Infrastructure Investments Will Lead Canada’s Economic Recovery
April 19th is a big day for the federal government and Canada’s economic prosperity. It’s the day that Minister of Finance Chrystia Freeland will table her first budget and it will be more than two years since the federal government tabled a budget. It’s anticipated that this will be a comprehensive document that will include a vast number of policies and programs to lead Canada’s economic recovery. However, what those policies or programs are and what they focus on is still up in the air. However, one thing remains true and that’s that infrastructure investments are a proven economic stimulus measure.
The Public Policy Forum has found that for every dollar invested in public infrastructure, governments can expect a return on investment of two to four dollars. This is because not only do investments create immediate employment opportunities in the construction sector when projects start, but they also create infrastructure that everyday Canadians rely on. From roads and bridges, to schools and hospitals, to broadband expansion, infrastructure improves quality of life and drives economic growth.
Unfortunately, Canada is falling behind on its infrastructure investments. The Parliamentary Budget Officer continues to report that the 12-year, $180 billion Investing in Canada Plan is still behind by $2 billion in investments and growing. The Auditor General of Canada came out in March to report that found that funds were not being spent as quickly as originally planned. Approximately a fifth of planned spending continues to be unspent and has been moved to later years in the plan. While provinces have suggested thousands of projects in 2020 alone to get approved by the federal government, since 2017 they’ve only approved just over 1,500 projects.
This isn’t a new problem. For decades there have been continuous delays through the federal government’s infrastructure programs, no matter the political party in charge. However, there needs to be a better way forward, especially when Canada is at an economic crossroads. We can either get projects approved and start building infrastructure now, or the delays can continue and other countries globally will surpass Canada. The COVID-19 pandemic has had an equalizing impact across the world, and those countries that recover the fastest will better be able to serve their citizens for decades to come.
The budget tabled on April 19th will decide whether we continue down the same path or find a new mechanism to accelerate approvals and investments. The recent addition of $2.2 billion to the $2.3 billion Gas Tax Fund is a good example of how investments can be expedited directly to municipalities who have projects that are ready to begin. However, the Investing in Canada plan, which holds the lion’s share of investments still needs to catch up. Without a strong construction season in 2021, it is guaranteed that Canada’s economy will not recover as fast as it could have. This is why in the lead up to the budget, AED with construction sector association partners have pressured the government through the Building for Recovery coalition to accelerate infrastructure investments. The construction sector has previously led economic growth in Canada, and is ready to be a partner with government again to rebuild Canada’s economy. It’s time to get investments out the door and get projects started across the country.