Be wary of federal Liberals bearing infrastructure gifts
Before Justin Trudeau’s Liberals release a torrent of new promises for this year’s federal election, they’d better account for the biggest promises they made the last time Canadians voted.
And one of the most lavish promises from 2015 that badly needs some explaining is the one about all that massive new infrastructure spending. The results of this signal Liberal program have, at best, been mixed.
Remember how it was supposed to be a win-win-win deal? The Liberals promised to run modest, short-term deficits in large part to spend billions of new dollars on infrastructure projects that would make life better for Canadians. On election day — as the Liberals’ victory proved — voters embraced the idea of incurring a bit more federal debt to pump up the economy while building badly needed new roads, bridges and public transit.
Of course, more than three years later we know it didn’t work as planned. The deficits were enormous — far bigger than the Liberals vowed. Nor did the deficits last for just a couple of years: There’s no end in sight for federal budgets hemorrhaging red ink.
Meanwhile, the Liberals’ track record for signing those infrastructure cheques for worthy projects that proceed in a timely, efficient manner is disappointing.
Last March, Parliamentary Budget Officer JeanDenis Frechette said the economic benefits of the infrastructure program were far more modest than the Liberals had said they would be. Moreover, the program was significantly behind schedule.
The latest report card on the federal infrastructure program came from the Parliamentary Budget Officer in August. It concluded the infrastructure spending is still “delayed” when compared with the original schedule announced in the 2016 budget.
These aren’t the only knocks against the program. Bank of Canada Governor Stephen Poloz released a report in October that said federal infrastructure spending was “persistently weaker than expected.”
Meanwhile, the program can have unintended, undesirable results even when the funding flows. Internal documents revealed the first part of the infrastructure program — $14.4 billion — pushed up prices as the demand for the work outpaced the supply of companies available for the projects in many parts of the country. Many municipal projects went over budget because Ottawa typically doesn’t cover cost overruns.
There’s a lot of public money at stake here. Trudeau’s plan currently calls for more than $180 billion to be spent on infrastructure over 12 years. To be fair, the Liberals aren’t the first government that’s struggled to translate noble infrastructure intentions into literally concrete action. They’re also trying to make the program work better and get more construction going this year.
Last summer, Prime Minister Trudeau appointed a new infrastructure minister — Francois-Philippe Champagne — who has extensive experience in working internationally with engineering firms. Champagne hopes to expedite federal planning so more infrastructure dollars can get more projects underway this spring.
Canadians of all political stripes who will pay for these initiatives will hope the Liberals finally start getting a better bang for all those public bucks. But voters shouldn’t have to take Trudeau’s word that everything’s on track. They should also look to the Parliamentary Budget Officer for a final report card on infrastructure spending before this fall’s federal election. There are also some take-away lessons. There’s a difference between promising to spend $180 billion and actually spending $180 billion wisely. It’s easier to sell the public on new roads, highways, transit and water systems than actually deliver them. And even the most solid-looking of election-platform planks should be inspected closely. They may be riddled with termites.