Infrastructure money stalled
Ottawa has delayed billions in spending intended to repair Canada’s crumbling roads and water systems as officials struggle to get the money out the door.
More than $ 2.67 billion of projected infrastructure spending will not occur this year, nor will the projected $2.1 billion be spent next year, according to federal budget docu- ments released Tuesday.
“The challenge is cash flow,” Liberal Infrastructure Minister Amarjeet Sohi said in an interview.
“No project is being delayed at all and no project is being declined at all.”
Federal dollars are only spent once proponents submit receipts for reimbursement, a step that often doesn’t take place until after the project is complete, he said.
As a result, there are often lags between when construction takes place and when the money is paid out of federal coffers.
“We don’t control the construction timeline and we don’t control when we get the invoices and we don’t control when the project is completed,” he said.
So far, more than 4,100 projects have been approved with the combined federal contribution estimated at $ 13.6 billion, according to Infrastructure Canada. Of that money, about $430 million has been paid out.
The federal government isn’t the first government to push spending on infrastructure forward, given the range of players and levels of government involved in funding and constructing large- scale projects, said Azfar Ali Khan, an expert in public sector expenditure at the Institute of Fiscal Studies and Democracy, an Ottawabased think tank.
“To me, this kind of thing is becoming systemic,” he said. “But the plan to invest in infrastructure was one of the key planks of the Liberal’s campaign. There was going to be spending on public transit to cut commute times, spending on infrastructure to help communities, public housing, a lot of things.
“I don’ t know why we wouldn’t also review how we pay for infrastructure and how we can get money out the door more efficiently.”
In all, Ottawa has committed more than $ 180 billion over 12 years to regenerating Canadian infrastructure.
That money could be spent faster and with better results if the government would commit to a clear vision and framework, one that would engage private sector players, said James McKellar, professor of real estate and infrastructure at York University.
“Projects will move ahead much faster if you are able to draw in private collaborators with a clear set of ideas,” he said. “I haven’t seen that from this government.
Given the number of Canadian pension funds interested in investing in infrastructure assets, the Canada Infrastructure Bank — set up to draw private sector investment to help build infrastructure — isn’t necessary, he added. The bank recently appointed its i naugural board of directors but has yet to begin operations.
“It’s not about money,” McKellar said. “These pension funds don’t need money. It’s about ideas. We have to expand our thinking beyond promises of big spending.”