Report slams Canada's infrastructure

Canada needs to invest an estimated $200 billion in public infrastructure to help keep private sector industry competitive, according to a new study by the Institute for Research on Public Policy.  ┬á In the report, University of Waterloo economist James Brox analyzed the condition of Canada's infrastructure and its impact on productivity, specifically within the manufacturing sector.┬á┬á The study argues that Canada's competitiveness depends on a modern, efficient and well-maintained public infrastructure network, and that productivity in Canada's manufacturing sector has been adversely affected by poor infrastructure. ┬á┬á "I think it's becoming fairly critical," said Brox. "The manufacturing sector in Canada is losing competitiveness; there are a number of reasons for that, but the lack of proper infrastructure is clearly part of the problem."┬á┬á The study found that spending on the country's roads, highways, utilities, water systems and other key infrastructure is a little more than half of what it was in the 1960s, but that the facilities built back then are starting to crumble and services are deteriorating.┬á┬á To correct what some refer to as "infrastructure gap," Brox says up to $200 billion must be injected into infrastructure projectsÔÇö$72 billion for new work and $123 billion to repair and maintain existing infrastructure. ┬á┬á According to his research, recent funding commitments from federal and provincial governments total around $65 billion. "If they don't increase that there's a risk that the current infrastructure will deteriorate and will mean that in the future we'll need to invest even more," said Brox.┬á┬á Brox calculated that a 10 percent increase in annual infrastructure spending, over a sustained period, would cut manufacturers' costs by 5 percent. Such a reduction would increase productivity and therefore make companies more competitive, he concluded.┬á┬á One of the main reasons behind the infrastructure gap has been the shift in responsibility for infrastructure from the federal government to the provincial and territorial governments, who have in turn passed it on to the municipalities. ┬á┬á Some argue that this makes sense because regional levels of government know best what they need, but the question of who pays for it is still a problem.┬á┬á "The problem is that while the senior governments have been happy to download jurisdiction for infrastructure, they've not been so ready to download revenue sources. So municipalities are stuck raising funds from property taxes, a fairly regressive form of taxation, and all infrastructure tends to fall on that unless the province or the federal government transfers funds for specific projects," said Brox. ┬á*┬á┬á┬á┬á┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á┬á┬á┬á *