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Comments Effecting Canadian Events – Ken McGregor

Canada’s Infrastructure Debacle

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info2When PM Justin Trudeau said the Liberal government will not balance the books for three straight years opting to invest heavily in infrastructure to jump-start economic growth, there appears a good reason for this.  Looking at the world bank report gives some incite to their thinking. $5 trillion per year in global infrastructure is needed. I think all parties in election 2015 forgot to tell the public the true nature of the problem and failed miserably with any long term solutions. There is simply no way taxpayers can foot the Canadian infrastructure bill estimated somewhere between $350-400 billion dollars ( Municipal , provincial and federal). No way.

2012 World Bank report – “About US$ 5 trillion in global infrastructure investment is required per year to 2030 in various sectors; this investment must be greened to secure future growth.¬† A 2012¬† report highlighted that the planet is on track for a global average temperature rise of at least 4¬įC beyond pre-industrial levels, which would bring impacts detrimental to growth, including unprecedented heat waves, severe droughts and major floods”

infrastructure 2

Statistics Canada, Survey of Capital and Repair Expenditures. Core Public Infrastructure (Water, wastewater, recreation, culture, transit, roads etc.

Today municipalities own over 60% of the country’s infrastructure but collect just eight cents of every tax dollar paid in Canada, with the other 92 cents going to federal, provincial and territorial governments. Trudeau’s¬†is going to have to get serious¬†about finding the billions needed for our infrastructure shortfall, and pass It down the pipe to the municipalities. Mayors in Alberta, especially Edmonton and Calgary¬†are counting on it. In a medium-growth scenario, the Canadian population would grow from¬†35.2¬†million people in¬†2013¬†to¬†51.0¬†million people by¬†2063. Alberta’s population is estimated to¬†go from 4 million to¬†7.3 million by 2040 (25 years) with 75% residing in Edmonton and Calgary.¬† This is why the 2 mayors in Alberta¬†and other Canadian city mayors¬†need money to cover¬†the whopping billion dollar¬†infrastructure deficit.

Can we Raise The Cash?


Intergovernmental Transfer Payments, % of GDP, 1961- 2011. Conservative Government started increase in 2005 after a long decline starting end of Mulroney term and all through the Chretien and Martins years.


Hardly. Where are the 3 levels of government going to come up with $350-$500 billion? The federal infrastructure plan that was already in place under the previous government is a 10 year infrastructure plan that totals a measly $53 billion:

  • over $32¬†billion specifically available for municipalities through the renewed Gas Tax Fund and the incremental Goods and Services Tax Rebate for municipalities;
  • a $14-billion New Building Canada Fund, which will have $10¬†billion for provinces and territories, with $1¬†billion of that reserved for local projects in small communities of less than 100,000¬†people, and $4¬†billion for nationally-significant projects; and
  • $1.25¬†billion in new funding available through the P3 Canada Fund.
  • Existing programs will continue to provide another $6 Billion

Trudeau 2015 Campaign Plan promise is for meager $10 billion per year for the next 3 years paid for by running a deficit for a total infrastructure package of $125 billion over the next decade. This barely makes a dent.

Canada obviously needs a partner.¬†Wage earners¬†are already overburdened paying the 3 levels of government over 44% of their hard earned wages to tax. With prices rising on energy, food etc.¬†there is simply no money left to give in taxes.¬†Just taxing the rich¬†more¬†isn’t going to solve this infrastructure debacle. We need private investors.

One such private investor is Canada’s life and health insurance companies. They have over $5oo billion in long term assets that can be invested in Canadian infrastructure. Our government has to start talking to them on financing (public, private partnerships or P3s) smaller projects in cities where the infrastructure is need the most. We really have to get out of the box thinking that Government is better than private investors. We need private investment.

Infrastructure¬†isn’t the only Canadian debacle we have. Health care and education has also run amuck. Until we come to the realization that private funding is necessary our way of life is just going to deteriorate. We simply can’t fund everything by taxing.

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Written by Ken McGregor

December 1, 2015 at 5:02 pm

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