Liberals behind on spending

Investments fail to materialize, cash left over

OTTAWA • The Trudeau government may fall short of spending all the money it planned to devote to infrastructure in the first year of its mandate, a new analysis released Tuesday by the federal budget watchdog states.

The parliamentary budget office found some of Ottawa’s planned infrastructure investments failed to materialize in the first half of 2016-17 and it warned a chunk of the cash may have to be spent in the future.

“There is a growing risk that money the government originally expected to be spent in 2016-17 will be deferred to subsequent years,” stated the report published by parliamentary budget officer Jean-Denis Fréchette.

A delay in government spending could affect the timing of the investments’ primary objective: to help lift the country’s slow-growth economy.

The Liberals won the 2015 election on a platform that vowed to run a string of deficits to spend tens of billions over the next decade on infrastructure.

In last year’s budget, the government projected infrastructure spending to boost real gross domestic product — a measure of economic growth — by 0.2 per cent this year and 0.4 per cent in 2017-18. It’s unclear whether a spending postponement would have an impact on economic growth in 2016-17.

Canada’s real GDP is projected to increase by a lacklustre 1.2 per cent in 2016 and two per cent in 2017, according to an average of privatesector forecasts released by Ottawa last fall.

Fréchette’s report said Ottawa’s budget and fall economic statement both laid out plans to transfer $ 3.5 billion in new federal infrastructure money this year to other levels of government.

His analysis found, however, that actual spending might be slower than assumed. It pointed to potential challenges listed in the Infrastructure Department’s most-recent quarterly financial report, including administrative delays caused by limited staff availability to support current programs.

On Tuesday, the Infrastructure Department’s website showed about $ 2.5 billion worth of projects had been approved across Canada. However, this did not reflect how much had been spent.