Studies on Canada’s Crucial Infrastructure Investment Needs

Canada needs to invest in its infrastructure NOW to prevent its economy from under-performing in the coming years.

Clear links are now being established between a country’s investment in infrastructure and its productivity and growth. According to a recent report commissioned by the Residential and Civil Construction Alliance of Ontario (RCCAO) earlier this month, Canada’s large infrastructure deficit is undermining our economy and overall quality of life.  Another report by the Conference Board of Canada, issued in March 2010, concluded that “for every dollar spent on public infrastructure in Ontario, $1.11 in real GDP was generated”.  As a result, both reports highlight the need for immediate action to improve our roads, bridges, sewers, transit systems, water lines, etc in order for our society to operate and grow.

Quick fixes will not suffice. It is now time for us to turn to long-term stable funding solutions and programs. Our upcoming Ontario Economic Summit (OES) will address this major issue through our panel entitled “Gateways to Growth: Ontario’s Transportation Infrastructure. We invite you to come share your ideas and recommendations to help us build and sustain a more prosperous and attractive province.

For more information on the Summit (including agenda and speakers) and to register, please visit: www.occ-oes.com.

Download the full RCCA report on “Public Infrastructure Underinvestment: The Risk to Canada’s Economic Growth”.

Download the full Conference Board of Canada report on “The Economic Impact of Public Infrastructure in Ontario”.

Innovation, Transportation and Red Tape are just a few of the topics that will be discussed at the upcoming Ontario Economic Summit (OES). Over the past 7 years, the OES has become known for its forward-thinking and the opportunities it creates for the growth in Ontario, as expressed by Ken Lewenza, National President, CAW – Canada:

“The development of successful and fair economic policies requires the participation of all stakeholders: business, government, labour, NGOs, and communities. The OES is one of the few venues where all these constituencies can get together for a frank and fruitful discussion of how to build a better economic future.”

The OES is on track to be another memorable and successful event. To find out more about what’s in store for this year’s Summit, check out the preliminary agenda online.

Register before July 30 to receive the early bird discount and save $400!

As transit networks across the province are in an ongoing cycle of unavoidable updates, expansions and repairs, funding sources are becoming more difficult to find. Transit City, a major Toronto transit project to expand and update the current rail system, is currently under discussion between municipal and provincial politicians and Metrolinx, all partners in this project, to finalize details on funding and a reasonable timeline for completion. The Province has committed $8.15 billion to this project which is slated to be completed over ten years, a revision to the original completion time of eight years. Transit infrastructure renewal is essential for the long term economic growth of Toronto – indeed many communities - and their ability to attract and retain business investment.

A report released on Wednesday by the Toronto Board of Trade outlines sixteen revenue generating ideas that could provide funding for transit within the City of Toronto, including parking surcharges, gas taxes and road tolls. The study estimates that the Greater Toronto and Hamilton Area (GTHA) will need about $2 billion annually to fund the Metrolinx vision.

Studies like this are a great start to finding solutions, but Toronto and other municipalities across Ontario will have to continue to take a serious look at how transit is funded across all networks and develop an innovative plan to generate necessary funding to support the ongoing needs of transit infrastructure. Recently at the Ontario Chamber of Commerce Annual General Meeting, delegates from across Ontario gave their support to the exploration of alternative funding sources in light of the enormous need for transit and transportation infrastructure. The OES will be taking a critical look at alternative forms of funding for infrastructure projects in the transportation of goods, as this is vital to the future success of business within the province.

What is the best way to fund transit infrastructure in the province? Share your ideas on how to fund this investment in the future of the province.

The following is a guest editorial by David Bradley, President of the Ontario Trucking Association.

After all the debate, the studies and public hearings, the future of the new, publicly-owned bridge at Windsor-Detroit currently rests with the Michigan Legislature. By June 1st, we will know whether the so-called DRIC (which stands for Detroit River International Crossing, though I think we should start calling it the Gordie Howe Bridge) project will be built, or whether it will be relegated to the backburner and, perhaps, never constructed – at least not in most of our lifetimes.

While it took a while, and we had our own political battles on this side of the border, all three Canadian levels of government are now solidly behind the project and the Province of Ontario has already embarked upon construction of the freeway linkages to the site of the new bridge.

