Monday, November 09, 2015

Doing Infrastructure Right


Justin Trudeau has vowed to spend $51.1 billion on infrastructure over the next ten years. Allan Freeman writes that, before a penny is spent, some pretty serious strategic thinking needs to be done. Such thinking was not a hallmark of the last government:

Back in 2009, when the global financial crisis provoked a rapid drop in economic activity, infrastructure spending was a big component of the Conservative government’s Economic Action Plan. The theme at the time, repeated ad nauseam by Finance Minister Jim Flaherty, was “shovels in the ground.” The idea was to get work going as quickly as possible on infrastructure projects to provide much-needed economic stimulus. Projects, he kept on saying, were to be “timely, targeted and temporary.”

Another phrase Flaherty repeated a lot in 2009 was “use it or lose it.” Provinces and municipalities were warned that if they didn’t get the excavators digging and the concrete pouring by March 31, 2011, the promised cash would be clawed back by Ottawa. Of course, it didn’t quite work out that way.

What it boiled down to was pork:

The Harper Tories discovered that Keynesian economics and big deficits provided fabulous opportunities for local infrastructure projects — otherwise known as “pork”. In total, 7,000 provincial, territorial and municipal infrastructure projects were greenlighted under the Economic Action Plan, leading to the construction of hockey rinks, day-care centres and small-craft harbours. They were great projects for politicians looking to pose for local media at ribbon-cuttings — but they had little or no strategic impact on the economy.

Like everything the Harperites did, it added up to vote buying. What we need, writes Freeman is strategic investment in the economy:

If infrastructure investment is supposed to bring transformational change this time around, the new government should think long and hard about the impact of projects — and make choices. Instead of shelling out $20 million each on five regional centres to study climate change — a typical Canadian response that would respond to the requirements of politics — why not concentrate efforts on one national centre and spend the $100 million in one place, where it can have significant impact?

Let’s think strategically, even if that means concentrating funding on projects that necessarily will be geographically limited, like high-speed rail in the Toronto-Montreal corridor. Even if it means some ridings will get less cash, and backbenchers will enjoy fewer opportunities to hand over enormous novelty cheques.

The new government has to think beyond the next election.


Anonymous said...

All Canadians pay taxes and infrastructure spending should reflect that.

Hockey rinks and small craft harbours may seem like pork barrel spending to those who live near major urban centres where things like hockey rinks are often built with municipal funds. The situation is quite different in small isolated towns and villages that don't have the tax base to be able to build rinks close to where people live or maintain the harbours in their communities.

A new rink can make the difference between attracting young families to settle in a village and watching the few who remain move away.

Small craft harbours are important to professional fish harvesters, keeping their home ports close to their... homes and families.

Such considerations also need to be kept in mind when making infrastructure spending decisions.

Owen Gray said...

I agree, Anon. But, large or small, the projects should leverage economic growth.

The Mound of Sound said...

I find his proposal for one centralized centre to deal with climate change bordering on the ridiculous. Climate change is going to be a markedly different challenge from one region to the next, our coasts and our far north in particular. When we hear talk of centralized services we know that's code for central Canada and we also know that means we're thousands of miles and three time zones away and that often means out of sight/out of mind.

Climate change study and response has to be a shared, federal-provincial undertaking. Both levels have responsibilities, individual and overlapping. That certainly extends to most aspects of infrastructure.

This fellow Freeman, like many denizens of Ottawa, plainly has a feeble grasp of our country that's reflected in his flawed notions. I wouldn't pay his 'wisdom' much heed.

Owen Gray said...

I'm not sure that centralization is a cure of anything, Mound. Where we live, we're losing our hospital to centralization. But I do think we should think carefully about in what and where we invest before we begin digging holes.

Anonymous said...

At some point in the future, the public of Canada will come to understand that the Stephen Harper Economic Action Plan was a COMPLETE waste of money.

There are so many layers to this, I doubt we'll ever fully understand or appreciate the depths to which Stephen Harper used our own money to stay in power and reward those in the upper echelons of Canada and elsewhere.

Let's start with the basics: we need an audit of the spending. We need evidence that the tens of billions of dollars actually went to what Harper said it went to or that there was a long-term benefit (despit my comment above). If evidence doesn't materialize to the satisfaction of an independent auditor, criminal investigations MUST result.

Next, let's consider the beneficiaries and their payments back into the Conservative machine. This is a deeper issue that I don't think any government will be bold enough to tackle. But let's keep it on the table as a threat so that we at least get cooperation.

