Canada’s Infrastructure – Investing in the Future

Maple leaf on water with other leaves.It is widely known that America’s infrastructure is in desperate need of repair, rehabilitation, and replacement, and that the American Society of Civil Engineers (ASCE) gave water and wastewater infrastructure a “D” grade in its 2013 report card. Contributing to the decline of our buried infrastructure is a combination of aging assets, increasing demand, and decreasing funding. However, America is not alone. Our neighbors to the north are also experiencing an infrastructure crisis and, like the United States, are working together to develop short-term and long-term strategies to ensure that its critical infrastructure continues to successfully function well into the future.

The 2016 Canadian Infrastructure Report Card

Four organizations — the Canadian Construction Association (CCA), the Canadian Public Works Association (CPWA), the Canadian Society for Civil Engineering (CSCE), and the Federation of Canadian Municipalities (FCM) — came together to assess the health of Canada’s infrastructure. The resulting report, Informing the Future: The 2016 Canadian Infrastructure Report Card (2016 CIRC), provides information to policymakers and stakeholders regarding the state of Canada’s infrastructure and what is needed to maintain and improve it. Additional support for the project came from the Canadian Urban Transit Association, the Federal-Provincial/Territorial Sport, Physical Activity and Recreation Committee, and the Canadian Parks and Recreation Association. One of the overarching goals of the assessment is to ensure the sustainability of the high quality of life that infrastructure brings to the Canadian people. Infrastructure evaluated included water, wastewater, and stormwater infrastructure as well as roads and bridges, buildings, public transit, and recreational facilities.

A key finding in the 2016 CIRC is that over one-third of Canada’s municipal infrastructure is in fair, poor, or very poor condition, and at risk of rapid decline. To prevent this deterioration, investment in the maintenance and repair of failing infrastructure is critical in the short-term. The report also noted that despite the efforts of municipal governments, reinvestment rates in municipal infrastructure are falling behind — a trend which will cause an exponential increase in the overall cost for infrastructure repair and rehabilitation if left unchecked.

canada-infrastructure
Toronto, Ontario, Canada skyline

Because resources are limited, strategic investment into those assets most in need of repair or replacement is paramount. However, a surprising number of Canadian municipalities, particularly smaller systems, lack any type of formal asset management plan. The 2016 CIRC survey results indicate that 62% of large municipalities, 56% of mid-sized municipalities, and only 35% of small municipalities reported having a formal asset management plan in place. And while all communities benefit from an asset management plan that prioritizes capital investment, small municipalities that admittedly have the least amount of resources would likely benefit the most. Additional findings of the report indicate that climate change is not consistently being factored into the decision-making processes of municipalities, and that most municipalities also do not utilize computer-based information to manage and maintain their assets.

The Federal Gas Tax Fund

As part of the New Building Canada Plan, the renewed federal Gas Tax Fund (GTF) was announced in the Economic Action Plan 2013 as a long-term, stable source of funding for municipal infrastructure. Implemented as a means of addressing the infrastructure funding gap, the Gas Tax Fund will provide $10.4 billion to Canada’s municipalities between 2014 and 2018. Because Canada recognizes the criticality of an up-to-date asset management plan, the renewed GTF prioritizes long-term capital planning and asset management. For example, Ontario municipalities will receive $3.8 billion from the GTF between 2014 and 2018, more than any other province; the Association of Municipalities Ontario (AMO) has made the receipt of those funds contingent upon adherence to a new policy. Ontario municipalities are required to develop and implement an asset management plan by December 31, 2016 in order to continue to receive federal GTF payments.

Investing in Canada

Fortunately, Canadians recognize the importance of infrastructure to their way of life and are committed to investing in infrastructure and bridging the infrastructure gap both now and in the future. Budget 2016 saw the newly elected Canadian government, focused on strengthening the middle class, show its firm commitment to Canada’s future growth by making an immediate investment of $11.9 billion into green and social infrastructure as well as public transit. The Fall Economic Statement, released on November 1, 2016, further strengthens that commitment by promising an additional $81.2 billion investment into Canadian infrastructure over 11 years, as follows:

  • Toronto Transit Commission public transit bus in Toronto, Ontario, Canada
    Toronto Transit Commission public transit bus in Toronto, Ontario, Canada

    Public Transit: Faster Commutes and Innovative Communities—$25.3 Billion
    Public transit infrastructure investments will have a greater focus on new, transformative construction and expansion projects that build the transit systems of the 21st century.

  • Green infrastructure: Clean Air, Clean Water—$21.9 Billion
    The federal government will work with its provincial, territorial, municipal, and Indigenous partners to evaluate, select, and fund the green infrastructure projects that will deliver the best outcomes for Canadians.
  • Social Infrastructure: Better Neighborhoods for Our Kids—$21.9 Billion
    Investments in social infrastructure will focus on affordable housing and homelessness prevention, early learning and child care, and cultural and recreational infrastructure.
  • Getting Canadian Products to Global Markets—$10.1 Billion
    The government will make strategic investments in trade and transportation projects that build stronger, more efficient transportation corridors to international markets and help Canadian businesses to compete, grow, and create more jobs for Canada’s middle class.
  • Rural and Northern Communities—$2 Billion
    Through Investing in Canada, the government will provide up to $2 billion to support small, rural, and northern communities with a wide range of infrastructure needs.
Emerald Lake, Yoho National Park, British Columbia, Canada
Emerald Lake, Yoho National Park, British Columbia, Canada

Considering existing infrastructure programs, new investments made in Budget 2016, and the additional investments detailed in the Fall Economic Statement, the Canadian government has committed to investing over $180 billion into its critical infrastructure over the next decade.

