Infrastructure Facts

The Case for Infrastructure Investment


Introduction

  • Historically, communities came into existence for three basic reasons which continue to be core areas of interest to government:
    • Security
    • Commerce
    • Infrastructure
  • Infrastructure is an investment that:
    • Enables economic activity
    • Connects people and communities
    • Ensures public health and safety
    • Protects the environment
  • Over the past 10 years, numerous studies have been made of the state of infrastructure investment in Canada and the impact of infrastructure on the economy.
  • Recent investments are welcome and helpful, but there is much more to do

The Evidence

Canadian Infrastructure Report Card (Highlights)
Federation of Canadian Municipalities et al., 2016

  • Approximately 30% of municipal infrastructure ranked “fair” to “very poor”
  • Replacement cost of these assets totals $905 billion nationally:
    • $330 billion for roads
    • $234 billion  for wastewater
    • $207 billion for drinking water
    • $134 billion for stormwater
  • Most infrastructure (even if in “good” to “very good” condition now) will require ever-increasing investment as it ages
  • These conclusions are likely optimistic since many municipalities do not have strong asset management processes and the state of much infrastructure is unknown

Levelling the Playing Field: Supporting Mineral Exploration and Mining in Remote and Northern Canada
Mining Association of Canada, Prospectors and Developers Association of Canada, Association of Consulting Engineering Companies – Canada et al., 2015

  • The high cost to explore and build new mines in remote and northern regions of Canada, largely as a result of a lack of critical infrastructure, is holding back exploration and mining development in Canada’s territories and northern regions of the provinces.
  • For base metal mines, capital costs were 2.5 times higher compared to an equivalent mine in a centrally-located jurisdiction
  • For gold mines, capital costs were doubly more expensive
  • For diamond mines in the territories, capital costs were 15-20% higher
  • 70% of the cost increase is directly related to the lack of infrastructure
  • Exploration costs varied directly with distance from transportation infrastructure, with the most remote project costing six times that of the least remote project

The Measures That Matter:
How Canada's Natural Resource Sector is Working to Protect the Environment

The Canadian Chamber of Commerce, 2014

The Foundations of a Competitive Canada:
The Need for Strategic Infrastructure Investment

The Canadian Chamber of Commerce, 2013

At the Intersection: The Case for Sustained and Strategic Public Infrastructure Investment
Canada West Foundation, 2013

  • Sustained investment is essential to maintaining Canada’s future prosperity and quality of life
  • Investments in infrastructure increase productivity
  • Highest economic and social returns on investment occur with strategic investment
  • The time to make critical investments in Canada’s infrastructure is NOW
  • Recommendations from At the Intersection: The Case for Sustained and Strategic Public Infrastructure Investment
    • Continue sustained and strategic investments
    • Give priority to infrastructure that enhances economic performance
    • Encourage innovative approaches to the design of public infrastructure
    • Invest in renewing existing infrastructure
    • Analyze and evaluate investments and apply lessons to future investments 

Lessons From the Recession and Financial Crisis
Conference Board of Canada, 2010

  • “Of all the fiscal stimulus measures, infrastructure spending has the largest impact on economic growth”
  • Every dollar spent on infrastructure increased GDP by as much $1.20

Public Infrastructure Underinvestment: The Risk to Canada’s Economic Growth 
Residential and Civil Construction Alliance of Ontario, 2010

  • Investment declined from 6% to 3% of GDP from 1960
  • Infrastructure underinvestment will cost the Canadian economy 1.1% of real GDP annually over the next 50 years 
  • Underinvestment will reduce the long-term profitability of Canadian businesses by an average of 20%

Mind the Gap: Finding Money to Upgrade Canada’s Aging Infrastructure
TD Bank Financial Group, 2004

  • 50% decline in annual government per capita capital investment (1962-2003) 
  • Investment shortfall calculated to be $125 billion in 2004
Search Member Firms Best Pratices Engineering Students The Source Newsletter