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Catching the stimulus program wave


February 22, 2010
By Andy Bateman

February 23, 2010 – According to a Toronto
Sun report yesterday, “the federal government says it has finished deciding who
gets what under key parts of its massive stimulus program in a tidal wave of
approvals that should propel a spring job surge.

Officials say more than 6,000 infrastructure projects have been approved
since the program started a year ago and $9.4 billion has been committed to
stimulus spending. That jumps to $27 billion including funding from other levels
of government.

The rush of approvals means there will likely be a huge crush of work
kicking into high gear this spring and summer, even as the economic recovery
takes hold.

“I think 2010 will be a record year for public infrastructure,”
Infrastructure Minister John Baird in an interview, pointing specifically to
public transit, roads, bridges and water treatment.

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But whether or not contractors can effectively handle the flood of work
remains a question.

“Will we get value, or will we get a big mess?” asked Liberal critic
Gerard Kennedy.

He argued that Baird needlessly politicized the handing out of
infrastructure money to such an extent that it slowed the flow of stimulus at a
time when the economy needed it most. Now, municipalities are left scrambling
to spend it all at once, before the flow of federal cash comes to a sudden halt
a year from now.

“The jury is out on whether any of these things worked,” Kennedy said.

Ottawa had set a deadline for the end of last month for provinces and municipalities
to get their paperwork in order, and to apply for an array of federal programs
meant to help the economy recover from recession.

Despite some complaining that there wasn’t enough time, city and
provincial governments were able to meet the deadline, senior government
officials said. Even the Quebec
and B.C. governments were able to overcome some stumbling blocks and line up
matching funding for many of the federal programs, officials said

“We expect 2010 to be one of the busiest construction seasons on record
for municipal infrastructure projects. But the tap won’t be turned on all at
once,” said Berry Vrbanovic, a city councillor in Kitchener, Ont., and a
vice-president of the Federation of Canadian Municipalities.

Since the winter was mild this year, cities have been able to get a
head-start on preparation for the busy spring building season, he explained.

In Ottawa’s
eyes, the stimulus spending was so efficient and successful that the program
should provide a model of sorts for government support in the future.

The model puts the federal government in charge of asking for proposals
from municipalities and provinces, setting broad parameters and making the
final decision on where the money should go. But the application process is
short and sweet. And the actual work and monitoring of standards is done by
other levels of government.

“We stopped micro-managing the provinces and the municipalities,” Baird
said.

In the past, it has taken months or years for Ottawa to come up with programs that the provinces
and municipalities could agree to ­­­­— leaving projects languishing under
construction for long periods of time. Baird pointed to work on the Ottawa
Convention Centre, which was announced in 2002, but work is just going ahead
now.

With the one-page application for municipalities, the end of overlapping
environmental assessments, and good co-operation among the various governments,
Ottawa has been
able to approve and spend infrastructure at record speed, Baird said.

He said he plans to meet with the Federation of Canadian Municipalities
in the coming weeks to figure out how best to apply the stimulus model on an
ongoing basis.

But Baird’s approach to stimulus spending is far from universally
accepted. The parliamentary budget officer has bemoaned the lack of information
on job creation and the lack of economic strategy in disbursing the money.
Observers, including opposition critics, have frequently complained about the
lack of transparency in the process.

Investigations by The Canadian Press and other media have found that the
funding has favoured Conservative ridings, at the expense of areas with high
unemployment.

And some city mayors are worried that when the federal government cuts
off its funding in March 2011, they’ll be left paying huge amounts for
construction that has inadvertently fallen behind schedule.

The construction sector was hit hard by the recession. At the peak of
the recession in July 2009, 124,600 construction jobs had been wiped out.

The sector has slowly started to rebound. Since last July, the sector
has added 56,300 jobs, mainly in Ontario.
But in B.C., where the construction losses were acute, construction employment
has barely shown any improvements.”


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