Finally, after we have a sense of how to do things better, let's do things better. Here are some basic ideas:
1. Help municipalities vs strangling them. The EAP 'strong armed' municipalities into cancelling essential services, social programs and other 'soft' economic activities in the interest of road, bridges and getting 'shovels in ground'. That strategy is a failure for so many reasons, the main ones being pushing municipalities further into debt when they can ill afford it and focusing on inefficient projects that had marginal benefits for the long run.
2. Invest well, build better. Municipalities need to have acccess to funding besides just property tax and the occasional user fee. My suggestion is that a part of the CPP be turned into a 'Super Fund' investment arm that will lend our retirement funds to qualifying projects, earning a preferred and reasonable rate of interest.
3. Decision process. The project process has to look at all of the projects available, the impact on a population basis and the long-term benefit based on a basket of priorities, including moving us in the future, urban in-fill, reduction of carbon footprint (so, no new roads), productivity gains and so on. Decisions should be part of a committee process that includes the Minister of Infrastructure (or whatever the new title is), Deputies from other ministries and the public, including experts and volunteers.

The biggest priority is to remember that this is OUR money and we all need to figure out how to spend it (assuming we need to) so that it maximizes all aspects of Canadian living and makes us the envy of the world.

Owen Gray said...

All of your suggestions are predicated on easy public access to information, Anon. Trudeau has promised open government. Let's hope he keeps his promise.

The Mound of Sound said...

I wasn't aware, Owen, that we would be proceeding with infrastructure without thoughtful analysis first, including collaboration between Ottawa and the provinces. This guy is doing the straw man thing and collecting a nice cheque from iPolitics for his labours.

Owen Gray said...

As a former civil servant, perhaps he's doing what lots of civil servants are doing these days, Mound -- venting.

Raven Corvoid said...

Actually in fact Harper's "ECONOMIC ACTION PLAN" was a lie foisted upon us as a way to advertise and an aggrandizement of himself and hypnotize idiots I live rural and there was dozens no I should say thousands of those stupid signs printed by the PMO that led to nowhere dead end roads in BC how stupid where these kids no children I should say he surrounded himself with? I'm pushing 70 :>

What what what they thought we would not catch on? Fools nest they were {IN HARPER's CASTLE] I can say that now they were ;> but no longer in power I have as a country boy a lesson to teach them I'll hang em by and their own "ECONOMIC ACTION PLAN" sign's boy will they ever look stupid stupid is as stupid does and they were the dumbest Canadians [I am ashamed to even admit they city boys empowered by Harper brats were Canadian] I am glad they are turfed and they are not welcome in my neighborhood we will string em up on their own 'Action Plan' signs :> They had better beware they are not welcome in my part of CANADA an yours? Me 1/2 native 1/2 other s**t I don't even know about but we trap and we hunt and we fish and we collect plants the ex-PMO city boys in the short pants are on our short list they would not make good eating so for now we will let em go. Children leading a team of boys um makes me wonder I am older than that I see the BS and the lies :> Plus we are not the cannibals they were :> and still are but I got em in my cross-hairs now that I Knows who they are I'll pepper spray them with verbiage and try to teach them how out outrageously nauseous they were to my land they call Canada we welcomed you look what you did to us.

Boys in the short pant's go home to mommy dearest please stay out of business politics and life because you are a walking talking disaster to my mother the EARTH :><:

Owen Gray said...

I wonder if the boys in short pants are listening, Raven.

Anonymous said...

I hate to say it but HSR in the Toronto Montreal corridor is a no brainer. The way I would do it is to fun and expansion of GO in Ontario and the equivilant in Quebec so they meet. Lets settle for electrified rail at 150km/hr express and local service.

Raven Corvoid said...

Hope so but then you know how egocentric they are so probably not. I am forever grateful for as grandfathers age as you I never that I never was blessed with children grandchildren because I would be at a loss of words emotions and tears to try an explain what went wrong.

We are are responsible we are all in debt but not to the friggin bankers that think thew own the earth and put their paper currency above all else we are indebted for destroying our mother :>:, How do you pay that back? White men paper won't do it eh?

I love you Owen stay the course and let us collectively hold the new governments feet to the FIRE :>

Incorrect literature above on purpose because I feel :><: two ravens talking you belong to my clan Owen :>

Owen Gray said...

No need for love, Raven. Just thoughtful analysis.

Owen Gray said...

We've been talking about improving rail service between Montreal and Toronto for decades, Steve. We're still waiting.