The importance of infrastructure


Cities need ongoing help maintaining basic services

By Alex Binkley
True North Perspective
The federal and provincial governments face a lot of pressure to cut spending and get their financial houses in order.

That could be bad news for municipal governments that have a whopping backlog of sewers, roads and other essential infrastructure to improve and replace. In 2007, a McGillUniversitystudy estimated there was $123 billion backlog in municipal infrastructure upgrading and another $153 billion needed in new facilities.

In 2005, the former Martin government allocated 2% of the revenue from federal gas tax for municipal infrastructure. The Harper government made municipal projects eligible for Building, Green infrastructure and Economic Action Plan spending and a start was made on the backlog.

Now the Federation of Canadian Municipalities is looking to the March 22 budget for a long term federal infrastructure commitment, says President Hans Cunningham.

“We’re looking forward to see a commitment (in the budget) to work with FCMon infrastructure upgrades,” he adds. “What we really need is a long term plan with the federal and provincial governments to improve our infrastructure.”

“We got to move away from thinking about next year to thinking 20 to 30 years in the future to make sure this happens,” he explains.

Transport Minister Chuck Strahl, who is responsible for infrastructure programs, told the Commons Transport Committee Feb. 10 that the gas tax money will keep flowing “so that communities can continue to reply on stable finding for their important infrastructure programs.” He said the government has extended the deadline for projects under the various infrastructure programs to March 2012 so they can all be completed.

To create an accurate accounting of the state of municipal infrastructure, FCMhas struck a partnership with the Canadian Construction Association (CCA), the Canadian Public Works Association and the Canadian Society of Civil Engineers to develop a national report card on municipal infrastructure.

Bill Ferreira, the CCA’s director of government relations and public affairs, tells Ipolitics the report card will be based on information supplied by local governments. It will likely be released by the summer. “It will try to capture the investments of the last few years.”

The report card would also like to track the state of provincial infrastructure such as highways, he adds. While federal officials quarreled with the McGill backlog estimate when it was first released, Ferreira says it remains “the only effort to date to quantify the size of the problem.”

The size of backlog should be no surprise, he continues. “Most of the municipal infrastructure was built in the 1950s and ‘60s and is aging. But if we don’t determine the scope of the problem, how can we develop a credible program to fix it. We have to be able to demonstrate the scope of the problem to the politicians.”

Pedro Anthunes, who tracks infrastructure issues for the Conference Board of Canada, says that federal and provincial governments have more than doubled support for municipal projects since 2002 and that has certainly reduced the backlog.

Studies by the Conference Board have documented that cities with good transit and other basic services are important drivers of the national economy. “There’s a strong link between the state of municipal infrastructure and efficiency and productivity of the economy,” Anthunes tells Ipolitics. “It makes cities attractive to people.”

However, with governments entering a period of fiscal restraint, municipalities will see the level of support reduced although not completely eliminated. “The public wants to see the government balance its budget,” he says.

However, no one wants the tap turned off completely because infrastructure improvement “creates construction employment and that means long term benefits as well as encouraging complimentary private sector investment.”

Cunningham said municipalities need the assistance of the federal and provincial governments because local property taxes can’t pay for all the upgrades. He would also like to see any federal or provincial regulations, such as waste water treatment rules, include a provision for financing new treatment systems. He noted that a National Infrastructure Summit held in Reginain January highlighted the need for the three levels of government “to work together on making improvements happen. We need new accounting rules that will properly depreciate the value of our assets to make us more aware of what needs replacing.”

Research by federal agencies, TD Economics and the Conference Board have shown that the poor state of municipal infrastructure is a drag on Canada’s economy. Traffic congestion on crowed city roads costs business about $5 billion a year in delays.

Cunningham notes the average commute to work in New Yorkor Los Angeles is faster than in large Canadian cities.

Add new comment