Prioritizing in Times of Change

Last month, we spilled some ink about the federal budget, the new direction of federal finances, and the expected impact on local infrastructure. This month, we examine the issue from the other side – i.e. what should municipalities across Canada prioritize to take advantage of this new federal approach?

In short, the Prime Minister himself said it best: “We used to build things in this country. Over our history, we have shown that we can come together to build big infrastructure that ties us more closely together, from a railway that spanned this country to the Trans-Canada Highway to the St. Lawrence Seaway. It’s time to build again.”

Funding the construction of new infrastructure is one of the biggest net positive fiscal actions any government can take. Unlike operational spending, whose annual expenditures are necessary but not particularly productive, capital spending on building real things lasts for the lifetime of the infrastructure. Indeed, the government estimates that every $1 spent on infrastructure generates between $3 and $6 in economic activity, creating jobs and boosting productivity. This math is at the heart of the grand bargain the Prime Minister has struck in separating operational and capital spending and provides a clue to how municipal governments should respond.

The bottom line is, if it can be built, now is the time.

Whereas the previous Liberal government had a focus on social spending and mitigating climate change, this new government is likely to focus on putting concrete in the ground. In a departure from the Trudeau years, expect discussions around climate mitigating infrastructure to focus less on GHG emission reductions, and more on practical concerns around building sustainable homes and transit. Indeed, the Build Strong Communities Fund makes clear that local infrastructure will need to have some connection to expanding housing in order to be funded, rather than the emission reductions requirements local governments have worked hard to meet for a decade.

Although it is impossible to tell exactly where federal priorities will lie across the tenure of this government, the federal government is sending all the signals that they are serious about housing, transit, and local infrastructure that supports them. Local governments should start looking at what’s needed to build that new subdivision, whether it’s new water and wastewater infrastructure, water towers, roads, local transit expansions, or what have you. Feasibility studies for infrastructure projects that support housing will be essential to securing a tranche of the new funding, while creative and innovative approaches to construction are likely to get the attention of this government. Proving that your project is shovel ready shows the government that your municipality is ready to work as a partner, and gives the Prime Minister a political reason for buy-in.

One thing is true, however, no matter which style of leadership we see at the federal level, the feds will always rely on local expertise to get real things built. If they come with the funds and the plan, they will find plenty of dance partners

What do you think about the new federal priorities? How can your community pivot to meet the moment and get new local infrastructure built? Email us your thoughts at tyler@strategicsteps.ca.