THE HILL TIMES POLICY BRIEFING INFRASTRUCTURE MONDAY, MARCH 23, 2015

Conservatives play Canada helping to ‘shell game’ strengthen public with infrastructure funds infrastructure by Rachel Aiello by Denis Lebel PAGE 33 PAGE 26 P3s are finding a place Opposition parties planning at national level to prioritize infrastructure by Denis Calnan platform planks PAGE 34 by Rachel Aiello PAGE 30 ‘We’ve had this lost generation of infrastructure’ Braid talks about by Denis Calnan climate change impacts PAGE 34 by Rachel Aiello PAGE 22 Questions remain on pension fund investments Wynne calls for renewed in infrastructure vision on infrastructure PAGE 32 PAGE 27 Liberals want to invest pension funds into Time to invest in infrastructure projects, infrastructure, says critics say it won’t work Liberal MP David McGuinty PAGE 29 PAGE 29 22 THE HILL TIMES, MONDAY, MARCH 23, 2015 INFRASTRUCTURE POLICY BRIEFING

Q&A PETER BRAID

is coming from. There are very spe- cifi c amounts as well that were part Important to invest in infrastructure of that announcement: $500-million for the repair and construction of on-reserve schools, and $452-mil- lion to repair and upgrade Cana- to ensure climate change impacts dian Armed Forces facilities. As I mentioned, it’s part of a previous commitment and announcement, with respect to the importance of mitigated, says Braid investing in infrastructure because it promotes economic growth, it creates jobs, and increases produc- Peter Braid, Parlia- tivity. And while we’re, through the New Building Canada Plan, assist- mentary secretary ing and supporting provinces and municipalities, it’s also important to for Infrastructure invest in federally-owned infra- and Communities, structure as well.” talks about the The Federation of Canadian Mu- nicipalities estimates that Canada’s government’s new municipal infrastructure defi cit is $123-billion and growing by $2-bil- Building Canada lion every year, how is the federal Plan, the provinces government addressing this? “We’re addressing it by making and municipalities’ record investments in infrastruc- ture. The New Building Canada infrastructure defi cit, Plan is the longest and the largest P3 initiatives, and investment in infrastructure in Canada’s history. We’re also assist- where the money for ing and supporting municipalities in provinces as a partner, so that the government’s they can invest in the infrastruc- $5.8-billion federal ture that they own. It’s important to highlight that since we took offi ce infrastructure prom- in 2006, as a government, Canada has consistently ranked at the top ises is coming from. of the list of G7 countries with re- spect to investments in infrastruc- BY RACHEL AIELLO ture as a percentage of GDP. And our, as a government, our average he federal government has annual investments in infrastruc- Tmade the connection between ture are three-times greater than the effects of climate change and Conservative MP Peter Braid, Parliamentary Secretary to Minister of Infrastructure Minister Denis Lebel, says ‘the New the previous Liberal government.” infrastructure damage through a Building Canada Plan is the longest and the largest investment in infrastructure in Canada’s history.’ The Hill Times portion of its “New Building Canada photograph by Steve Gerecke Provinces are investing a much Plan.” Operational for just under a larger share in maintaining and year, the initiative includes a disas- is represented by the New Build- “The lists of project priorities Again, provinces and municipalities improving public infrastructure, ter mitigation category that munic- ing Canada Plan. Under the New are being submitted as we speak own 95 per cent of the infrastructure but the federal government does ipalities and provinces can pitch to Building Canada Plan, we respect and we’re working closely with in Canada, the federal government benefi t from stable infrastructure in the federal government for more the jurisdiction of our partners, our partners to ensure that projects owns fi ve per cent. Canada. Ontario Premier Kathleen money to update or reinforce public the municipalities and provinces. are reviewed and announced as “It’s important that we take a Wynne has approached the federal infrastructure in order to prevent or And under most components of the quickly as possible, in fact the New leadership role, with respect to government about increasing the reduce the damages resulting from plan, it’s the role and responsibility Building Canada Plan has been renewing federally-owned infra- percentage of GDP the province natural hazards, including “events of the province to identify their open for business now for a year, structure as well. That money is gets for infrastructure, and I under- related to climate change.” infrastructure project priorities, so almost a year, and we have already coming from general revenues, it stand the government isn’t willing Including disaster mitigation as in many respects, under the pro- approved numerous projects across is booked and will be committed to accept that amount, but I’m won- a component of the New Building vincial components of the plan the the country, representing a total and will help to renew infrastruc- dering if the infrastructure partner- Canada Plan was “very purposely priorities will be driven by those estimated value of about $5-billion. ture at national historic sites, ship proposal would be something designed” to give “municipalities projects identifi ed by the provinces. They include, for example, the national parks, Canadian armed the government would consider if and provinces the opportunity to “There’s also a national infra- LRT extension in Edmonton, the forces facilities, border infrastruc- the percentage the province would submit projects which will miti- structure component, and those Scarborough subway extension in ture, federal buildings, research get was a lesser amount? gate the effects of climate change,” projects are determined on a Toronto, and the Brandon airport centres, federal heritage and mu- “Again, today we’re making said Conservative MP Peter Braid merit basis, and they will be more expansion in Manitoba. seum sites, Canadian coast guard record investments in infrastruc- (Kitchener-Waterloo, Ont.), Parlia- signifi cant projects on a national “It’s also important to remem- facilities, just to name a few.” ture. The New Building Canada mentary secretary to the Infra- scale. Outside the scope of the ber that provinces and munici- Plan is the largest and the longest structure Minister Denis Lebel, told New Building Canada Plan, as you palities own 95 per cent of the If this $5.8-billion is coming from in Canadian history, and it follows The Hill Times in an interview. know, we’re also in the process of infrastructure in Canada.” general revenue, doesn’t that the original Building Canada Plan, The Insurance Bureau of building a new Champlain Bridge have to be voted on? Wouldn’t which was established in 2007, Canada has said the cost of severe in Montreal, and a new Detroit In November, Prime Minister this amount of money have to be that was a seven-year, $33-billion weather damage in Canada is at river crossing as well.” Stephen Harper promised $5.8-bil- approved through a budget? plan. We consulted closely with an all-time high. The total damage lion over three years to spend on “The commitment is there for municipalities and provinces as we for 2013 was $3.2-billion and the What are you hearing from the aboriginal reserves, museums, federal infrastructure, and we will designed the new Building Can- Alberta fl oods caused more than provinces then? Is there one area research centres, parks, and ensure that we follow through on ada Plan. And the New Building $1.74-billion of that. These costs are of infrastructure needing atten- other federally-owned infrastruc- that commitment and spend in Canada Plan represents a longer set to rise, with estimates around tion that they’d like to see this ture. The government has said that these areas of federally-owned investment in terms of timeframe, $5-billion annually by 2020. money go towards? most of that $5.8-billion was new infrastructure.” now a decade long, more stable and This Q&A has been edited for “This speaks to one of the money that hadn’t previously been predictable funding, particularly clarity and style. important features of the New announced. It’s such a large chunk, Were these fi nancial commitments through the gas-tax fund, which Building Canada Plan because where did those funds come from? approved in a past budget? I’m our government has doubled, made What is the federal government’s the priorities of one province may “This announcement by the just curious about how it was permanent and is indexing moving top infrastructure priority this year? be different than another. In On- Prime Minister of the $5.8-billion that, if the government is going to forward. The Gas Tax fund provides “Well, it’s important to reinforce tario, for example, we understand in funding specifi cally for federal be committing this much money, a loan, provides $2-billion a year, that, as the federal government, we from the Province of Ontario that infrastructure, this will be part of our you’d think there would have to directly, to municipalities to help are making record investments in public transit is one of their pri- now $75-billion infrastructure invest- be some consensus or talk with them meet their own needs. So the infrastructure. We are in the early orities. That may not be a priority ments over the next decade. And the the rest of Parliamentarians about New Building Canada Plan is a phases of the most signifi cant in Prince Edward Island, so the $5.8-billion again, is over and above such a large chunk of money going longer-term commitment, is more investments in infrastructure in Ca- plan provides that fl exibility for the New Building Canada Plan of towards something? funding and provides more stability nadian history, $75-billion over the individual provinces to determine $53-billion. So this is specifi cally “We can follow up, in terms of next 10 years. Of which, $53-billion their own project priorities. for federally-owned infrastructure. exactly the envelope that the money Continued on page 24 When you choose VIA Rail for your business travel, you help reduce government expenses and create value for taxpayers. Plus, you maximize your productivity along the way. So get on board with train travel today.

