VIEWPOINT: Re-investment in our transportation infrastructure must become our rallying cry

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DON MILLS, Ont. — I’ve got one wish for the industry this year. One would think I would have more – there’s so many challenges we’ve got to contend with – but one issue has reached a point that continuing to ignore it is sure to cause irreparable harm to both trucking and the Canadian economy.

The issue I speak of is the crying need to improve our transportation infrastructure. Simply put, it’s not good enough for secure and efficient transportation. My wish for 2005 is that all government levels stop placing this issue on the backburner and start giving it the attention it deserves.

A quarter century of under-investment at all levels of government has crippled our roadways, bridges, ports and other key parts of our infrastructure. There has been renewed government spending the last few years, but according to an eye-opening report from the TD Financial Group, momentum to address the problem is already losing steam.

The report places the investment gap – the accumulated annual deficit between the amount needed to properly maintain or replace existing infrastructure as well as support growth, and the money actually spent – at somewhere between $50 billion and $125 billion. While not spending that money did help in reducing the nation’s debt load (for example, if an additional $100 billion was spent on infrastructure at a financing cost of 6%, it would have yielded about $6-$9 billion in higher annual debt-service payments) there is a cost to allowing our infrastructure to deteriorate.

The report, authored by respected economists Derek Burleton and Beata Caranci, concluded that a one-dollar increase in the net public capital stock creates about 17 cents in average private sector cost savings. So if we assume the infrastructure investment gap to be $100 billion, the private sector is out $17 billion in savings. The Greater Toronto area alone, the report states, suffers an annual estimated loss of about $2 billion from congestion and delays in shipment of goods.

The report also warns that with the state of a region’s infrastructure weighing more heavily on the location decisions taken by highly mobile businesses, a deteriorating capital stock will increasingly cut into gains in productivity. That point is made even sharper when you consider how delays at the border since 9/11 exacerbate the problem.

The report from the TD Financial Group is not the first report to sound the alarm. Reports issued by groups ranging from the Federation of Canadian Municipalities, the Canada West Foundation and McGill University have reached similar conclusions.

Infrastructure may not have the wide voter appeal that health care spending does but it must not be allowed to continually lose out to other areas for government funding. Those with a vested interest in a secure and efficient transportation infrastructure must look beyond government for leadership. It’s clear our political leaders just don’t get it. Considering how low interest rates have been in recent years, they have already missed out on a golden opportunity to invest in our infrastructure. In fact, our politicians and bureaucrats have their heads so deep in the sand they dared come to two major gatherings of transportation stakeholders – the Intermodal 2004 conference, which I chaired in the early fall, and the recent IE Canada conference – and claim that, according to their survey, most shippers are happy with Canada’s transportation system.

For the record, no they are not.

What we desperately need is a national transportation plan outlining a vision for the future and a strategy for achieving it, something that includes more imagination and generates greater confidence than the last “vision” plan created by former transport minister David Collenette. The creation of this plan must bring all transportation stakeholders – shippers, carriers and intermediaries – together. (To stress the need for an industry-wide solution, this editorial is running in all Transportation Media publications, reaching about 150,000 buyers and providers of transportation services across Canada.) The plan must also bring an end to the current system of trying to solve intermodal problems with single mode solutions. And, most importantly, it must at last put transportation at the top of the government agenda.

I have no confidence our governments can do this on their own. This must become our rallying cry.

“An ongoing neglect of the nation’s public capital represents one of the greatest risks to the country’s overall quality of life.”

Derek Burleton and Jan Caranci
TD Financial Group

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