Infrastructure underinvestment a chronic problem in Canada: study
Canadian dollars are pictured in Vancouver, B.C. Thursday, Sept. 22, 2011. THE CANADIAN PRESS/Jonathan Hayward
Published Thursday, January 24, 2013 7:36AM EST
Last Updated Thursday, January 24, 2013 12:16PM EST
OTTAWA -- A new study suggests that on top of current spending as much as an additional $30 billion a year for 10 years would be needed to return infrastructure spending in Canada to historic levels.
The study, from the left-leaning Canadian Centre for Policy Alternatives, says underinvestment in infrastructure is a chronic problem in Canada.
The centre says investment peaked at just over three per cent of gross domestic product in the late 1950s and then steadily declined until the mid-2000s.
It notes the federal-provincial economic stimulus program temporarily reversed the trend, but says up to $300 billion over 10 years is needed on top of current spending to return funding to levels not seen since the 1950s.
The study also suggests the federal government has shifted responsibility for infrastructure investment to municipalities over the past several decades.
It says the federal government accounted for 34 per cent of capital investment in 1955, but that figure had declined to 13 per cent by 2003.
"The shift in responsibility for public capital investment from senior governments to local governments has not been matched by corresponding increases in transfer payments," said CCPA economist and research associate Hugh Mackenzie.
"The cumulative effect of this underinvestment means we are missing $145 billion worth of infrastructure," he added.
"That's a lot of new roads, bridges, and buildings we're missing-not to mention missing maintenance on our existing infrastructure."
The study's recommendations include a call to resist the "tendency to use infrastructure funding as a political pork barrel or to use that funding as a lever for ideological agendas such as public-private partnerships."