The federal government’s recent $2.1-billion commitment for the Trade and Transportation Corridors Initiative (TTCI) has construction industry stakeholders optimistic about the future of trade infrastructure across Canada, hoping it will help create jobs, grow the economy and generate funding for other infrastructure projects.
"We’re hoping it pays dividends," said John Gamble, president and CEO of the Association of Consulting Engineering Companies — Canada. "We certainly need to improve our trade infrastructure. Our ability to support other infrastructure assets depends on growing the economy and this is the sort of investment that will hopefully help us grow the larger economy."
The TTCI, announced by federal Transportation Minister Marc Garneau July 4 in Ottawa, targets reducing bottlenecks at the country’s major ports of entry, particularly those that are operating at capacity and are in need of expansion.
An important part of the TTCI is the merit-based National Trade Corridors Fund (NTCF), which will provide $2 billion over 11 years to strengthen Canada’s trade infrastructure including ports, waterways, airports, roads, bridges, border crossings, rail networks and the interconnectivity between them, states a release issued by Transport Canada.
As part of the launch for the fund, proponents are being invited to submit an expression of interest for funding until Sept. 5. The funding is expected to roll out early next year.
Bill Ferreira, vice-president of government relations and public affairs with the Canadian Construction Association (CCA), said the funding will provide a number of benefits, both short and long-term.
"It will promote additional construction, that’s the obvious immediate benefit," said Ferreira. "In the long-term, it generates the kind of revenue and royalties the governments need to continue to be able to fund other infrastructure investments but also the social safety net Canadians have come to depend on."
The CCA is also pleased the funding will be put towards priority projects that provide the greatest benefit from economic and efficiency perspectives.
"Instead of spreading the money around on a per capita basis, the funding is actually going to be dedicated to the projects that will generate the greatest returns for the country," said Ferreira.
The funds for the new initiative were set aside in this year’s budget and are part of $10.1 billion the federal government plans to spend over the next 11 years on trade and transportation corridor projects.
About half of the money, $5 billion, will flow to projects through the infrastructure bank. The bank, which is currently being created, will use federal cash to try and leverage private investment to help pay for projects that can generate revenue and provide a profit to private investors.
"I think potentially these types of projects could lend themselves to private investment," explained Gamble. "Private investment is obviously going to want some form of return on investment. Typically private investors will be looking for things that will have a revenue stream attached, whether it’s a public-private partnership, where you get an operations and maintenance concession, or it could be simply a situation where there is some sort of tolling. Or, if you’re dealing with airports, ports and harbours there might be some sort of fee attached to things that go in and out."
He added there are a lot of details that remain to be seen in terms of the infrastructure bank.
Another important element, Gamble added, is that Canada is a trading nation. Trade has been getting a lot of attention recently, especially with the North American Free Trade Agreement (NAFTA) subject to renegotiation.
"Whether we win, lose or draw on NAFTA renegotiations, we need to be more effective in being more efficient as an economy if we’re going to compete with the United States and hold our ground. Part of that is the regulatory regime but part of that is the ability to move people, goods and services freely and easily and I think this is a worthwhile investment that helps get us there," said Gamble.
Of the $2 billion, up to $400 million of the NTCF will be dedicated to support the movement of people and goods in Canada’s Northern territories.
In June, the Senate Committee on Banking, Trade and Commerce issued a report called National Corridor: Enhancing and Facilitating Commerce and Internal Trade.
Gamble said the report "slipped under the radar." It calls for construction of an east-west corridor through Canada’s northern regions and to establish a right-of-way that would accommodate highways, railways, pipelines as well as electrical transmission and communications networks.
"It’s not necessarily about the trade corridors in the sense of this particular project. What they are talking about is a cross-Canada trade corridor across the north to help have pre-cleared right of ways to allow infrastructure assets such as roads, pipelines, things of that nature, to be deployed in a pre-approved right-of-way to help with the cost and streamline the approvals for badly needed infrastructure in the north where a lot of what we trade, a lot of our assets that are necessary both domestically and internationally, are very difficult to get to and to get to market," said Gamble.
"That’s a separate initiative but noted in this one that there is some money set aside for northern infrastructure. Those challenges are unique and I would certainly recommend that the government look very closely at the senate report because I think it has a lot of merit."
Garneau also announced two additional initiatives under the TTCI, including $50 million over five years to work with key partners on new disruptive transportation technologies in order to update rules and regulations for Unmanned Aerial Vehicles and connected and automated vehicles; and $50 million over 11 years to launch a Trade and Transportation Information System, to be implemented by a new Canadian Centre on Transportation Data, to have access to information on transportation systems, the release concluded.