III. Does the Infrastructure Deficit Matter?
In commenting on the current state of infrastructure in Quebec, the commission investigating the collapse of a portion of the de la Concorde overpass.
"THE COMMISSION'S MANDATE REVEALED THE NEED TO MODERNIZE OUR INFRASTRUCTURE, BUILT LARGELY IN THE 30 YEARS FOLLOWING WORLD WAR II. QUÉBEC IS NOT ALONE; THE SITUATION IS SIMILAR ACROSS ALL OF NORTH AMERICA. AT ISSUE IS NOT ONLY PUBLIC SAFETY BUT THE ABILITY TO MAINTAIN FIRST-RATE INFRASTRUCTURE, WHICH PLAYS A ROLE IN THE QUALITY OF LIFE OF QUÉBEC'S RESIDENTS AND ITS ECONOMIC DEVELOPMENT."6
In addition, the Federal Budget 2006, Restoring Fiscal Balance in Canada-Focusing on Priorities, noted:
"CANADA'S QUALITY OF LIFE AND ECONOMIC COMPETITIVENESS DEPEND IN PART ON HAVING RELIABLE, EFFICIENT INFRASTRUCTURE THAT IS PROVIDED IN LARGE PART BY THE MUNICIPAL, PROVINCIAL, TERRITORIAL AND FEDERAL GOVERNMENTS."
The health of Canada's economy is closely linked to the scope and quality of municipal infrastructure investment. Our quality of life and our productivity and competitiveness depend on infrastructure investment. Statistics Canada estimates that a one-dollar net increase in public capital stock generates approximately 17 cents on average in private-sector cost savings.7 For the transportation sector, each dollar invested in transportation infrastructure is projected to generate a saving of more than 40 cents.8
The cost of not investing in infrastructure is equally high. In 2004, the TD Bank Financial Group estimated that the loss from congestion and shipment delays in the Greater Toronto Area totals $2 billion annually.9 Federal Finance Minister James Flaherty echoed this concern in a 2006 speech to the Whitby Chamber of Commerce, stating, "Infrastructure challenges are more than a daily inconvenience; they pose real risks to the future prosperity of our communities, and to the entire country."
In addition to its role in economic competitiveness, sufficient and well-maintained infrastructure is a basic requirement for safe communities. The collapse of an overpass in Laval, Que., and an interstate highway bridge in Minneapolis are tragic examples of infrastructure failures that led to loss of life and significant economic disruption.
Infrastructure investments are important for many other social, environmental and health reasons as well. For example:
• Investments in public transit help reduce greenhouse emissions and air pollution.
• Modern water treatment systems are required to provide safe, reliable drinking water and reduce the incidence of boil-water advisories across the country.
• New and expanded sports and recreation facilities are needed to increase physical activity and reduce growing rates of childhood obesity.
• Rural, northern and remote communities need a full range of public infrastructure, from roads and water supply to libraries and community centres, to protect quality of life and foster new economic development.
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6 Report of the Commission of inquiry into the collapse of a portion of the de la Concorde overpass (2007), p. 198.
7 In Mind the Gap (pp. 5-6), the TD Bank argues that if the infrastructure gap had not been allowed to open in the first place, an additional $100 billion or more in spending would have been required, implying a reduction of nearly $17 billion in private-sector costs. However, had the money for this spending been borrowed at a rate of 6 per cent, a full $6-$9 billion in higher annual debt service payments would have been the result. This is still well below the $17 billion in private-sector savings.
8 Tarek M. Harchaoui, Faouzi Tarkhani and Paul Warren, Public Infrastructure in Canada: Where Do We Stand? (Ottawa: Statistics Canada, 2003).
9 TD Bank Financial Group, Mind the Gap, Finding the Money to Upgrade Canada's Aging Public Infrastructure, (2004), p.5.