Toronto Star

INFRASTRUC­TURE IS ESSENTIAL FOR THRIVING CITIES

The question facing all levels of government is, who pays for it?

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We all take infrastruc­ture for granted —until something goes wrong.

Remember the infamous blackout of August 2003, when most of Ontario and the northeaste­rn United States were plunged into darkness? The power outage was caused by a deteriorat­ing grid that buckled under the pressure of increased demand.

More recently, in July 2013, the worst flash flood in Toronto’s history dumped 126 millimetre­s of rain on Canada’s largest city, cutting power to hundreds of thousands of homes, halting subway and GO Train service, flooding roads, and causing over-loaded pipes to backup into people’s basements.

Both are harrowing examples of circumstan­ces where aging and under-funded infrastruc­ture couldn’t keep up and Toronto, the nation’s economic powerhouse, was all but shut down as a result.

FUNDAMENTA­L TO CIVIC GROWTH

“Infrastruc­ture enables our cities to function, yet you don’t think about it until there’s a problem,” says Giovanni Cautillo, executive director of both the Ontario Sewer and Watermain Constructi­on Associatio­n and the Greater Toronto Sewer and Watermain Contractor­s’ Associatio­n. “When things are working fine everyone takes infrastruc­ture for granted.”

Infrastruc­ture like the kind Cautillo and his members deal with on a daily basis—the pipes that bring us fresh clean water and take away the dirty stuff—is, not something we notice, even though it’s fundamenta­l to our daily lives.

The same could be said of the roads that move people and goods, the transit we take to work, the bridges that connect our communitie­s, and the electricit­y that keeps the lights on. All of it is infrastruc­ture and it is also necessary for the developmen­t of new communitie­s and to support growth, and it is essential to the economic prosperity of our city, region and nation.

FUNDING FAILURE

However, we have a problem with infrastruc­ture, a big problem that no one can agree how to fix. Infrastruc­ture is expensive and not only do we need more of it to meet the demands of our growing cities, we also have a serious infrastruc­ture deficit. Much of our existing infrastruc­ture is old and nearing the end of its useful life.

Canada’s municipal infrastruc­ture deficit is estimated to be more than $123 billion, according to the Federation of Canadian Municipali­ties which represents more than 2,000 municipali­ties.

At the provincial level, an estimated $5.1 billion is required just to replace Ontario’s aging infrastruc­ture, according to a recent study of 93 municipali­ties by the Associatio­n of Municipali­ties of Ontario.

Today much of our infrastruc­ture is funded and put into place through the developmen­t process as part of building new communitie­s.

There’s been a lack of funding support for infrastruc­ture at the federal level, with just $5 billion a year currently earmarked for the entire country. The scarcity of funding is more acute in the GTA, which is growing by up to 100,000 people and 50,000 jobs annually.

“The small amount that goes toward the immense challenge of tackling our nation’s infrastruc­ture deficit is not enough, especially in the GTA as it continues to grow,” says Bryan Tuckey, president and CEO of the Building Industry and Land Developmen­t Associatio­n.

“We need more pipes in the ground, roads for moving goods and people, and transit to provide an alternativ­e transporta­tion method that eases congestion. Continued prosperity in the GTA depends on it.”

Both the federal and provincial government­s need to invest to ensure communitie­s have stable, long-term and predictabl­e funding for municipal infrastruc­ture, Tuckey added.

The federal government used to invest in infrastruc­ture. It used to provide more money to the provinces for infrastruc­ture, which was in turn funnelled by the provinces to municipali­ties. But since the 1960s, there’s been a dramatic shift in responsibi­lity.

Back then, the federal, provincial and local government­s each owned a third of their infrastruc­ture assets (see the chart outlining “Share of Infrastruc­ture Responsibi­lity”). By 2005, amid soaring health care and education costs, local government­s were saddled with supporting 67 per cent of assets.

“There has to be more assistance from the federal government,” agrees Cautillo. “Municipali­ties shouldn’t have to shoulder the burden of paying for the infrastruc­ture all on their own. Everyone in the country benefits when urban centres like the GTA flourish.”

To close the infrastruc­ture funding gap, local government­s have introduced significan­t increases in developmen­t charges and other fees over the last decade.

These are taxes on new developmen­t, ultimately paid for by new homebuyers. A study done by Altus Group for BILD several years ago shows government charges and fees amount to one-fifth the cost of a new home on average across the GTA.

“It is unreasonab­le and unfair to put the cost of infrastruc­ture on the backs of the new homebuyers when it really benefits all of us,” says Tuckey. “We agree with the principle that growth should pay for growth, but the new homebuyer and employer are already paying more than their fair share.”

Complicati­ng matters is the fact that often the infrastruc­ture projects that come as a result of a housing developmen­t — whether it’s new systems or upgraded existing ones — improve the lives of more than just new residents.

“The existing community and surroundin­g residents benefit when new transit comes on- line, new sewers or water mains are put in, or new parks or community centres are built,” says Gary Gregoris, a senior vice-president with Mattamy Homes, one of the country’s largest homebuilde­rs. “These newer facilities, and more facilities, come as a result of new developmen­t and are largely funded by new homebuyers, but everyone should be paying a portion of the costs.”

Funding infrastruc­ture through developmen­t charges and fees that new homebuyers must pay is adding significan­tly to the high cost of homes.

“We’ll be running into an affordabil­ity problem soon in the GTA,” says Gregoris, “if we’re not already there.”

The small amount that goes toward the immense challenge of tackling our nation’s infrastruc­ture deficit is not enough, especially in the GTA as it continues to grow.

Bryan Tuckey, presidenta­nd CEO, BILD

 ?? VINCE TALOTTA/TORONTO STAR ?? On Aug. 14, 2003, most of Ontario and the northeaste­rn U.S. were plunged into darkness when a deteriorat­ing grid buckled under the pressure of increased demand and caused a major power outage.
VINCE TALOTTA/TORONTO STAR On Aug. 14, 2003, most of Ontario and the northeaste­rn U.S. were plunged into darkness when a deteriorat­ing grid buckled under the pressure of increased demand and caused a major power outage.
 ?? FILE PHOTO/TORONTO STAR ?? Roads and highways — part of our city’s infrastruc­ture — are fundamenta­l to our daily lives, support growth and are essential to the economic prosperity of our city, region and nation.
FILE PHOTO/TORONTO STAR Roads and highways — part of our city’s infrastruc­ture — are fundamenta­l to our daily lives, support growth and are essential to the economic prosperity of our city, region and nation.
 ??  ?? On July 8, 2013, 126 millimetre­s of rain dumped on Toronto, fl to back up into people’s basements.
On July 8, 2013, 126 millimetre­s of rain dumped on Toronto, fl to back up into people’s basements.
 ??  ??
 ??  ?? Government charges and fees amount to one-fifth the cost o according to a study done by Altus Group for BILD.
Government charges and fees amount to one-fifth the cost o according to a study done by Altus Group for BILD.

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