Last year, the Michigan legislature enacted a law mandating the Michigan Department of Transportation (MDOT) to provide two things to state legislators by May 1, 2010 – (1) “Investment grade” traffic data; plus (2) Indications from the private sector of a serious interest in partnering to build all or parts of the DRIC project. Another complicating factor is that Michigan does not have the legislative authority to enter into public-private partnerships (P3s); so a legislative fix is needed for that as well. A successful P3 arrangement could remove any need for taxpayers’ money to be used to build the bridge. This point has been made by Canada’s transport minister, John Baird and by MDOT director Kirk Steudle. The law indicates the Michigan legislature intends to approve or disapprove the DRIC by June 1st. That is not a lot of time.

The people who do not want DRIC to proceed, point to the fact that the Ambassador Bridge folks say they want to twin their bridge. But, saying you want to build a second span and actually getting the approvals to do it, are two different things. As it stands now, the Ambassador Bridge does not have the approvals needed to proceed. If it were to file a serious application, it might get them, in time. Then again it might not.

For example, the US Coast Guard recently announced it was terminating the Ambassador Bridge’s permit application process. The reason given was that, despite several meetings between the Coast Guard and the Ambassador Bridge representatives, there had been no movement by the Bridge on a number of critical issues that the Coast Guard identified last June.

As a representative of private sector associations, in principle I have no problem with privately-owned infrastructure. If we were being offered two efficient crossings, I’d say the more the better. But that is not what the opponents of DRIC are proposing. Under their plan, the Ambassador Bridge would retain its monopoly as the sole bridge crossing between Windsor and Detroit. We do not support this situation. It would not resolve the problems associated with a lack of freeway-to-freeway access that currently exists. It would not provide the redundancy needed to keep the border open in the event of a security breach.

DRIC is the only actionable project at the moment. It must be built – for economic and for security reasons.

There is a lot at stake for Canada, for Ontario, for Michigan and for the United States. Sure, trade has fallen off due to the recession but it is beginning to shows signs of rebounding. We need to think ahead.

According to the US Final Environmental Impact Statement, DRIC will create more than 40,000 direct and indirect jobs during the construction period. It will bring billions of dollars in investment to the area and help secure the future prosperity and relevance of the region where there is perhaps more integration of manufacturing processes than anywhere else in the world.

During at speech given at an automotive industry dinner on March 15th in Michigan, Chrysler Group CEO, Sergio Marchionne, said his company “supports the partnership between the governments of Michigan and Ontario, as well as Canada and the United States, as they work toward securing a new gateway at Detroit/Windsor. The automotive industry continues to support the proposed Detroit River International Crossing, or DRIC. This proposed new crossing would add redundancy and unimpeded access from Ontario’s highways to Michigan’s interstates… In the coming months, the Michigan Legislature will consider a bill to authorize construction of the new DRIC bridge. It is my sincere hope that the Legislature will pass the bill by the June 1st deadline. 12 The need for an additional crossing to handle current and future trade flows is widely acknowledged and it is imperative that this new crossing be completed as soon as possible. It’s important to our collective future!”

Truckers agree. A recent survey of OTA trucking company members found that, while there are some improvements needed at all the major border crossings between Ontario and the US, by far the highest priority is the construction of a second bridge at Windsor-Detroit. 73% of respondents ranked Windsor-Detroit as the most important border crossing in terms of overall economic impact. Almost 60% said they expect that crossing to have the most delays and the most congestion when the economy recovers. When asked what border crossing ranked highest in terms of needed infrastructure improvement, 68% said Windsor-Detroit.

When asked what specific infrastructure improvements are most urgently required at Windsor-Detroit to avoid future congestion problems, 79% said a second bridge is required, compared to 14% who wanted additional FAST lanes and 4% who called for customs plaza improvements. When given a choice between DRIC and a second span at the Ambassador Bridge, again, the trucking industry was very clear in terms of which option it supports with 71% favouring the building of the DRIC crossing. 84% of respondents said that building a second, publicly-owned bridge at Windsor-Detroit is either extremely important or very important to the long-term economic well-being of Ontario. Given the amount of trade flowing between Michigan and Ontario by truck (some $26 billion even in last year’s down economy) the same is no doubt true for Michigan’s long-term economic prospects. In 2009, 83% of Michigan’s $14 billion in exports by all land modes to Ontario was moved by truck.

While up until now, the voice of the opponents of DRIC seems to have garnered most of the attention, given the economic enormity of this issue I expect things to heat up in the weeks ahead. Stay tuned.

Photo by:  mcclouds