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Q&A PETER BRAID Important to invest in infrastructure to ensure climate change impacts mitigated, says Braid Continued from page 22 screen. We think, where applicable, P3s have Okay, although we don’t know the number in the last little while have directly impact- a role to play in terms of the procurement of at this time, is the transfer of risk enough ed the infrastructure in Canada, so I’m and more predictability. So we’re delivering large-scale infrastructure projects and we of an incentive to have multiple major wondering, because large-scale spending what municipalities and provinces have asked strongly feel that there are many benefi ts to projects being developed using this meth- on infrastructure projects is on the rise, for. We’re making record investments, bal- P3s, including private-sector involvement, pri- od on the go at once? would a focus on more clean energy tech- ancing the budget and keeping taxes low and vate-sector sharing some of the risk of the proj- “There isn’t a fl ood of P3s today. … nology be a consideration the government those are our priorities.” ect, and, through very clearly defi ned service There is now in Canada, I think a very would make in terms of mitigating some standards, ensuring that large-scale projects strong track record with respect to P3s and of the costs that come from infrastructure So you would say that the amount you are are delivered on time and on budget. P3 procurements. The provinces of Ontario, damage caused by adverse weather? currently, and will continue to invest, is “P3s also, by their nature provide Alberta, and British Columbia, in particu- “There’s a recognition in the important fulfi lling what the provinces are asking for important investment vehicles for large lar, are very mature P3 jurisdictions. And role that infrastructure plays in preserving in terms of infrastructure investment? Canadian fi nancial institutions and for one of the important benefi ts of a P3 pro- and promoting our environment. Disaster “That’s right. And again, given that mu- pension funds who have long-term capital curement is that the private sector manag- mitigation is an eligible category under ev- nicipalities and provinces own 95 per cent requirements.” es the delivery of the project and guaran- ery component of the New Building Canada of the country’s infrastructure, it’s import- tees its delivery on-time and on budget.” Plan and that was very purposely designed ant that provinces manage, maintain, and Through this screening system, are more that way to give municipalities and provinc- renew their own infrastructure with their of them being suggested to become a P3 The federal Liberals have indicated that in- es the opportunity to submit projects, which own signifi cant investments, and where initiative? frastructure investment will be a key priority will mitigate the effects of climate change there is the federal government as a partner, “It’s still early phases. We’re not quite clos- in their election platform, and the FCM is under the New Building Canada Plan. to support those efforts and to also take ing out the fi rst year of a 10-year plan. I don’t pushing to make cities and municipal infra- “Separate from infrastructure, you a leadership role with respect to federal- have any specifi c statistics on increases in P3 structure a discussion all parties have during talked about the importance of investing ly-owned infrastructure.” applications, versus prior to the New Building the campaign. How will the Conservatives in renewable technologies and we’re doing Canada Plan. That said, municipalities and handle infrastructure on the campaign trail? that as a government under Sustainable Public-private partnerships (P3s) are provinces will be aware that any project that “Typical of other Liberal proposals, a pro- Development Technology Canada (SDTC), something this government has been sup- has a value of $100-million, or greater, will be posal on infrastructure is absent of any detail so we’re achieving both of those things.” portive of, but they have been criticized as subject to the P3 screen, and if the result of or substance. Our government is delivering coming in often overpriced and delayed. the P3 screen suggests that it’s an appropriate today. We’re making record investments and Would you make that connection? Those Through the PPP fund, any projects with P3 project, then that will become a require- those record investments will continue. You green-energy investments would reduce capital costs above $100-million will ment for federal involvement in the project. recognize the important role of investments the weather damage to infrastructure? be evaluated to see if a public-private And in the case of P3s, the federal involve- in infrastructure in promoting economic “Investments in renewable and green partnership would be the best route to go. ment will be 25 per cent, as opposed to the growth, creating jobs, and increasing pro- technologies are good for our environment Has this resulted in more infrastructure typical 33.3 per cent. We feel that P3s should ductivity. And that’s exactly why we’re work- and promote innovation, and create jobs. projects becoming joint ventures? be considered. They have an important role ing closely with our partners and rolling out In addition, it’s important that with infra- “We think, where applicable, larger-scale, to play. And when a project is procured, as a the new record investments under the New structure, we continue to make investments, more signifi cant infrastructure projects, that P3, it provides value to taxpayers, it allows the Building Canada Plan.” along with our partners to ensure that the the P3 formula should be considered. So under private sector to be involved and to share risk, impacts of climate change are mitigated. the New Building Canada Plan, any project and helps ensure that large, complex pro- You’ve said in the past that climate change There’s the mitigation aspect, which is that is submitted that has a value of $100-mil- grams are delivered on time and on budget. is connected to extreme weather events, addressed through infrastructure and the lion or greater will automatically receive a P3 These are signifi cant benefi ts.” and some of these extreme weather events new technology aspect addressed through SDTC. They’re complimentary.”

Has any of the $500-million promised for on-reserve school funding started fl owing? It was a 2015-16 promise. “That’s being delivered through Aborig- inal and Northern Affairs, that department, and in fact each one of those amounts under the federal envelope will be deliv- ered through their respective departments. Those amounts are set aside within the fi scal framework.”

Just to make sure I’ve got this right, the $5.8-billion that the on-reserve funding comes from, is part of the lump-sum depart- mental totals approved each year, but is be- ing moved from somewhere internally to go towards infrastructure spending instead? “So some of the federal funding, some of the $5.8-million will fl ow as early as this fi scal year, again it will depend on the department. So, for example, in the case of funding for national parks and historic ca- nals, that’s Environment Canada. There was some funding announced in budget 2014, but additional funding as part of the Prime Minister’s announcement in the fall is in- cremental to what was already announced for Environment Canada. So that would indicate that we would need to come to Parliament through the estimates process. So, in some cases, specifi c envelopes were already identifi ed in a previous budget, in other cases where the funding is incremen- tal then we will come to Parliament through the estimates process. But it will be under each departmental envelope.”

So this is because it’s rolling out over a number of years? “Yes, exactly.” [email protected] The Hill Times Nuclear Power Offers Ontario The Most Benefits

