Canada Infrastructure Bank
The Liberal party recognizes that lack of capital can present a significant barrier to municipalities and provinces in terms of infrastructure spending. Because they lack capital, they are unable to provide ‘matched funding’ and often cannot make use of federal funding. The Liberal party has promised to establish the Canadian Infrastructure Bank which will use the federal government’s strong credit rating to guarantee loans and small capital contributions so that other municipalities and provinces can make investments.
It is not immediately clear if this will solve long-term problems: cash-strapped municipalities and provinces will incur further debt if they wish to access federal funds, exacerbating their financial problems. If greater financial burdens are to be avoided, municipalities and provinces will have to make efficient spending choices that ensure long-term savings. If they make short-sighted investments now, upkeep and maintenance costs will skyrocket in the future and they will be even less able to afford quality infrastructure. However, this mechanism may allow municipalities to amortize infrastructure investments over the life-cycle of the project. Also, the federal government should work to mitigate this by making loan guarantees conditional on best practices for procurement, such as QBS.
ACEC will push for conditions on the loan guarantees in order to ensure effective, efficient spending by municipalities and provinces. These conditions should include best practices for procurement, such as the use of QBS. This will help to ensure the long term financial health of governments and continued investment in infrastructure.