Old funding model cripples housing affordability

Remember I said a few weeks ago, “it may be that we are finally seeking new answers to the old persistent problems” that perpetuate a dependence of municipal governments on development charges that effectively put the costs of replacing infrastructure onto the mortgages of new home buyers?

The voters in Regina in supporting a P3 model for a new waste water treatment plant clearly signalled that since the old ways haven’t worked, it’s time to explore alternatives to financing the essential infrastructure needed to support economic growth. As I said then, I don’t feel one would be going out on a limb by saying it is quite likely that the voter sentiment in Regina is shared across the province. In fact, all communities in Saskatchewan will benefit from the courage and vision of Regina’s mayor and council.

There is in our view a faceless and nameless winner in this debate as well, and that is the new homebuyers and renters moving to new subdivisions across Saskatchewan. Home builders and developers continue to advocate for new approaches to investment in Canada’s municipal infrastructure, approaches that will support affordability and choice in housing. We feel strongly that the public-private partnership option will ease the burden on property tax payers in all classes while facilitating continued investments in job creation and investment attraction. Furthermore, municipalities now have a funding option that offers risk mitigation and alleviates the pressure to take on excessive debt to renew aging infrastructure in older neighbourhoods.

During the past decade, investment in municipal infrastructure has been plagued by significant deficiencies. The decision last spring to adopt a national, longterm infrastructure plan presents substantial opportunities to remedy the deficiencies and provide important benefits to the Canadian economy, but especially the communities in Saskatchewan that have housing supply problems compounded by record growth of our population.

We have dumped the cost of infrastructure onto the mortgages of new home buyers and then we ask for more of their grocery and clothing budget to pay for it by increasing monthly mortgage payment levels. There are more unintended consequences of public policy and the one-size-fits-all approach to housing policy in Canada. To be fair, though, the federal government needs to be acknowledged for committing $70 billion over 10 years to improving and financing infrastructure from coast to coast. Properly leveraged, the cumulative level of funding will approach $210 billion, and where the P3 option is explored we will put a large dent in the national infrastructure deficit while adopting a collaborative plan for building stronger communities in Saskatchewan.

Certainly we would be remiss if we didn’t give kudos to the leadership team at Saskatoon city hall and council for seeking support from Ottawa and the Saskatchewan government for public-private partnerships to advance several of the city’s infrastructure initiatives. The pressure to move people to and from work persists, and building new river crossings is not only an imperative, but as our growth continues, the need for new bridges becomes even more apparent. The P3 model is both a popular and effective funding mechanism across the globe. Using this mechanism wherever appropriate facilitates more job creation and investment attraction. It is equally encouraging that the provincial government has, through prudence and foresight, adopted the P3 model to address the need for new schools in Saskatchewan.

It’s great to read the reports about Saskatoon, Regina and Saskatchewan that appear in national and provincial dailies. This is the place to be, not just the place to be from, but we need to seize the opportunities before us and be timely about it. The private sector brings competence and capacity to help meet the growing demands on our utilities, roadways and community infrastructure. The public sector brings a level of diligence and caring for both the public needs and public purse. These public-private partnerships serve all interests and foster real province building. These partnerships are well suited to the real entrepreneurial culture that is evident in Saskatoon, but also very strong in Regina and many centres throughout the province.

New options and innovative solutions are critical to achieving the objectives within the province’s growth plan sooner rather than later, and clearly public-private partnerships offer a collaborative approach to fostering growth. Alan Thomarat is president and CEO

of the Canadian Home Builders’ Association-Saskatchewan and the Saskatoon & Region Home Builders’ Association. He also serves as a director on the board of the Canadian Home Builders’ Association in Ottawa.