The Canada Infrastructure Bank

The Canadian government has also announced that it is launching the new Canada Infrastructure Bank to provide low-cost financing and small capital contributions for necessary infrastructure projects. $35 billion has been earmarked for large infrastructure projects that directly contribute to economic growth, $15 billion of which will be sourced from the previously announced funding for green and social infrastructure, public transit, trade and transportation, and rural and northern communities. The remaining $20 billion will be available to the Bank for investments that result in the Bank holding assets in the form of equity or debt, and will therefore have no fiscal impact on the government.

In Conclusion

Much of Canada’s infrastructure, like our own here in America, is reaching the end of its useful life and is in desperate need of repair or replacement. The Canadian people and government recognize that infrastructure plays a critical role in maintaining the high quality of life to which Canadians are accustomed. Through increased asset management, targeted investment, a committed government, and a long-term, sustainable plan, Canada is well positioning itself for future growth and prosperity.

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Election 2016 – Vote to Invest in Infrastructure

This year’s presidential campaign trail has been unique. The two leading candidates challenge convention in numerous ways, and have fostered one of the most heated election years in decades. While many issues and facts have fueled both the passion and the divisiveness of this year’s presidential election, there is one issue on which all parties agree: the urgent need to invest in infrastructure.

Out of Sight, Out of Mind

Just as important as our roadways is the buried water and wastewater infrastructure beneath it
Just as important as our roadways is the buried water and wastewater infrastructure beneath it

Because our nation’s water and wastewater infrastructure is buried underground, it is often forgotten. After all, safe, clean drinking water is ours at the turn of the tap, and wastewater disappears instantly with the flush of a toilet. This buried infrastructure is one of the key components of modern-day civilization, without which our society would cease to function properly – if at all.

Alarmingly, our national water and wastewater infrastructure is in desperate need of upgrading. The ASCE 2013 Report Card for America’s Infrastructure gives our water and wastewater infrastructure a D grade, and the EPA notes that about 30% of large system pipes are 40-80 years old, and another 10% are over 80 years old. In the northeast, this statistic only goes up, with some pipes being well over 100 years old.  Our nation’s infrastructure is arguably reaching the end of its useful life. Currently, we lose about seven billion gallons of clean, treated drinking water every single day from leaky pipes, which is enough water to supply the daily needs of the entire state of California. Considering that many communities, including the State of California, have been under drought watch for years, this water loss is deeply concerning.

In addition to our nation’s crumbling water infrastructure, many of our nation’s water service lines are made of lead. To avoid catastrophes like the Flint, Michigan lead crisis earlier this year, the lead service lines that are still supplying seven to ten million American homes need replacement. Also, many of our nation’s wastewater treatment plants were constructed following the passage of the Clean Water Act in 1974, and they are now 30-40 years old and very much in need of rehabilitation or replacement.

Where the Presidential Candidates Stand on Infrastructure

2016 Presidential hopefuls Donald Trump (R) and Hillary Clinton (D)
2016 Presidential hopefuls Donald Trump (R) and Hillary Clinton (D)

To improve our water and wastewater systems before they reach failure, it is imperative that our elected leaders push for legislation to invest in infrastructure. Yet because our nation has so many other pressing issues and needs, our buried infrastructure is often overlooked. However, in the wake of this year’s Flint, Michigan lead crisis, our nation’s water and wastewater infrastructure has come to the forefront of the minds of American citizens and legislators, with some funding and improvement already being implemented. It is crucial that we elect leaders who will continue this momentum.

At the presidential level, both candidates have promised increased funding for our buried infrastructure. Democratic candidate Hillary Clinton has proposed a plan which includes spending $250 billion over the next five years on all types of infrastructure, including not only water and wastewater systems but also roads and bridges, broadband, passenger rail systems, airports, levees, and dams. In addition, her plan includes $25 billion in seed money to establish a National Infrastructure Bank, which would provide funding for local infrastructure projects. She has said that the bulk of her $275 billion plan would be funded by business tax reforms.

Republican candidate Donald Trump has proposed a decade-long, $1 trillion plan that was drafted by economic advisors Peter Navarro and Wilbur Ross. Unlike Clinton’s plan which depends on additional taxes, Trump’s plan relies heavily on private funding and tax credits for investment. Trump’s belief is that taxes collected from laborers and from companies working on these projects would offset any costs incurred by the government in the form of tax credits to investors. In addition, projects that receive tax credits would be required to have a dedicated source of revenue, such as tolls for roads or water bills for utilities, that would guarantee a source of cash flow back to investors and better attract private investment.

Voting for the Future of our Nation

Be sure to vote on November 8, 2016 - every vote counts!
Be sure to vote on November 8, 2016 – every vote counts!

Besides the presidential candidates, there are numerous elections for Senate and Congressional seats that will play a key role in the future of our nation’s infrastructure. Because the president is only as effective as the Senate and Congress that support him or her, it is critical that we as a nation elect legislators who will champion plans of action and funding to rehabilitate and replace our nation’s buried infrastructure both now and in the future. Whether the investment comes from taxpayers, private investors, or a combination of the two, the fact remains that the clock is ticking on our nation’s water and wastewater infrastructure and the time to invest in infrastructure is now. Happy voting!

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