The federal program of infrastructure has not had the training effect is predictable

Le programme fédéral en infrastructures n’a pas eu l’effet d’entraînement prévisible

Photo: Olivier Zuida The Duty
The major cities of Montreal, Toronto, Calgary, Ottawa and Edmonton have spent a billion more on their infrastructure than the index of parliamentary budget officer was in. In this photo, the work on the structure of the Turcot interchange.

A part of the infrastructure program, Ottawa, has least used, until now, to repair roads or install rails to metro to give a little bit of financial flexibility to provinces that needed them, ” concludes the Director parliamentary budget (DPB).

The “investment plan of Canada” the infrastructure of 188 billion over 12 years has not, until now, not had the knock-on effect on the provincial governments which would have normally been expected in such conditions, considers the DPB in a report released on Wednesday.

To understand, explain the authors of the report, the investment of the provinces in their infrastructure has definitely increased since the announcement of the federal program in 2016. But this increase remains short of what the experience and the science of economics would have hoped for billions offered by Ottawa. Amounting to a total of $ 85 billion in two years, the net expenditure in the capital of the provinces would incur a shortfall of 5.4 billion, which is almost the equivalent of the portion occupied by federal transfers ($5.9 billion).

This estimate does not come from the federal government, which does not have a tool with which to assess this kind of discrepancy between the expected impact and the actual impact of such a program, explains the DPB, which has had to develop its own “benchmark” in the field.

The gap between expectations and the financial effort is actually expended by the provinces suggests that these last have taken advantage of the situation to redirect to other priorities, postpone, or even cancel investments that otherwise they would have made in their infrastructure, say the authors of the report.

“The explanation that seems the most plausible explanation is that the budgetary difficulties most of the provinces are facing “, explained in a telephone interview with the Duty the DPB, Yves Giroux. “In this case, [the infrastructure program of Ottawa] was a relief to several governments that have been able to continue investment in their infrastructure, while reducing their own contribution, thanks to the federal effort. In other words, it is a program that gave oxygen financial the provinces relieving them of a certain burden. “

Jobs lost

Originally, the program of the liberal government of Justin Trudeau wanted a way to help economic growth in the long term, the transition to a green economy and the development of ” inclusive communities “. As often in such cases, it takes the form of contracts, where each government and each actor involved in a project agree to advance a portion of the required funding.

If the shortfall in the investment of the provinces, infrastructure is simply remained in their coffers, it could have removed approximately 0.15 % of economic growth in the first year alone and lost 7500 to 8100 new jobs, say the authors of the report. But if a portion of the shortfall has been invested elsewhere, these economic losses have been less than great.

The owners of a large part of the public infrastructure in Canada, the major cities of Toronto, Montreal, Calgary, Ottawa and Edmonton seem to have adopted a strategy opposite to that of the provincial governments, the report notes. Instead of investing less in their infrastructure for the past two years that the benchmark index of the DPB suggests, they have spent a billion more.

Quebec

In its report, the DPB does not stop at differences between the provinces. In a telephone interview, Yves Giroux observes, however, that “the province of Quebec has contributed, perhaps, more enthusiastic, or at least more proportionate to the federal program” than the other.

The office of the president of the treasury Board, Christian Dubé, responsible for the file, it said need more time to understand the methodology used by the DPB in its report before deciding on its conclusions. We took the opportunity to remind the government Legault will unveil next week its first québec infrastructures plan (PQI) for the period extending from 2019 to 2029 at the same time that his first budget.

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