James Brox | April 10th, 2012
Canada is built on infrastructure, in more ways than one. The Canadian Pacific Railway, the Trans-Canada Pipeline, the Trans-Canada Highway, the St. Lawrence Seaway, Expo 67, the Montreal and Calgary Olympic facilities, and more recently the Confederation Bridge linking Prince Edward Island to the rest of Canada–to name a few examples. Without a doubt, many of these were projects in nation-building.
The collapse of the Ville Marie Tunnel last summer in Montreal was a strong reminder of the importance of well-maintained roads, bridges, and tunnels. One thing is certain: The need for new infrastructure is here. A 2008 study by Statistics Canada estimates that bridges, which have an average life span of 43.4 years, have passed 57 per cent of their useful life–72 per cent in Quebec. Roads have passed 53 per cent of their useful life, and water treatment plants have passed 63 per cent of their expected life.
As we know, sometimes aging infrastructure can be tragic. Five people died in September 2006 when the de la Concorde Blvd. overpass in Laval collapsed. Seven people died in Walkerton in 2000 after the town’s drinking water became contaminated.
Increasingly, in Canada, the jurisdictional responsibility for funding much of public infrastructure has been shifted to the local or municipal level. The federal share of public infrastructure has declined from 26.9 per cent in 1955 to only 5.3 per cent in 2007, while that of the municipal or local level of government has doubled. The provincial share has been more or less constant.
A strong argument can be made that it is efficient to have public infrastructure under the jurisdiction of local authorities. However, since local revenue sources have not kept pace with the expenditure requirements, the result has been a tendency to allow infrastructure to deteriorate. Montreal is a case in point.
In response to the recession, government stimulus spending policies did target infrastructure investment. In 2010, total investment in public infrastructure increased by 19.3 per cent. However, preliminary estimates for 2011 indicate a decrease of 7.2 per cent in planned federal spending and a decrease of 0.2 per cent in municipal expenditures, with only the provinces planning to increase by 2.5 per cent.
While this recent activity is a good first step, the problem is by no means over.
Private manufacturers use more labour and less private capital when public infrastructure is increased. A 10 per cent increase in public infrastructure investment would lead to a five per cent reduction in the cost of private manufacturing output.
We will not continue to be competitive if our viaducts, tunnels, and bridges are in danger of collapse and our water systems in danger of contamination. If we do not start shoring up our infrastructure now, the cost in the future might be more than we can bear.
This is a national undertaking and cannot be left to any one jurisdiction. Canadian competitiveness–and our status as a developed country–depends on modern, efficient, wellmaintained public infrastructure.
James Brox is professor emeritus of economics at the University of Waterloo and the author of Infrastructure Investment: The Foundation of Canadian Competitiveness, published by the Institute for Research on Public Policy.