Much of Canada's existing public infrastructure was put in place in the 1950s, 1960s and 1970s. And, given the fact that the useful life of most of the country's physical structures only extends up to four to five decades, a significant share of assets would be already ripe for replacement or rapidly approaching the end of their cycle. However, there have been a number of developments on both the supply and demand sides of the equation that have acted to accelerate the amount of wear and tear on many public assets over the past few decades:
First, apart from brief periods of recession in the early 1980s and early 1990s, the Canadian economy has grown steadily, placing added strains on the nation's public infrastructure. This has been no more apparent than in the largest urban centres, which have accounted for the bulk of the gains in economic activity, new immigrants, and overall population in recent decades.
Second, the growth in supply of infrastructure was greatly curtailed in the 1980s and the first half of the 1990s when the federal and provincial governments ran into deficit problems. Not only were cuts to government capital spending more politically palatable than those made to operations, but the "big ticket" nature of large infrastructure projects meant that the immediate savings that could be realized from reductions on that side were substantial.
Third, notwithstanding the fiscal woes of the federal and provincial governments, the largest obstacle in the way of satisfying increasing infrastructure demands has been at the local level. Notably, Canadian local governments were asked to take on added responsibilities at the same time as municipal grants were being scaled back. Furthermore, owing to restrictive provincial legislation, municipalities have remained heavily reliant on funding these growing needs through the use of the property tax - a revenue instrument that does not tend to grow over time at the same pace as the cost of service delivery.
Fourth, a number of ill-thought-out policy approaches have contributed to the public infrastructure challenge. For one, in many instances, a less-than-stellar job has been done maintaining and rehabilitating public assets on schedule, which has acted to shorten the useful life of infrastructure. What's more, a number of government policies - including setting the level of property taxes, development charges and user fees below the cost of delivering a service - have fuelled urban sprawl, and hence raised the average cost of infrastructure provision.