One More Load: Delayed dollars for infrastructure
By Chris Lorenc
Trudeau government muddles infrastructure strategy, investment.
By Chris Lorenc
March 28, 2018 – Report after report, the evidence of a return on investment from publicly funded programs has shown putting our money on infrastructure projects holds the greatest boost to GDP.
Consequently, from the Chretien government on, federal administrations have heeded the wisdom and made nation-building, trade-enabling infrastructure programs a centerpiece of election platforms and annual budgets.
So, what is going on in Ottawa these days? What is the Trudeau government thinking?
Justin Trudeau’s Liberals rode into power assuring the country it had our best economic interests in mind, and would not falter on the need to boost Canada’s trade potential — through strategic infrastructure investments. In the first budget delivered by Finance Minister Bill Morneau, the Liberals boasted of the $180 billion — a combination of existing and new infrastructure investment dollars — to roll out over the next years. But last Tuesday, in his third budget, Morneau rewrote the investment script. Billions of those infrastructure-investment dollars, from legacy and newer programs, will be held up for distribution until after the 2019 federal election.
More than $3.8 billion of the plan’s first phase, supposed to be invested by the end of this month, will not flow until at least 2021 and another $3 billion of the next phase will have to wait until at least 2025, and the majority of it in 2028, Canadian Press reported.
Further, details within the budget papers show that the roll-out of dollars from the ‘legacy’ infrastructure investment funds will also be slowed. Forecasts to 2019-20 show a $2.8-billion lag in spending, compared to original plans of $13.3 billion. That’s beyond discouraging: it puts Canada’s actual economic growth at real risk. How did we get here? Trudeau had repeatedly assured Canadians that his administration would improve upon the Harper government’s record, by focusing on accelerated and purpose-driven investment in Canada’s critical trade enabling and core infrastructure.
But the reality is that the federal Liberals, immediately upon taking office, twisted the term ‘infrastructure’ to encompass a shopping list of items far beyond what Canadians understood infrastructure to be (streets, highways, water and sewer, trade corridors and inland and marine ports). In 2017, it came to include social programs (day care centres) and green innovation (renewable energy technology).
And last week, Morneau did not utter the word ‘infrastructure’ once in his budget speech. Nor, to our knowledge, was infrastructure identified in any strategic nation-building way. This is troubling, to say the least. Canada is muddling badly on strategic investment in trade-enabling infrastructure, a fundamental element to any plan to boost trade, internally or globally and by extension growth in the economy.
The federal government, in this latest budget, explains the “reprofiling’ of the expenditure forecasts for its broader infrastructure programs is due to slower take-up at the provincial and municipal levels. But it can’t escape the findings of the Senate, which reported last year that Ottawa’s infrastructure programs are dispersed across multiple departments and offices, working without coordination or a collective strategy. It is this lack of coordination among them that creates confusion and protracted delays.
Delaying the flow of federal dollars has a ripple effect on provincial and municipal infrastructure budgets and their ability to plan their own critical investments for maintaining, repairing or constructing new core infrastructure assets.
Further, shifting the priority from trade-enabling infrastructure, as has happened, defies and negates the acknowledged potential for economic growth and impacts jobs across the economy. Canada’s economy relies on trade. Our highways, corridors, inland and marine ports move people to jobs and products to market: they are indispensable to our economic health. Canada’s export capacity materially affects our ability to sustainably fund our social programs, which are envied the world over.
Governments have multiple priorities and face competing demands — that’s understandable. But if we squander our potential for economic growth, the capacity to meet demands or even make a list diminishes markedly. The Trudeau government must put trade-enabling and core infrastructure programs back at the top of its agenda. Get the dollars now holed up in federal programs out to the provinces, cities and towns so Canadians see a defined and maximum return to their regional and national economies.