Infrastructure spending pushed to next year
OTTAWA — The Liberal government won’t be able to spend hundreds of millions in infrastructure money this year, instead moving the planned spending to next year.
Spending documents released Tuesday show that $828 million that was budgeted to be spent this year on the Liberals’ new infrastructure plan will be moved over to the coming fiscal year that begins April 1.
That amount represents about one quarter of the $3.27 billion budgeted to be spent on new and existing infrastructure programs in the 2016-2017 fiscal year.
The figure doesn’t include $282 million that Public Services and Procurement Canada and Fisheries and Oceans had planned to spend on federal infrastructure projects in this fiscal year. Nor does it include $24.4 million being carried over from a national program to upgrade community and cultural centres as part of Canada 150 celebrations.
It’s not unheard of to have federal infrastructure money “reprofiled” from one fiscal year to the next: Spending analyses have shown that about one-quarter of infrastructure funds don’t get spent in the year for which they are budgeted.
The reason is that federal dollars only flow once project proponents submit receipts for reimbursement, often leaving a lag between when work takes place and when infrastructure money is actually spent. In some cases, the federal government won’t receive receipts until the end of a project. And projects themselves can be delayed for any number of reasons, such as bad weather or a labour disruption, that are beyond the control of the federal government. The money, however, doesn’t disappear. “Money committed to specific projects continues to be available for those projects and is reprofiled as needed to reflect the updated needs of our partners and their timelines,” said Brook Simpson, a spokesperson for Infrastructure Minister Amarjeet Sohi.
“We will continue to work with all of our partners to deliver on our infrastructure commitments.”
The government’s economic agenda is tied to spurring construction projects that can create enough growth to help bring the budget back to balance, which Finance Canada doesn’t expect to happen for decades under current spending plans.
The government is quick to say a lack of federal spending doesn’t necessarily mean that cities and provinces aren’t spending money on projects that can yield the needed economic benefit.
The latest figures tabled in Parliament add to concerns raised earlier this month by the parliamentary budget office that departments are well behind on allocating infrastructure spending, putting economic growth projections at risk.
The Liberals’ first budget predicted that the infrastructure money would boost the economy by 0.6 per cent over two years.
Last week, in an appearance before the Senate’s national finance committee, budget officer Jean-Denis Frechette said the actual impact could now be lower, given the slow pace of fund allocation. Frechette’s office now predicts a reduction in employment equal to 7,400 full-time jobs.