Canada's eroding public infrastructure presents one of the largest risks to the country's competitiveness and overall quality of life over the longer run. While estimates of the so-called infrastructure gap range, a consensus has emerged that the price tag involved in bringing the aging infrastructure up to scratch and supporting future growth is sizeable. Recognizing that the public is ultimately on the hook for paying the bill one way or another, Canadian governments need to make smart choices to ensure that these costs are minimized. First, there needs to be a shift towards charging those directly who consume the services in areas where there are no over-riding equity concerns. Second, a stronger link between governments who raise the funds and those who spend it should be incorporated. Providing municipalities with a broader range of revenue tools, and assist them in making better strategic use of debt would go a long way in achieving these ends. Third, the skills and deep pockets of the private sector can present an enormous opportunity to more efficient delivery of services in many cases. And, fourth, a greater federal contribution is required. In particular, the role of the federal government needs to extend far beyond offering up increased financial support and spending that money more effectively, but in leading the way and bringing all levels of government and the private sector together under one roof. Without all parties working along side each other, the elimination of the infrastructure gap will remain a pipe dream.
Derek Burleton, Senior Economist
416-982-2514
Beata Caranci, Economist
416-982-8067
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