tonnes, which represents 80 percent $29 billion in direct investments in our Ontario’s nuclear advantage also less emissions than continuing to build province. The latter would mean 100,000 promises a bright future of innovation: intermittent wind generation backed up more person years of good paying powering zero-emission electric vehicles; by natural gas. employment opportunities, with many low-carbon electricity exports to our of these positions being in the advanced fossil fuel dependent neighbours; more Opponents like to characterize nuclear manufacturing sector. advances in nuclear medicine and power as an expensive source of materials sciences; and world-leading electricity generation. Expert analyses technology and service exports. show this to be incorrect from a number of perspectives. According to the Ontario Energy Board, the cost of electricity production in 2014 ranged from: 4.8 cents/kWh for hydroelectric, the cheapest; followed by nuclear at 6.0 cents/kWh; 12 cents for wind; 12.6 for By Don MacKinnon Nuclear – bioenergy; 13.4 cents for natural gas President (most sold at peak rates); and, solar at Power Workers’ Union 48.9 cents/kWh. Ontario’s While upfront costs can be high for the Today’s decision-makers are faced with refurbishment or building of new nuclear the challenges of sustaining and creating reactors, expenditures can be spread out Low-Carbon, jobs while tackling climate change. over decades of operation. This ensures Concurrently, energy security has assumed price stability, sustaining a competitive greater importance as developing advantage for our businesses and Affordable, economies compete for non-renewable, industries. The likelihood of some form of carbon-emitting fossil fuels. A cacophony carbon pricing further enhances nuclear’s of special interests advocating the merits advantage. A 2014 Intergovernmental Reliable, and benefits of their preferred energy Panel on Climate Change report indicated solution(s) add another layer of complexity. that nuclear power compares favourably with renewable energy sources and is In Ontario’s case, independent analyses Job Creating well ahead of fossil fuels on a carbon continue to show that nuclear power is emissions/kWh basis. For example, our province’s best option for delivering natural gas emits 29 times as much low-carbon, affordable, reliable electricity Electricity carbon as nuclear power. while generating high-value jobs and economic wealth. Ontario’s nuclear reactor fleet has been our province’s electricity workhorse, safely Workhorse Recently, the International Energy Agency and reliably providing 24/7 baseload concluded that nuclear power generation electricity for more than 45 years. In the capacity will need to double by 2050 for For more than 45 years, Ontario’s nuclear fleet has safely provided electricity last seven years, nuclear power has met the world to meet the international 2°C for our homes and businesses. more than half of Ontario’s electricity (3.6°F) warming goal. Annually, Canada’s Last year low-carbon nuclear power supplied 62% of our electricity, making demand, reaching a high of 62 percent it the largest contributor to reducing Ontario’s GHG emissions. nuclear reactors help avoid about 90 last year. million tonnes of greenhouse gas (GHG) It’s the second least expensive source, next to waterpower, and is the best way to generate 24/7 baseload electricity year after year. emissions, about the same as taking 81 Several economic studies show that Today, Ontario hosts a nuclear industry that supports: percent of Canada’s cars off the road. This additional investments in the province’s • Tens of thousands of high-value jobs contribution will decrease significantly nuclear fleet and industry will help • Hundreds of millions in R&D at our universities and colleges in 2020 when the 3,200 MW Pickering sustain and grow Canada’s $6 billion- • More than 160 nuclear supply chain companies in Ontario Nuclear Generating Station is scheduled per-year nuclear industry, most of which • Advances in nuclear medicine and materials sciences, and to cease operation. Any decrease in low- is located in Ontario. Ontario’s nuclear • World-leading technology and service exports. carbon nuclear generation translates into industry supports more than 160 supply Refurbishing Ontario’s nuclear fleet, and building new reactors as electricity increased reliance on high-carbon natural chain companies, 60,000 direct and demand grows, are the best ways to sustain and grow these benefits in the future. gas generation. indirect jobs and hundreds of millions per For more information please go to: www.pwu.ca year in Research and Development at our In contrast, an analysis by Strategic Policy province’s universities and colleges. Economics (Strapolec) underscores the FROM THE MEN AND WOMEN WHO HELP KEEP THE LIGHTS ON. GHG reductions that can be achieved by The earlier referenced Strapolec analysis refurbishing Ontario’s nuclear reactors also demonstrated that refurbishing and building new reactors at Ontario Ontario’s reactors and building two new Power Generation’s Darlington site. These ones would result in a $60 billion net investments would reduce incremental incremental benefit, including $27 billion GHG emissions after 2023 by 108 million in savings to electricity ratepayers and 26 THE HILL TIMES, MONDAY, MARCH 23, 2015 INFRASTRUCTURE

TRANSPORT Canada helping to strengthen public infrastructure will grow by $1.8-billion over the next The Harper government’s 10 years. All of this provides Canadian commitment to municipalities with long-term, fl exible, and predictable support for their local infrastructure represents infrastructure priorities. $75-billion over the next Under the Gas Tax Fund, close to $2-bil- lion was transferred to provinces and terri- decade. No other federal tories and made available to municipalities in 2014 alone. government has made The $14-billion New Building Canada these levels of investment. Fund includes two components: $4-bil- lion for projects of national signifi cance, and $10-billion in dedicated funding is available for provinces and territories for projects of national, regional and local signifi cance, which includes $1-billion set aside specifi cally for communities with INFRASTRUCTURE MINISTER fewer than 100,000 residents. DENIS LEBEL We are already upon our fi rst-year anni- versary of the launch of this program and so much has already been achieved. In fact, nvestments in modern and effi cient pub- projects representing over $5.5-billion have Ilic infrastructure across Canada create already been announced. jobs, promote economic growth, and pro- The Harper government’s commitment vide a high quality of life for all Canadians to enhancing Canada’s infrastructure has and their families. never been stronger. While we work with The Harper government’s commitment provinces and territories to identify and to infrastructure represents $75-billion fund projects under the New Building over the next decade. No other federal Canada Fund, existing programs under the government has made these levels of 2007 Building Canada Plan and other in- investment. frastructure programs continue to provide In fact, since 2006, Canada has consis- funding to eligible infrastructure projects tently led G7 countries in infrastructure across the country. This represents signifi - funding as a rate of GDP. cant funding under existing programs that Our infrastructure programs are will continue to fl ow to projects across the designed to meet the needs of municipal- country beyond this year. Thousands of ities, provinces, and territories—who own new and ongoing projects will be funded 95 per cent of all public infrastructure in through our programs this year. Canada—while achieving the best value The New Building Canada Plan is for taxpayers’ dollars. That is why all three about promoting productivity and eco- levels of government, and the private sec- nomic growth across the country and tor, have a role to play in supporting public it is designed to leverage creativity and infrastructure. Projects are cost-shared to innovation. That is why we are encourag- maximize federal investments and leverage ing the use of public-private partnerships greater funding from other sources, which (PPP) where and when it makes sense. The in turn will result in more projects being PPP business model is used around the funded, thus creating jobs and enhancing world to support large public infrastruc- our economic productivity. ture projects, and provide greater value for The New Building Canada Plan was de- money for taxpayers than the traditional signed with those principles in mind. It is procurement method. To further support the largest and longest infrastructure plan the development of large projects and this in Canadian history. business model, an additional $1.25-billion Let’s be clear, the plan is about stable, in funding is also being invested through predictable, long-term funding for the the New Building Canada Plan in the infrastructure needs of communities from P3Canada Fund. coast to coast to coast. There is no race on Our government’s unprecedented to see who can spend as much as possible infrastructure investments have led to real, this year, as some opposition members tangible infrastructure benefi ts that pro- seem to think it should be. vide jobs and help improve transportation, The plan includes two major programs: commerce and business across the country. the renewed federal Gas Tax Fund and the As we move forward with our infra- New Building Canada Fund. structure investments, we do so in tandem The federal Gas Tax Fund, which is with our partners to provide meaningful transferred twice a year to provinces and and lasting benefi ts for our communities territories, offers a fl exible approach throughout Canada. to infrastructure fi nancing, allowing The Harper government will continue to municipalities to choose and plan their support job creation, economic growth and own infrastructure priorities. Under the modern public infrastructure that contrib- leadership of Prime Minister Stephen ute to the quality of life of Canadians. Harper, our government has made signifi - Infrastructure and Communities Min- cant improvements to the federal Gas Tax ister Denis Lebel is also the minister for Fund. Over the years, we have extended Intergovernmental Affairs and the minister and doubled it from $1-billion to $2-bil- of Economic Development Agency of Can- lion per year, legislated it as a perma- ada for the Regions of Quebec. Mr. Lebel nent source of funding, expanded the represents Roberval-Lac-Saint-Jean, Que. eligible categories and indexed the fund [email protected] at two per cent per year, meaning that it The Hill Times THE HILL TIMES, MONDAY, MARCH 23, 2015 27 INFRASTRUCTURE POLICY BRIEFING

VISION Will our generation of leaders renew the vision and promise of a great nation?

