Prime Minister Trudeau selling Canadians false bill of goods on infrastructure

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Appeared in the Winnipeg Free Press, May 19, 2017
Prime Minister Trudeau selling Canadians false bill of goods on infrastructure

You’d think that a prime minister would be intimately familiar with one of his government’s signature policy initiatives. However, regarding Ottawa’s multi-billion dollar infrastructure plan, a recent statement by Prime Minister Justin Trudeau suggests he’s detached from the details.

Here’s what he said in the House of Commons: “We’re going to continue to invest historic amounts in infrastructure that are going to help families get to and from work in a reasonable amount of time; back in time for their kids’ soccer games. We’re going to make the kind of investments that make a difference for small businesses being able to get their goods to market.”

Taken at face value many Canadians would have no qualms with such a statement, which suggests the government is undertaking a massive expansion and improvement of the country’s core infrastructure—roads, bridges, railways and ports. After all, infrastructure of this kind can improve the economy’s productive capacity by helping move people, goods, and resources more efficiently within Canada and to international markets.

But the reality of Ottawa’s infrastructure plan is quite different from what the prime minister suggests. Very little of the new “infrastructure” spending over the next decade is earmarked for projects that will actually improve Canada’s core infrastructure. In fact, a mere 10.6 per cent of the nearly $100 billion in new infrastructure spending is earmarked for trade and transportation.

Most of the spending is going to projects that many Canadians would never call “infrastructure.” For instance, 56.8 per cent of the nearly $100 billion spending is for so-called “green” and “social” infrastructure. These loosely defined categories amount to spending on projects such as parks, cultural institutions, and recreational centres.

Although some communities may appreciate these initiatives, let’s be clear—they won’t help move people or products. And there’s certainly no robust evidence that such spending will increase the economy’s long-term potential.

There is, however, a fundamental problem with Ottawa’s infrastructure spending plan. The government has included numerous items that most experts and many Canadians would not consider infrastructure. Indeed, it has broadened the term to include many services and activities, rending the definition of “infrastructure” unclear.

For instance, the government is calling the $7 billion over 10 years for subsidizing daycare “infrastructure.” Putting aside the pros and cons of daycare subsidies, it’s a stretch to call such spending “infrastructure.”

Or consider the $2.1 billion in spending over 10 years to reduce homelessness by tackling addiction and mental illness. This is a laudable goal no doubt, but by most reasonable standards, this is spending on social services—not infrastructure.

In addition, the Trudeau government’s infrastructure spending plan also includes $77 million to develop regulations and establish pilot programs related to the adoption of driverless cars and unmanned air vehicles. Again, regulating emerging technologies may or may not be a worthwhile pursuit, but it’s hard to argue such spending is “infrastructure.”

Even data collection and research is now considered infrastructure spending by the Trudeau government including $241 million over 11 years for a government agency to improve data collection and analytics related to housing. Another $50 million of supposed “infrastructure” spending is earmarked for a new government centre to collect and publically provide data on transportation in Canada.

Simply calling a project “infrastructure” does not automatically make it infrastructure nor does it mean it’s an economically worthwhile endeavor.

Prime Minister Trudeau has routinely referred to the government’s infrastructure plan as “historic,” and indeed the amount of proposed spending is large. But given that Canadians are footing the bill for this largely debt-financed spending, he should be clear about what the plan actually contains.