Infrastructure should include tolls: Dodge

Former bank boss wants push to improve cities

• With the Liberal government set to unveil blueprints for a massive infrastructure program in Tuesday’s budget, a man who has given a lot of thought — and advice — on the subject is highlighting key elements Ottawa should consider.

Former Bank of Canada governor David Dodge recommends Ottawa take potential political risks by placing particular focus on the needs of the biggest cities, even though cash for the program is collected across the country.

Then there’s what Dodge calls his favourite suggestion: user fees or tolls on major roads and bridges to help support the infrastructure over the long haul.

“It takes some political stickhandling — I just think that the time has come,” Dodge said of user fees.

“Why do we charge for the use of buses and subways and give away the roads, quote, free, unquote? Obviously, it leads to a misallocation of resources.”

Selling the idea to rural Canada that funnelling a larger proportion of public cash into Toronto, Montreal and Vancouver likely would present another challenge for Ottawa, he said.

But Dodge believes enhancing urban infrastructure such as public transit would be in the best interests of the economy overall, enabling the cities to compete globally for high-quality employers and workers.

“From a pure economic standpoint, our big infras t r ucture problems are ports, major urban areas and major transportation corridors,” said Dodge, who has advised the Ontario and Alberta governments on infrastructure.

“The last thing we need is to cook up a bunch of painting projects or whatever that really are not going to help very much in the rural communities.”

Dodge’s remarks about Ottawa’s multibillion- dollar infrastructure plan come as the Liberals prepare to release details of the program in their first budget.

On Thursday, Prime Minister Justin Trudeau told a Bloomberg interviewer in New York that the first two years of the government’s decade- long infrastructure program will focus on “unsexy” things that governments hate to announce.

He then listed off items such as recapitalization, deferred maintenance, upgrades and restoring signals on subways.

Trudeau acknowledged that he doubted ramping up these types of early investments would boost Canada’s weak productivity.

He said after the initial phase Ottawa would focus government spending on larger, more- detailed projects aimed at increasing longterm growth and guiding Canada toward a low-carbon economy.

“What we’re looking at is not so much trying to jolt the economy into life, as trying to lay the groundwork and the foundation for better growth, better productivity over the long term — and not just an instant influx of cash,” Trudeau said.

“I think the challenge when you’re trying to shovel money out the door is that it doesn’t always get spent on the right things.”

The president of the Federation of Canadian Municipalities, Raymond Louie, s ai d: “The government needs to be forward-looking — we know that there’s a migration of people into our more- urban centres and the government needs to be responsive to that trend.”

But he added, “We can’t forget the small communities as part of the situation as well. It is a challenging task for the government.”