vestments help create jobs, long-term growth government to be fully engaged—far more economic union for all Canadians. and responsible, sustainable development. than it is now. The infrastructure partner- In this federal election year, I am In the modern age, we will only get as ship could take the form of a new dedi- challenging the leaders of all the national far as our infrastructure will take us—both cated transfer, along the lines of current parties to come on board. literally and fi guratively. Provinces and transfers for health, education and social Each generation of a country’s leaders is ONTARIO PREMIER KATHLEEN WYNNE municipalities can’t carry that load alone. We services. Or it could be a new fi nancing called on to renew the promise and vision simply do not have the means. And existing mechanism that enables the federal gov- of a great nation. Pearson, Lesage, Robarts, federal infrastructure programs are not suf- ernment—working with the provinces—to Tommy Douglas and others heeded that call his fall, Canadians will head to the polls fi cient to meet the scope of the investments go to markets for large capital loans, all half a century ago, and our country is all the Tto cast their votes in the federal election. that are required to truly move us forward. the while running operational surpluses. richer for it. The issue is: Does our genera- As the election approaches, we should take That’s why I am proposing a new The mechanism is important, but what tion of leaders have the right stuff to build a moment to refl ect on our country’s past elect- Canadian infrastructure partnership—a is more important right now is that our the next stage of our history? ed leaders and one of their greatest accomplish- collaboration that has an explicit target of federal government and our provincial Kathleen Wynne is the premier of Ontario. ments: the creation of Canada’s social union. investing fi ve per cent of our GDP in infra- governments come together to tackle this [email protected] Half a century ago, these leaders—Lester structure renewal. We will need the federal challenge. To get on with building a true The Hill Times Pearson in Ottawa, Jean Lesage in Québec City, John Robarts at Queen’s Park and their colleagues in legislatures across Canada—came together in an unprecedented way. In a few short years, they created national medicare, the Canada and Quebec Pension Plans, and the huge expansion in post-secondary education. In true partnership—one in which respectful disagreements were navigable obstacles rather than insurmountable bar- riers—they transformed Canada. The social union they built may not be perfect, but it has served us well. It helped fuel the last 50 years of progress. And it has made Canada the envy of the world. Determining the political framework of Parliament won’t be the only outcome of this election—it will decide how our coun- try moves forward. I propose that today’s generation of lead- ers—in all parties and all legislatures—take inspiration from those giants of the 1960s. Just as they built a partnership to address the contemporary realities of their day, we need to do the same to help Canada meet the transformative challenges of today’s world: Infrastructure investments must honour history globalization, the rise of new economic superpowers, the accelerating revolution in and include investments in social infrastructure to technology, and climate change. The response 50 years ago was the social union. The response in 2015 must be support the aspirations of urban Aboriginal people. a true economic union. If our country is to succeed in this constant- In Ontario, over 84% of the Aboriginal population ly changing, hyper-competitive new world, all our governments need to be pulling in the same direction. Some key elements of the live in cities and other urban centres. economic union must be: the reduction of in- terprovincial barriers that hamper and infringe on trade within Canada; the establishment Since 2007, and the development of the Strategic Framework to End Violence Against Aboriginal Women in Ontario, the of a strategic, long-term national approach to training that helps ensure Canadians in every OFIFC has created Kanawayhitowin – Honour Life, End Violence, an education and public awareness campaign to end region have the skills they need to prosper in violence against Aboriginal women and girls. We have provided training on recognizing and responding to the signs of the workforce of today and tomorrow; and the abuse to 2,600 people – 1,064 are front line workers trained as facilitators and 1,536 are community members. Men, creation of a pan-Canadian energy strategy to encourage economic development and help us women, and young Aboriginal community leaders, participated in training with men representing 5% of the total number. make the most of our resources. And as part of that strategy a coordinated plan to reduce greenhouse gases, ensuring that our economic To respond to the need for services for Aboriginal men, the OFIFC has developed Kizhaay Anishanaabe Niin – I am a Kind growth is sustainable. Man, a culturally relevant initiative to encourage and challenge Aboriginal men and boys to actively speak out against all The most urgently needed element of forms of violence against women and to foster healthy relationships. the economic union is a long-term pan-Ca- nadian infrastructure strategy. As a nation—all orders of government The OFIFC has been partnering with all levels of government since 1971 and will continue to work with those willing to combined—we are investing annually between three and 3.5 per cent of our GDP in infrastruc- work with us to better the lives of urban Aboriginal people. To partner with the OFIFC, or to refer someone you know who ture. The government of Ontario, for example may wish to partner, please call Brandie Ferneyhough at (416) 956-7575. To learn more about the OFIFC, our 28 member is investing some $130-billion in transit, roads Friendship Centres throughout Ontario, and our programs and services, please visit our website at www.ofifc.org. and other infrastructure over the next 10 years. Other provinces are doing likewise. However, that’s barely enough to maintain the infrastructure we have, let alone make the kind of transformative investments we need to stay competitive in the global economy. To do that as a country, we would need to up the ante to closer to fi ve per cent of GDP every year. Other nations—Canada’s competitors— are making those kinds of infrastructure ZZZRȴIFRUJ investments. They understand that smart in- 28 THE HILL TIMES, MONDAY, MARCH 23, 2015 INFRASTRUCTURE POLICY BRIEFING

CITIES Nation building in the 21st Century: the promise of Canadian cities

and power outages, Canadians understand has been in decline throughout the past four communities in which we live. The Gas Tax the value of investing in infrastructure. decades. As a country, we hit our high water transfer that provides long-term, dedicated, But infrastructure, in other terms, is re- mark in the late 1950s at just over three per and predictable transfers to municipalities ally just about the kind of things most of us cent of GDP invested in infrastructure. By the that is indexed with infl ation was origi- wish for, and often need, to make life safer late 1990s, our public infrastructure was being nally championed by Jack Layton and the NDP MP MATTHEW KELLWAY and simpler. Infrastructure includes things cannibalized at the altar of austerity. NDP, and it remains a welcomed exception. that are often missing from our commu- The sporadic nature of infrastructure The antidote to this history and the nities yet ought to be there—a convenient spending, and the political opportunism way to meet the challenges in our future is he compulsive underinvestment in pub- and affordable way to travel, a recreation over decades, characterized the federal through more long-term and predictable, Tlic infrastructure by successive federal or community centre, fl ood protection mea- approach to infrastructure, remains to this depoliticized and stable, federal infrastruc- governments hits us in big ways and small. sures, or a tree canopy for our streets. day a constant. The “New Building Cana- ture funding. As a result of downloading From fl oods that cost billions, to the bus that Infrastructure is about our quality of life, da Plan” is as much smoke and as many and rapid urban growth, federal infrastruc- passes by already full, from gridlock and and our standard of living. Investment in vital mirrors as ever with just the slowest trickle ture assets account for just 10 per cent falling concrete, to boil-water advisories infrastructure, and in our standard of living, of funds escaping to hold together the of total public infrastructure assets. It is through infrastructure investment in urban Canada—where eighty percent of Canadi- ans live, play and work—that we can make the biggest difference to the standard of living and quality of life for Canadians. In the absence of meaningful federal gov- ernment participation in the urban affairs of Canada, our cities are failing to realize their full potential and Canada is falling short of our opportunity to become a cleaner, greener country with a greater prosperity more equally shared. The NDP believes that such cities are only possible through the active and collaborative participation of the federal government in city building. Missing from our cities is the kind of infrastructure necessary to ensure that the complementary objectives of economic competitiveness, environmental sustainabil- ity and social justice are realized. Through a Canadian Cities Framework that will set out agreed-upon goals, objectives and principles to guide federal investment in urban infrastructure, we will ensure that federal investment is integrated with locally determined infrastructure plans to realize the maximum benefi t for our cities. We know, for example, that federal investment in transit infrastructure is critical. Transit is not just about how we get around—it is a key to unlocking our cities’ potential through building and seamlessly connecting citizens to their cities, workers to their jobs and goods to their destina- tions. Canada is the only member of the G8 and the OECD that does not have a nation- al strategy for public transit. As a result, gridlock costs at least $6-billion each year 95% OF CANADIANS BELIEVE in the Greater Toronto and Hamilton area alone. PUBLIC TRANSIT IS IMPORTANT Transit is also key to climate change 95% OF CANADIANS BELIEVE mitigation, as is energy and energy FOR THEIR COMMUNITY effi ciency. Cities consume enormous PUBLIC TRANSIT IS IMPORTANT amounts of energy and buildings alone FOR THEIR COMMUNITY produce between 48 per cent and 70 per cent of greenhouse gas emissions CAN THEY in Canada’s six largest cities. Our cities offer a tremendous opportunity to reduce CAN THEY greenhouse gas emissions through clean energy production, low carbon design COUNT ON and energy-effi cient retrofi ts of our buildings. COUNT ON The world has changed dramatically over the last few decades and Canada is YOUR VOTE? no exception. Globally and nationally, cities have emerged as strategic plac- YOUR VOTE? es economically, environmentally and socially. Canada has not caught up with our urban reality and successive federal governments have failed to invest in the infrastructure necessary to respond to LET’S MOVE. CUTAACTU.CA and succeed in this reality. LET’S MOVE. CUTAACTU.CA NDP MP Matthew Kellway, his party’s infrastructure critic, represents Beach- es-East York, Ont. [email protected] The Hill Times THE HILL TIMES, MONDAY, MARCH 23, 2015 29 INFRASTRUCTURE POLICY BRIEFING

