path.
With more than 25 years of experience reporting on transportation issues, Lou is one of the more recognizable personalities in the industry. An award-winning writer well known for his insightful writing and meticulous market analysis, he is a leading authority on industry trends and statistics. All posts by Lou Smyrlis