Winnipeg needs a strategic plan to guide economic growth, and investment in its transportation network should be an essential piece of that plan.
So says Chris Lorenc, president of the Manitoba Heavy Construction Association (MHCA).
Lorenc recently met with Winnipeg Mayor Scott Gillingham to discuss the respective needs of city and industry, including the “invest to grow” plan the MHCA submitted to all mayoral candidates before the October 2022 municipal election.
“Our meeting with mayor Gillingham was excellent,” said Lorenc. “Before being elected last fall, he had been a city councillor for eight years. For six years he was chairman of Winnipeg’s finance committee.”
Lorenc says Gillingham is “an excellent steward of finances.”
“He understands the need to invest in trade and in growth, because without growth we’re static,” he said.
Lorenc says the key element of the MHCA invest to grow strategy is making economic growth the core of all city investment decision-making, thereby ensuring there is enough revenue in Winnipeg’s coffers to pay for the services its residents want.
MHCA believes growing the economy is job one for every level of government.
“Anyone can spend, but the revenues to purchase the goods and services the voters want have to be generated first,” said Lorenc. “Government is no different from the private sector or individuals. They are all constrained by economics.”
The invest to grow strategy has six sets of recommendations, five of which pertain to budgets and governance.
One, however, which is titled “Our Economy Rides on Roads,” deals with civic horizontal infrastructure.
The MHCA recommends updating some of the conditions of Winnipeg’s local and regional street system to ensure there is a sustainable funding model.
It says the city should keep a tax that was brought in several years ago to improve its network of local and regional streets, but that the revenues must continue to be dedicated to street renewal.
In addition, the MHCA says there needs to be sustainable funding agreements with senior levels of government as well as a detailed strategic transportation infrastructure investment plan that puts priority on those projects that provide the best return on investment to gross domestic product (GDP).
Lorenc says there are cities in Canada that have good economic development programs, citing Calgary, Edmonton and Toronto.
“They act as unified regions, not as collections of individual municipalities, and market themselves as single regions,” he said. “That shows big-picture thinking, and Winnipeg should be doing the same thing.”
Lorenc says an invest to grow strategy can be the backbone not just of prudent financial stewardship for the next operating and capital budget cycles, but also as the enabler of flexible municipal fiscal power.
“Transportation infrastructure is called ‘smart debt’ because, done right, it pays dividends,” said Lorenc. “Multiple economic analyses have confirmed this.”
The findings in question show a return on investment to GDP of between $1.30 and $1.60 for every $1 invested, depending on the mix of infrastructure types.
“Government benefits from that increase to GDP through higher tax revenues – income tax, corporate tax and provincial sales tax – as well as from greater private investment and the creation of more jobs,” said Lorenc. “Those revenues support our social programs.”
Another side of smart debt is the higher revenues are also are used to manage the cost of borrowing.
That’s why the MHCA advocates strategic investment in horizontal infrastructure, making a priority of those routes that move people to jobs and products to market, thereby fuelling economic growth.
“The MHCA promotes a thoughtful, strategic approach to public infrastructure investment,” said Lorenc. “The provincial government needs to have a transparent asset-management plan that includes scheduled maintenance to prevent costly road reconstruction, and multi-year budgets that balance cost against the ability to finance.”
The MHCA has called for a working group to look into how infrastructure is funded now and how it should be funded in the future.
“We need policies tied to economic return and driven by a purpose,” said Lorenc. “A strategy such as this has been resisted by successive governments for too long. That is how debt rises and why we get no uptake on discussing the construction of transportation assets that can position Manitoba to compete vigorously for a higher global trade profile.”
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