FUNDING

Investing in infrastructure will increase our productivity, reduce traffi c It’s time to invest in infrastructure gridlock, improve our quality of life, and make Canada a more attractive place to invest, creating jobs for middle class and sustainable country, while adapting to facilities in communities across Canada. families. Last year, the Conservatives the ongoing and future impacts of climate These cuts could not come at a worse At last year’s convention in Montreal, slashed infrastructure change. time. Canada’s economic growth and job Liberals passed a resolution calling for With help from Canadians, the Liberal creation continue to be well below our major infrastructure funding of up to one funding by nearly 90 per Party of Canada has identifi ed thousands potential, and unemployment is stubbornly per cent of GDP, and we are calling on cent. This political decision, of infrastructure projects that are in im- stuck around seven per cent. Finance Minister Joe Oliver to reverse the mediate need of funding. Sadly, last year According to the Canada West Foun- infrastructure cuts. made by the Conservatives the Conservatives slashed infrastructure dation, “Canada’s governments should not It’s time to invest in infrastructure and in an attempt to balance the funding by nearly 90 per cent. This political hesitate to maintain a high level of invest- generate growth that will benefi t Canada. decision, made by the Conservatives in ment in infrastructure. Sustained and stra- A Liberal government will invest in in- budget for the next election, an attempt to balance the budget for the tegic investment in public infrastructure is frastructure. In addition to signifi cant new next election, will do nothing to generate essential to Canada’s long-term economic direct investments, it will put in place inno- will do nothing to generate economic growth or help middle-class growth and is critical to the quality of life vative means to fund large infrastructure economic growth or help families. enjoyed by Canadians.” projects that are essential to our long-term Investments in public infrastructure A properly funded infrastructure pro- economic growth. middle-class families. are the single most cost-effective way for gram would not only help create growth to- We will focus on public transit, because the federal government to help drive job day; it would lay the foundation for greater there needs to be an effective alternative to creation and growth. So why have the Con- future prosperity. Effectively executed, driving alone, on increasing the densities servatives slashed new spending for the the dividends would be ongoing for years of cities, and on reducing greenhouse gas biggest federal infrastructure fund? to come. The provinces and territories all emissions. The old Building Canada Fund had agree. Municipalities and communities A Liberal government will also re- grown to about $1.6-billion a year for agree. The Canadian Chamber of Com- instate the Labour Sponsored Venture LIBERAL MP DAVID MCGUINTY community infrastructure projects across merce agrees. The only partner offside is Capital Corporation (LSVCC) tax credit, the country. But now, the funding has the Conservative government in Ottawa. which is being phased out by the Harper dropped off a cliff, falling by close to 90 The federal government’s own analysis Conservatives. The LSVCC tax credit anadian communities are in urgent per cent to just $210-million per year, in the Department of Finance’s “Canada’s helps Canadian workers save for their Cneed of infrastructure investment. The starving municipalities of urgently need- Economic Action Plan: A Seventh Report retirement, while allowing labour funds Liberal caucus is calling on the Harper ed federal support. Funding will not re- to Canadians,” estimated that in the short- to make signifi cant investments in small government to immediately end irresponsi- cover for fi ve years, punted into political term, the economic multiplier effect of and medium enterprises, as well as infra- ble funding cuts. never-never land. public infrastructure spending is 1.60. structure projects. This Conservative government has ab- This political decision will do nothing to Instead of cutting the Building Canada Liberal MP David McGuinty, who rep- dicated leadership on sustainable munici- generate economic growth or help middle Fund to help conjure up a surplus in time resents Ottawa South, Ont., is his party’s pal infrastructure. As such, our cities and class families. In addition, the Conserva- for the next election, the Conservative gov- transport, infrastructure and communities communities have been forced to pick up tives are also blocking the fund from being ernment should be accelerating infrastruc- critic. the slack, making critical contributions to used to build new recreation, cultural and ture investments to meaningfully boost our [email protected] ensure that Canada becomes a more green sport facilities. That means no help to build economy today—and tomorrow. The Hill Times

Why does Pourquoi infrastructure l’infrastructure need to be an doit-elle être un election issue? enjeu électoral?

Infrastructure is a core responsibility L’infrastructure étant une responsabilité of government and decisive leadership is fondamentale du gouvernement, il nous faut needed in 2015 and onward. un leadership décisif en 2015 et pour l’avenir. Infrastructure grows the economy, L’infrastructure est un moteur de notre croissance strengthens communities and protects économique. Elle renforce nos collectivités, elle the environment. It creates jobs protège l’environnement, elle crée des emplois, et and prosperity. elle contribue à notre prospérité. Sustained, predictable infrastructure Des investissements soutenus et prévisibles investment makes good business sense dans l’infrastructure assurent un excellent for governments, taxpayers and rendement pour les gouvernements, les all Canadians. contribuables et l’ensemble des Canadiens. Investment in infrastructure is Investir dans notre infrastructure, an investment in our prosperity. c’est investir dans notre prospérité.

#VoteInfrastructure #VotezInfrastructure WWW.ACEC.CA • @ACECCanada WWW.ACEC.CA • @ACECCanada 30 THE HILL TIMES, MONDAY, MARCH 23, 2015 INFRASTRUCTURE POLICY BRIEFING

KATHLEEN WYNNE’S PROPOSAL Opposition parties planning to prioritize infrastructure platform planks Both the federal Liberals and NDP are open to a national infrastructure strategy.

By Rachel aiello

oth the federal Liberals and BNDP have indicated their in- terest in adopting Ontario Premier Kathleen Wynne’s multi-billion national infrastructure partnership proposal. In interviews with The Hill Times, New Democrat urban affairs critic Matthew Kellway (Beaches-East York, Ont.) and Liberal transporta- tion, infrastructure and communities critic Dalton McGuinty (Ottawa South, Ont.) said that although the logistics still need to be worked out, in essence what Premier Wynne has called for aligns with their parties’ Ontario Premier Kathleen Wynne. Both the federal Liberals and NDP have indicated their interest in adopting Ms. Wynne’s multi-billion national infrastructure visions for Canada if they were to partnership proposal. The Hill Times photograph by Jake Wright form government after the next federal election. urban agenda that would include but said he wasn’t able to give said it’s “encouraging” to hear federal lion a year to communities across During a speech in January, increased funding for public specifics because the party isn’t parties discuss the serious infrastruc- Canada, and has been indexed to steps away from Parliament Hill at transportation, explore solutions prepared to release that portion ture needs in Canada. grow at two per cent annually. a Canada 2020 luncheon event, the to decrease commuting time, and of their platform, in lieu of not “Municipalities of all sizes, “We’re delivering what munici- premier challenged all federal par- appoint a federal minister of ur- knowing what state the govern- big cities, and smaller rural palities and provinces have asked ties to step up and make infrastruc- ban affairs and social housing. ments finances are in, but said municipalities, need predictable, for,” Mr. Braid said. ture a key election issue in 2015. Mr. Kellway told The Hill there are “hundreds” of measures long-term, dedicated funding. [email protected] (She does so in this week’s issue of Times that, although details like that could be taken. We need to move away from The Hill Times as well.) Ms. Wynne what would count as infrastruc- “We’re going to work with the project-by-project Band-Aid pitched a pan-Canadian infrastruc- ture spending, and how the share the provinces and we’re going to approach to infrastructure, when INFRASTRUCTURE ture partnership that would make a of the extra money would be ascertain how we can best move municipalities need to plan further commitment from all levels divided still need to be worked forward together, because we’re 10-15 years into the future for THE CONDITION + of government to collaborate in out, the fundamental proposal “is all in this together and were go- everything from wastewater to making an increased investment in a good one.” ing to give credit to the provinces transit. We’ve got to develop real, COST OF infrastructure renewal. “Certainly the federal govern- that have taken action and we’re lasting partnerships between all REPAIRING Currently, Ms. Wynne projects ment ought to be doing more to going to learn from those provin- levels of government that focus Canadian investment in infrastruc- invest in infrastructure at sub-na- cial examples.” on building the economy and CANADIAN ture is between three per cent and tional levels of government,” Mr. Premier Wynne’s office wasn’t improving the quality of life of all INFRASTRUCTURE 3.5 per cent of the country’s GDP Kellway said. able to provide comment on the Canadians,” he said in an email to annually, or around $64-billion. He said part of this would parties’ indication that they’d be The Hill Times. Her vision would have that amount require establishing each level of on board with the pan-Canadi- Mr. Woodside said it’s import- increased by about $27-billion, or government’s roles and respon- an infrastructure partnership. ant to be able to fix Canada’s • Consultation on the 2015 Canadian Infrastructure five per cent overall of Canada’s sibilities, “to ensure the right But press secretary Lyndsay aging infrastructure as quickly as Report Card closed recently, and the updated GDP, to around $91-billion. She amount is going to the right proj- Miller pointed to a remark the possible, and called holding off numbers will be reported this fall, but as a reminder, offered possible options on how ects across the country.” He said premier made during her media on it bad economic planning. this is what the last Canadian Infrastructure Report it’s time for the provinces and the availability following the Jan. “You can always wait till next the federal government could boost Card data from 2012 showed about infrastructure in federal government to have a seri- 20 announcement in which she year to fix your roof but eventually its involvement, either through a cities and towns across Canada: new dedicated transfer like those ous conversation about investing said that, although she hasn’t it’s going to leak and then very that exist for health and education on where Canadians are living, had direct conversations with Mr. soon you have a very expensive • 30% of municipal infrastructure is assessed currently, or it could be a new travelling, and working. Trudeau or Mr. Mulcair about this problem on your hands. … Reliable as between fair and very poor, and that many funding system allowing the prov- “Until there is a collaborative economic union, because Can- funding will help municipalities to municipalities lack the capacity to manage their inces, with the federal government, way, then we’re a bit stuck. You ada is on the verge of a federal get ahead of this deficit cycle and infrastructure. seeking large capital loans. get Premier Wynne at the Council election, “this is the time for all save money,” Mr. Woodside said. In order to achieve this, Ms. of the Federation saying, ‘This is of us to be thinking about: What At the time of the announce- • 52.6% of municipal roads require attention, Wynne said the federal govern- what we need,’ and, of course, you is it that’s needed? What is the ment, the federal Conservatives showing signs of deterioration, and some elements ment needs to be more engaged have deaf ears with the Harper transformation that we need in said Ontario has already received exhibit significant deficiencies. A total 20.6 per cent than it has been, and that because government on the other side,” order to be able to continue to be “unprecedented” investments in of roads were considered to be in poor, to very poor the federal books are nearly Mr. Kellway said. a leading nation? … Part of that infrastructure, and indicated zero condition. Liberal Leader Justin Trudeau is making sure that we have the interest in the premier’s proposal. balanced, now is the best time to • To repair all the roads up to a good standard would (Papineau, Que.) has also said right partnerships among the When The Hill Times asked make this commitment. She said cost $91.1-billion. in her speech that the levels of infrastructure spending will be a levels of government.” Infrastructure Parliamentary Sec- funding now are “barely enough priority. During a February address Ms. Wynne said at the time of retary Peter Braid (Kitchener-Wa- • Replacement costs to bring the infrastructure up to to maintain the infrastructure we to the Montreal Board of Trade, Mr. the announcement that the real- terloo, Ont.) whether the pan-Cana- a good condition: have, let alone make the kind of Trudeau said that a Liberal govern- ity of the state of infrastructure dian approach would be something • Drinking Water: $2,082 per household in Canada transformative investments we ment would add new investments across Canada today is known, the government would consider need to stay competitive in the to infrastructure projects and and doesn’t require further study. if the percentage of GDP being Wastewater: $3,136 per household in Canada global economy.” would focus on public transporta- Instead, she called for “large- pooled was less, Mr. Braid said Storm Water: $1,270 per household in Canada Last week, NDP Leader Tom tion as an important alternative. scale, sustained, coordinated and the New Building Canada Plan is Municipal Roads: $7,325 per household in Canada Mulcair (Outremont, Que.) was in Mr. McGuinty told The Hill strategically-wise” investments. enough of a long-term commitment Toronto to announce his party’s Times that his party is “absolute- The Federation of Canadian Mu- and pointed to the already doubled plans to push forward on an ly” open to Ms. Wynne’s proposal, nicipalities President Brad Woodside Gas Tax Fund that provides $2-bil- Source: The Canadian Infrastructure Report Card. En choisissant VIA Rail pour vos voyages d’affaires, vous aidez le gouvernement à réduire ses dépenses et permettez aux contribuables d’économiser. De plus, vous maximisez votre productivité. N’attendez plus, partez en train dès aujourd’hui !

