Canada's Infrastructure: A Fixer-Upper
We Need to Talk
Canada is a contradiction of terms - a tiny giant. With a population of 36 million largely laterally spread out over an approximate 9000 km stretch from east to west, the best way to view this country is spacious. The realistic way to view this country is as a multi-faceted mega-challenge. These conditions are only weathered and championed by the most innovative and hardworking of peoples. So, how does a tiny, spread out country remain economically competitive in a global community consisting of giants like China, the European Union, and their kind? Infrastructure.
Investment in infrastructure allows for better movement of people and goods between important centres, it generates employment, it improves quality of life when done properly, and it allows the country to innovate and the economy to grow. We all know this on a macro scale. However, locally, it means that younger families in urban centres are able to get around work, school, and play by way of more accessible mobility options. It means that rural communities across the nation have access to basic services and urban markets. It also means that businesses can attract and retain a younger, diverse, and well-trained workforce that is invested in it’s success.
The State of the Union
Our economy is shifting, our people are changing. As a nation that relies on immigration to drive its population growth and economic success, what we consider to be Canadian is constantly being reinvented. In this section, we’re going to talk about the bad news; we’ve got a massive infrastructure gap. Estimates suggest that Canada would need to invest up to $1 trillion in our national infrastructure to help the Canadian economy run at optimal productivity and efficiency.
"One-third of our municipal infrastructure is in fair, poor or very poor condition, increasing the risk of service disruption." -2016 Canadian Infrastructure Report Card
Nearly 35% in need of attention. For reference, the report uses ‘very poor’ to refer to assets that are severely overcapacity and/or have operational problems that are serious and ongoing.
We can take a look at certain assets specifically. Public transit averages out at a 72.3% physical condition rating, at the lower threshold of what would be defined as good condition. However, as much as 44% of the nation’s public transit infrastructure stock ranks within the fair to very poor range. Far more interesting, when we parse out stock type, railcars and ferries are in worse shape than Canada’s bus fleet.
Let’s take a look at roads, bridges, and buildings: roads and bridges average out slightly better at 74% and 77% average physical condition rating respectively. Buildings average out at approximately 71%. However, roads and bridges are at investment levels that will result in a decline of their condition over time. There also is a variation in the condition of these assets across the country owing to the fact that 80% of public roadways in Canada are owned by municipalities. Municipalities aren’t funded equitably, and so the investment isn’t distributed as such. For example, the condition of highways and roads in Ontario and Quebec have steadily improved, even back to 2008, due to investments by the respective authorities. In certain circumstances, vote catering leaves municipalities with the most need severely underfunded in exchange for those that support a governing provincial party.
Lastly, our water management systems: up to 30% of the nation’s potable water systems can be rated as high as fair condition. However, objectively, the national average for potable water sits at 78% physical condition rating. The problem in this sector comes from the disparity of conditions to disadvantaged communities like rural and indigenous populations nationwide. Wastewater assets rank similarly, with stormwater management averaging out slightly better at 82%. In all these water management systems, however, we know that current investment levels will result in a decline of these assets over time.
What is Canada doing?
"In the 1950s, Canada spent more than 3% of its GDP on infrastructure. Over the next three decades, that spending fell to 0.4%. of GDP." -Yale School of Management
This trend of poor infrastructure, having carried on for a substantial period of time, yielded detrimental effects that are being felt even today. Back to present day, the federal government, in an effort reported by the International Monetary Fund, will be doubling infrastructure spending to $187 billion over a decade, in addition to the launch of the Canada Infrastructure Bank. This represents an increase of infrastructure spending to 7.5% of our GDP.
These investments are major strides in the right direction, but we need more. Canada is playing catch-up with the rest of the global community. We need to identify innovative models to move intelligently in our infrastructure reinvestment, and get ahead of the game. One such solution is to allow cities to take the charge in implementing the relief that their respective assets need. According to the Federation of Canadian Municipalities, approximately 60% of the nation’s public infrastructure is owned by local government.
Initiatives like the Green Municipal Fund, set up through a $550 million endowment from the federal government, have enabled municipalities to explore customized solutions to footprint reducing infrastructure options across the country. The fund has had many significant successes like saving the equivalent of power for over 7000 homes on an annual basis, reducing GHG emissions by 2.3 million tonnes, and treating the equivalent of 97,200 Olympic swimming pools of wastewater and drinking water. The federal government’s Budget 2016 added another $125 million to the endowment. Importantly, this fund allows municipalities to have access to funding avenues for initiatives that benefit their local communities despite the narrowness of the tax pool available to them.
What should Canada be doing?
At the start of the current federal government’s tenure, Prime Minister Trudeau stated that his government would let cities and provinces decide how to spend infrastructure dollars, in an effort to avoid political interference. This is a healthy attitude towards nation building, and definitely needs to continue in the future. However, certain realities show that provinces and cities, at times, cannot work together due to a number of factors, including political differences.
A key example of this is the well known differences in funding priorities between the previous provincial government in British Columbia and the municipalities within the Metro Vancouver region. This difference, regardless of the politics involved, has resulted in a series of compromises on transit infrastructure projects due to funding shortages. Additionally, because of the funding issues, planners are forced to weigh projects by current ridership, which can be flawed considering how dynamic urban centres can be and how quick the obsolescence of current ridership numbers will be in the next ten years.
Global centres don’t build transit for today’s numbers, but for what the numbers are projected to be by the projects are open for usage. This doesn’t even take into account the fact that a lot of projects approved today are already more than a decade overdue. Even former BC Premier and mayor of Vancouver Mike Harcourt suggested that planners have not viewed these projects with the appropriate focus of scale. According to the Real Estate Board of Greater Vancouver, Metro Vancouver can expect a population increase by 1.2 million by 2041; building transit lines half way and delaying further planning due to funding compromises is setting us up for failure.
There are other such problems owing to the fact that municipalities aren’t being given the ability to be financial leaders, even though the current federal government holds the sentiment that they should. While the sentiment is laudable, it must be accompanied by change to the funding relationship. Local governments are directly invested in the success of their communities given that they are the first to experience the repercussions of failure.
Canada must treat our infrastructure woes as a national priority in many way; it’s a national security and resilience priority, a national economic priority, a national health and well-being priority, a national social equity priority. There is a current gap in infrastructure assets, and there have been severe shortages in funding in previous decades. However, we are taking steps in the right direction even if we need to speed up those efforts. There are many of things to do right, but we should start with giving municipalities more financial power. We cannot continue to ignore infrastructure lest we lose our current importance globally. Canada deserves leadership through action, and it needs it yesterday.