In the months to come, will federal and provincial governments recognize that public infrastructure investment is an extraordinarily useful tool for economic stimulation and has proven to be so in the wake of past national crises?
In the wake of the near collapse of parts of the banking system in 2008 the Stephen Harper government announced $182 billion in stimulus spending spread over the subsequent decade.
Other countries undertook similar spending programs — the George W. Bush administration spent over $700 billion.
So, the question is, will such stimulus investment happen post the COVID-19 crisis?
There have been some mixed signals.
Many in the construction sector were alarmed at the May cancellation of the Halton Region Consolidated Courthouse project, a major $300-million build.
A broad coalition of trades unions, contractor associations and municipalities decried the project being axed penning a strongly worded letter to Premier Doug Ford.
It was generally seen as a victim of the pandemic, but was the courthouse axed because other COVID spending drained the treasury, or because of other lessons learned as a result of the current crisis?
This was the question the Ontario Construction Consortium (OCC) posed to Ontario Finance Minister Rod Phillips in a phone meeting held on June 11.
We asked the minister if this heralded a wider tightening of the belt with respect to the province’s capital project spending. Minister Phillips said that we should not draw that conclusion.
He said the government had concluded that there are new methods of dealing with legal matters before the courts that did not require the construction of new brick and mortar facilities.
We take from this that Ontarians can expect to see more proceedings held remotely, through Zoom, Skype, email etc.
There is some indication this might be part of a government-wide initiative to modernize its hearing processes.
In another meeting, the OCC was told by Ontario’s integrity commissioner that his body was also looking at moving some of their investigation and hearing procedures over to a “remote” model.
Minister Phillips assured the OCC that he is looking at a good number of shovel-ready construction projects and that some were the subject of ongoing discussions with the federal government.
The minister also reminded us that in early June Minister of Transportation Caroline Mulroney had announced contracts being put out for the new Ontario Subway Line in Toronto.
So, there is no hesitation in this vital transit spending.
Add to this indications that the federal government is looking at shovel-ready projects that can be approved quickly and create immediate jobs.
Infrastructure Minister Catherine McKenna appears poised to put out billions of dollars in budgeted — but so far unspent — funds as a way to stimulate the economy.
In an April interview with the Globe and Mail, McKenna said she had been reading up on U.S. President Franklin Roosevelt’s New Deal, which included major infrastructure projects as a stimulus to pull the country out of the Great Depression of the 1930s.
She said the amount of spending on CERB and other payments directly to individuals will determine, in part, what she is able to spend.
But she indicated her priority will be speeding up the $180 billion in spending approved through 2028, but for the most part unspent as yet.
Why is this infrastructure spending so important?
One factor is the projected slowdown in residential construction.
Canada Mortgage and Housing Corporation is predicting that new housing starts could decline 50 per cent this year.
We need other projects for the tradespeople to move to.
A Broadbent Institute paper from 2015 concluded that 9.4 jobs are generated for every million dollars spent on infrastructure. It went on to say that the value of GDP generated per dollar of public infrastructure spending lies between $2.46 and $3.83.
And let us not forget all the benefits of this spending, obviously new, modern and improved public facilities.
But also the increased training of Canada’s future workforce.
We have a critical shortage of skilled tradespeople now. We cannot allow that situation to worsen because of underinvestment.
We must also keep the momentum going on raising the bar on health and safety.
The construction industry and government learned a lot through the current crisis.
The level of co-operation between Ontario Labour Minister Monte McNaughton, labour and management in advancing safety measures on jobsites is unprecedented and heartening.
Now is not the time to drop the ball on this progress.
So, this is smart, productive spending. We have never needed it more than we do now.
Phil Gillies is the executive director of the Ontario Construction Consortium. Send comments and Industry Perspectives op-ed ideas to editor@dailycommercialnews.com.
Recent Comments
comments for this post are closed