Liaison Nombre Distance Temps productif Temps non Coût Coût du voyage Économies pour de départs en train productif du voyage en train (à partir le contribuable par jour en voiture* en voiture** de seulement) (voyage en train)***

Ottawa Toronto Jusqu’à 16 450 km 3 h 51 min 4 h 34 min 467 $ 44 $1 423 $

Ottawa Montréal Jusqu’à 14 198 km 1 h 49 min 2 h 27 min 227 $ 33 $1 194 $

Ottawa Québec 1 482 km 5 h 25 min 4 h 39 min 488 $ 55 $1 433 $

Toronto Montréal Jusqu’à 18 541 km 4 h 32 min 5 h 30 min 562 $ 44 $1 518 $

1 Les employés du gouvernement du Canada profitent d’un rabais de 10 % sur les meilleurs tarifs pour tous les trains et classes de VIA Rail Canada. Valable si vous voyagez par affaires ou pour le plaisir. Des conditions s’appliquent. Pour plus de renseignements, communiquez avec les services de TPSGC. * 30 minutes ont été ajoutées au temps total du voyage en voiture afin d’inclure les retards dus au trafic et au mauvais temps. ** Le coût du voyage en voiture est calculé selon la formule suivante : (Taux de 0,55 $/km établi par le Conseil du trésor pour l’Ontario pour une voiture conduite par un représentant du gouvernement X distance parcourue) = coût en $ du voyage en voiture + (taux horaire moyen d’un employé gouvernemental de 48 $/h selon un salaire de 100 000 $ par année, y compris les avantages sociaux X durée du voyage) = coût total en $ pour le contribuable. *** L’économie réalisée par le contribuable en voyageant en train est calculée selon la formule suivante : Coût du voyage en voiture – coût du voyage en train = économies pour le contribuable.

MC Marque de commerce propriété de VIA Rail Canada inc. 32 THE HILL TIMES, MONDAY, MARCH 23, 2015 INFRASTRUCTURE POLICY BRIEFING

PENSION FUND INVESTMENT Pension fund investments in infrastructure: important questions remain

BY CHRISTOPHER STONEY AND BYOUNGJUN PARK why they should not constitute the future of whether alternative fi nancing of infrastruc- suggests there is considerable potential infrastructure fi nancing? What risks do we ture, such as pension fund investment, con- for mutual, long-term benefi ts to accrue. he idea of fi nancing infrastructure projects need to consider? stitutes a more cost-effective approach than However, as with any form of infrastruc- Tby encouraging pension funds investment First, is it possible for infrastructure public fi nancing, as is often claimed. Our ture funding, such arrangements inevita- has offi cially arrived on the Canadian political projects to provide a suffi cient level of public experience in Canada of fi nancing arrange- bly involve trade-offs and we would urge agenda. In January 2015, the government of benefi t if they are overseen by entities whose ments involving pension funds have usually policy-makers to undertake due diligence Quebec reached an agreement with the prov- primary interest and indeed obligation is made use of the public-private partnership in serving and protecting the public inter- ince’s public pension fund Caisse de dépôt et to maximize the rate of return for pension (PPP) model in order to balance risks and est. Decisions about when and how to use placement to build two new transit infrastruc- funds? This is particularly relevant in the provide public oversight. Public-private pension funds in the provision of infra- ture projects worth $5-billion, with the Caisse Caisse model where the pension fund would partnerships are attractive to many politi- structure should be evidence-based and in- assuming almost all of the fi nancial under- gain ownership and greater control of the cians because they are seen to reduce risk, dependently assessed, and transparent and taking in return for ownership and control of infrastructure. Pension funds have a duty spread costs out over the lifetime of the open to public scrutiny and review. Failure the assets. One week later, the federal Liberal to select projects based on rates of return asset and offer better value-for-money than to adhere to principles of good governance Party’s fi nance critic Scott Brison suggested on investment rather than public need. It is publicly funded projects. However, recent will increase the risks of political interfer- that the party’s platform on infrastructure the role of governments to address genuine reports from the offi ces of the auditor ence, excess profi ts and distorted priorities policy will include a commitment to explore public interest and provide public goods general have again raised serious concerns that will quickly undermine the effective- partnering with pension fund investors and and governments are therefore responsible about such claims. In October 2014, the au- ness of the funding model and erode public added that Quebec’s Caisse agreement is “one for ensuring that the infrastructure projects ditor general of British Columbia stated that confi dence and support. If pension funds of the models that we ought to consider.” selected place public need ahead of profi tabil- the borrowing cost for PPPs was 88 per cent are to provide an important and reliable It is not diffi cult to see why the Liberals fi nd ity. If infrastructure projects are to be selected higher than the public-sector equivalent and source of infrastructure funding, they the idea attractive. Pension fund investment in by pension fund investors this could seriously this resulted in $2.3-billion additional debt. will require appropriate regulation and major infrastructure projects is well developed distort decisions about where and what type The auditor general of Ontario also re- oversight in addition to predictable and in countries around the world, including the of infrastructure is built. Typically, pension ported that fi nancing the PPP projects cost attractive rates of return. U.K. and Australia, and it offers the potential of fund investment involves projects that can $8-billion more to the taxpayers than the Dr. Christopher Stoney is associate a win-win scenario in which communities ben- generate revenues through user fees such as traditional fi nancing model would have. professor in the School of Public Policy efi t from much-needed infrastructure projects, toll roads, but not all infrastructure projects Overall, it is too soon to make a case and Administration (SPPA) at Carleton pension funds secure stable long-term returns can be monetized in these ways and most for or against the use of pension funds for University. Byoungjun Park is a PhD can- on their investments and governments get to generate losses rather than profi ts. Would public infrastructure. Each project should didate, also in the SPPA, and together they build fl agship projects such as public transit these projects be overlooked by politicians in be analyzed on its merits, rather than on are researching the use of pension fund or bridges without adding signifi cant budget favour of revenue-generating infrastructure ideological conviction or political expedi- investments in infrastructure in Canada pressures. If pension funds can provide such that would attract pension funds to invest? ence. Our ongoing research into the use of and internationally. benefi ts for stakeholders, are there reasons Second, governments need to establish pension fund investments in infrastructure The Hill Times Successful Companies Begin With Successful Leaders. Give Your Leaders the Skills They Need to Succeed

