Public Infrastructure to Power Canadian Growth in the 21st Century
Development and Innovation With an economy stuck in slow-growth mode and governments everywhere looking for ways to increase growth, productivity, and incomes, there are concrete and proven ways in which active public policy engagement can produce the economic outcomes we need as a nation.
Past initiatives inadequate
It is widely known that investments in Canada’s long-term economic infrastructure are among the best, most growth-enhancing public goods that governments can provide. Canada has always been a trade-dependent nation but often insufficient infrastructure investment by past governments at all levels has contributed to a massive shortfall between our economy’s needs and the reality on the ground.
The previous federal government invested heavily in short-term infrastructure projects in order to help Canada emerge from the recession of 2008 and 2009 in a relatively strong position. Partially as a result, Canada’s recession was much less deep and protracted than those suffered by other countries. The previous government also renewed the flagship federal Building Canada Fund, providing predictable and long-term infrastructure funding across the country for the next decade. Both of these initiatives have helped a great deal, but there is much more we can and should be doing to build world-class public infrastructure in Canada.
"Though the commitment to new money is hugely welcomed, any new federal infrastructure plan must be designed in a way that is smart and forward-looking."
Weak growth due to barriers to trade
Since we emerged from the recession in the immediate post-2009 years in a relatively strong position, growth has been persistently and stubbornly sluggish. Of course much of this has to do with weak commodity prices in recent years over which we have no control. But much of it has to do with the difficulty that Canadian producers and exporters experience in getting their goods to market. Roads are clogged; the border is jammed; vital transport links in many parts of the country have been left to atrophy for want of sufficient investment and maintenance.
Learn from the past
The new federal government has come to power at a vital time for Canada, and with an agenda that includes large-scale public infrastructure potentially unlike anything we have seen in Canada. Though the commitment to new money is hugely welcomed, any new federal infrastructure plan must be designed in a way that is smart and forward-looking. It must learn from the mistakes and lessons of previous programs, and it must be flexible to the demands of an ever-changing economy and policy landscape. Though the financial sums promised are massive, the need is always greater than any government’s capacity to pay, and so projects must be selected for funding in a transparent manner that clearly sets out the business case for the investment and that funds it in a fair and predictable manner — taking into account design, construction, and life-cycle maintenance costs.
This opportunity is not to be wasted. It is time to invest in public infrastructure that will power Canadian growth in the 21st century.