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GOVERNMENT SPENDING Conservatives play ‘shell game’ with infrastructure funds government is calling “The New also included in the announcement This year the Building Canada Plan” that totals was the pre-promised $500-million government plans to $53-billion over 10 years. This plan allocated to the construction of includes $32.2-billion that comes on-reserve schools. spend $142-million of from existing legislated funding In an interview with The Hill through the Gas Tax Fund, and the Times, Peter Braid (Kitchen- the new $14-billion Goods and Services Tax Rebate for er-Waterloo, Ont.), Parliamentary Building Canada Fund. Municipalities; $6-billion in federal secretary to the Infrastructure support to provinces, territories Minister Denis Lebel (Roberval- By Rachel aiello and municipalities under “current Lac-Saint-Jean, Que.), had a hard infrastructure programs;” and time explaining where exactly the he federal government is trum- $15.25-billion in actually “new” addi- $5.8-billion would be coming from. Tpeting its record investments in tional program funding, comprised Reading from a file of papers infrastructure, but it’s only planning of the $14-billion for the NBCF, and in front of him, Mr. Braid said the on spending one per cent of its $1.25-billion for the P3 Canada Fund. money comes from “general reve- $14-million “New Building Canada Mr. Kellway said although the nue” envelopes within the depart- Fund” this year and opposition crit- government has been creating ments responsible for the area of ics are calling it a “shell game.” and announcing bigger funds than infrastructure, so the $500-million According to the federal there have been for some time, it’s for on-reserve schools would be government’s main spending spending very little of the money. coming through the Department of estimates for 2015-16, Infrastruc- “It’s all a bit of a shell game, Aboriginal Affairs. The money set ture Canada has plans to spend and it has been that way under to flow this fiscal year would have $142-million of the government’s successive federal governments been included in the 2014 budget, NDP MP Matthew Kellway: ‘They say well, ‘We’ve got the largest fund ever New Building Canada Fund for a long, long time. … We have while any further spending would for infrastructure in Canadian history,’ that they’re not spending.’ The Hill Times (NBCF). The $14-billion fund for a government that says they’re be coming for votes in Parliament photographs by Jake Wright additional infrastructure money creating a $14-billion fund for in future budgets, but will be “over to support projects of “national, national, provincial and munici- and above” the existing $53-billion regional, and local significance” pal infrastructure over the next 10 package of infrastructure money. was first announced in April of years and then don’t spend any of “The commitment is there for last year, and is to be spent over it,” Mr. Kellway said. federal infrastructure, and we will 10 years between 2014 and 2024. “And so the politicization of ensure that we follow through on The $14-billion, which prov- this funding continues and what it that commitment and spend in inces and municipalities can doesn’t do is it doesn’t address the these areas of federally-owned apply for, has been broken down needs of cities, which is for long- infrastructure,” he said. into three separate categories: term predictable, stable, and depoliti- Although Mr. Kellway said he $4-billion for national projects, cized funding,” said Mr. Kellway. didn’t want to “minimize the spend- $9-billion for regional infrastruc- Liberal MP David McGuinty ing they’re doing under that [$5.8-bil- ture, and $1-billion of community (Ottawa South, Ont.), his party’s lion],” he said it’s “mostly about funding. Nationally, in the fiscal transportation, infrastructure and repair and not actually moving the year 2015-16, the government communities critic, said the Con- country forward or building the kind plans to spend $15-million of the servatives won’t actually be able to of infrastructure that we need.” $4-billion. The provincial and afford to spend the multi-billions Mr. McGuinty said it sounded territorial and regional compo- they’re promising now, for a few to him like the government was nent will be getting $114.5-million years, because of the government’s “bobbing and weaving” and having this year of the $9-billion. And the “fixation” with eliminating the to pretend that all the money is small communities fund is getting deficit and following through on the available, when it isn’t really. “They $12.7-million of its $1-billion. $2.2-billion income splitting promise. might try to deny it but the PBO and NDP MP Matthew Kellway “Everything is being squeezed the Library of Parliament have pored (Beaches-East York, Ont.), his par- … that’s the truth of the matter, over their infrastructure spending ty’s urban affairs critic, said the the Federation of Canadian Mu- and they are cutting, from one year Parliamentary Secretary Peter Braid: ‘The commitment is there for federal limited spending is not enough. nicipalities knows it, the mayors, to the next,” he told The Hill Times. infrastructure and we will ensure that we follow through on that commitment “We have, at the urban level, and the municipalities and the In defence of its spending levels and spend in these areas of federally-owned infrastructure.’ an infrastructure deficit of reeves, all the good people run- the government points to the percent- $172-billion and, so clearly, a ning our rural and urban settings, age of infrastructure it actually owns. commitment of $140-million over they know it, the provinces all “Given that municipalities the next year is insufficient and know it, and so it’s basically a big and provinces own 95 per cent of doesn’t make the kinds of invest- shell game,” Mr. McGuinty said in the country’s infrastructure, it’s ments required in public transit an interview with The Hill Times. important that provinces manage, in cities across this country, in In addition to the New Building maintain and renew their own in- housing, or even just in the basic Canada Fund, the government an- frastructure with their own signifi- hard infrastructure required to nounced in November an additional cant investments,” Mr. Braid said. keep cities working,” he told The $5.8-billion in investments specifical- Because of this “sucking and Hill Times in an interview. ly for federally owned infrastructure, blowing,” of announcing the If the fund were to be doled but both Mr. McGuinty and Mr. government’s biggest-ever funds, out evenly over the next 10 years, Kellway questioned the origins of while relinquishing the majority there’s room for an additional the nearly $6-billion, but the govern- of the responsibility to the prov- $1.2-billion to be spent this year, ment insists it’s mostly previously inces, it’s difficult to get a clear at a time when numerous provinc- unannounced money. picture of what the government’s es and municipalities are calling In November, Prime Minis- commitment to infrastructure is, for more money to renew Can- ter Stephen Harper announced said Mr. Kellway. ada’s crumbling bridges, roads, a three-year promise to spend “They say well, ‘We’ve got the and transit systems. $5.8-billion on repairs to federal largest fund ever for infrastruc- According to the government’s infrastructure, $5.3-billion of which ture in Canadian history,’ that planned spending of the $14-billion would go towards renewing infra- they’re not spending, but on the fund, the amount dished out be- structure at national historic sites, other hand, they say, ‘It’s not our tween now and 2017 would remain parks, Canadian armed forces role to spend on infrastructure, under $1-billion, and growing to facilities, border infrastructure, in any case, because that’s your $2.1-billion a year by 2021. federal buildings, research centres, responsibility cities and provinces Liberal MP David McGuinty: ‘They might try to deny it but the PBO and the The fund has been lumped into federal heritage and museum sites, of this country.”’ Library of Parliament have pored over their infrastructure spending and they a larger infrastructure pool the and Coast Guard facilities. But, The Hill Times are cutting, from one year to the next.’ 34 THE HILL TIMES, MONDAY, MARCH 23, 2015 INFRASTRUCTURE POLICY BRIEFING

MEGA PROJECTS ‘We’ve had this P3s are fi nding a lost generation of place at national level replacement of the Champlain Bridge in Some experts say the Montreal and the construction of a new infrastructure’: method of paying for P3 international bridge between Windsor and Detroit, P3s are fi nding a place at infrastructure is not one- the national level, said Mark Romoff, size-fi ts-all, and many president and CEO of the Canadian Siemiatycki Council for Public Private Partnerships, lessons on best practices a national not-for-profi t that promotes the use of the PPP model. are still to be learned. Mr. Romoff said there are currently Mega-project spending and the delicate matter of dealing with First 221 P3 projects across Canada. Nations concerns. BY DENIS CALNAN “Canada is viewed internationally as is on the rise, but critics “That has gone up signifi cantly [in cost] best in-class when it comes to P3s,” said say the country is playing and it’s likely to go up even more,” said hile all levels of Canadian gov- Mr. Romoff. “At the same time this is a Mr. Voshard, noting that the government Wernments have laid bets on complex approach to infrastructure pro- catch-up and has led estimated the cost of the project last year at private-public-partnerships (P3s), some curement so as the market grows, and as $7.9-billion. experts say the method of paying for new jurisdictions look at this approach, to Canada being less Transportation also has a signifi cant infrastructure is not one-size-fi ts-all, and they’re inevitably on a bit of a learning competitive economically. presence on the list with the Eglinton many lessons on best practices are still curve.” Crosstown Light Rapid Transit in Toronto to be learned. He said the role of the CCPPP is to (coming in at number fi ve with $5.3-bil- Canadian PPPs are considered assist governments in learning how to BY DENIS CALNAN lion); the new bridge for the St. Lawrence global models, but these partnerships use the P3 system to be the most advan- corridor in Montreal ($5-billion); the are still relatively young. As technolo- tageous. s mega-project spending rises, some southwest Calgary Ring Road ($5-billion); gy changes and contracts are fulfi lled, University of British Columbia busi- Aindustry watchers say all levels of gov- the remaking of the Turcot Interchange how the P3 projects will perform in ness professor Anthony Boardman said ernments in the country are playing catch- in Montreal ($3.7-billion); and fi nally, the the long term is still something that is the use of P3s is a “political decision” but up and that the lack of spending in this area Port Mann Bridge/Highway 1 in Vancou- not absolutely clear, said University that they can be successful if the regu- has led to Canada being less competitive ver-Langley ($3.3-billion), all making the of Toronto associate professor Matti latory regime is right. “Typically govern- economically. top 10 on the list. Siemiatycki, who has written exten- ment pays very little up front and gets “Right across the country, we’ve had Prof. Siemiatycki said the rise in infra- sively about P3s and their impacts on to deliver the infrastructure. It’s the next this lost generation in terms of infrastruc- structure spending now is to compensate for communities. guys that come in that have to pay for it,” ture. Infrastructure’s expensive and in the years of belt-tightening and complacency, The attraction to P3s is in the delay of said Prof. Boardman, who studies public ’90s we had this period of retrenchment, which led to, what he calls a “lost genera- paying in full for them and the transfer- and private organizations and the effects trying to get the books balanced,” said tion” of infrastructure spending. ring of risk to private companies. of ownership on performance. “They’re Matti Siemiatycki, an associate professor “I think we felt somewhat complacent According to Crown corporation renting the money in a way. … While of geography and planning at the Univer- with what we had and we didn’t keep pace. P3 Canada’s website, P3s “transfer a they like the value for money mantra, sity of Toronto, who has researched and And there was also political gridlock; both, major share of the risk associated with it’s a political decision.” written extensively about infrastructure what should be built and how it should be infrastructure development (such as Prof. Siemiatycki said that govern- fi nancing and delivery. paid for,” he said. the costs associated with overruns, ments in Canada have come a long way “If you see infrastructure as spending While Prof. Siemiatycki said that there’s schedule delays, unexpected main- since fi rst using P3s. He noted that gov- instead of as investment, then it can follow a gap in what we have and what we need— tenance, and/or latent defects in the ernments believed they could raise new that you would cut it when you’re in need in terms of transportation, energy and other assets) to the private sector. This is infrastructure money by using P3s while of fi nding money,” said Prof. Siemiatycki. “It infrastructure—governments still have a accomplished by engaging the private lowering government debt and “deliver- turns out now, that’s put us well behind the hard time selling the public on spending sector in a bundled contract for the life ing high quality infrastructure.” eight ball, both in terms of how our cities great amounts of money on these projects, of the asset. This contract connects on- He said the focus now is on value for are functioning, but also in terms of our in a “desperate need to catch-up.” going operations and/or maintenance money in order to lower government competitiveness. And so you can see now a Vancouver residents are voting on if they payments to the quality of the original expenses on major infrastructure, add- desperate need to catch up.” are willing to pay more in taxes to improve construction.” ing that in the future P3s will probably André Voshard, executive editor of transit, while Toronto oscillates between The P3 model of procuring infrastruc- include shorter fi nancing periods and Renew Canada Magazine and the princi- wanting “subways, subways, subways” and ture has been popularly practised at the less ongoing maintenance roles for the pal person behind the publication’s annual LRTs, and Newfoundlanders and Labrador- provincial level for years, with British private sector. list of the top 100 most expensive mega ians debate how to get their hydro power Columbia taking the lead in creating a Both Prof. Siemiatycki and Prof. projects in the country, agreed. “There’s a out of the province. Crown corporation to deal with P3s in Boardman said that governments have tremendous infrastructure gap across the To help in the marketing of the big 2003. Ontario followed soon after. The learned a lot from P3s and some of those country,” he said. “Be it energy, be it proper spending, politicians and others use the federal government created P3 Canada lessons can be applied to how more roads, be it proper bridges, be it—almost phrase “world class” to sell projects, said in the 2008 budget and it became opera- traditional contracts, fully publicly-fund- everything—the infrastructure across Can- Prof. Siemiatycki. tional in 2009. ed, -fi nanced and -owned infrastructure ada is lacking.” “There’s a symbolic and intangible The corporation’s mandate, accord- projects, are executed. That gap has led to a growing dedica- dynamic to these mega projects. You hear it ing to its website is to “deliver more P3s Prof. Boardman said that the private tion to catching up on infrastructure, from over and over again. ‘This project is going by leveraging incentives, demonstrating sector is doing a lot of work to fi gure out generating power for a growing population to make us world class [...] This is what the success, providing expertise and by pro- exactly how much a project will cost and to providing transit to the country’s sprawl- world is doing and to keep pace, we should moting P3 best practices and capacity that the public sector, by administering ing cities. do this,’” he said. building.” P3s, will learn from that. Mr. Voshard said that the annual list of Prof. Siemiatycki said that while costs Prof. Siemiatycki said that there is “In Canada we do have a lot of the top 100 most expensive mega projects are signifi cant, building the infrastructure is a risk to having Crown corporations experience with this. I guess the hope is show that infrastructure spending has con- necessary. dedicated to P3s. that that experience could be leveraged tinued to rise year-over-year. “I think now, there’s a view that this “P3 might very well deliver value to deliver better projects and ideally He noted that most mega infrastructure is critical. This is where the future of the on some projects, but the risk is that if that experience can be used to deliver spending is done by the provinces. The top global economy is going to be. And if you’re the agencies who are assessing these better P3 projects when P3’s the right four spenders in his list are full of hydro going to compete in that economy you have projects, who are setting up the evalua- approach, but also applied to tradition- electric energy projects, including the to have those infrastructures in place. And tion processes, if they have an interest in al-build projects,” in order to minimize Keeyask Hydroelectric Project in Manitoba so governments all across Canada, and seeing projects built as P3s, there can be risk, instead of transferring the risk to at number four ($6.5-billion); the Romaine really all over the world, are turning to a concern that their methodologies, or the private sector, which is expensive, Complex in Quebec ($6.5-billion); and the infrastructure, both to create jobs through their fi ndings, might be overly in favour said Prof. Siemiatycki. Muskrat Falls Project in Labrador ($6.99-bil- the construction in the short term, but then of P3s [over traditional builds],” said Mr. Mr. Romoff said P3s will continue to lion), comes in at number two. also to drive this long-term productivity and Siemiatycki. expand in Canadian municipalities, with The Site C Clean Energy Project is livability as well,” he said. The reason provinces took the lead things such as LRTs and in aboriginal Canada’s most expensive infrastructure That’s something Mr. Voshard echoed. is because they are the primary provid- communities, while moving into other mega project at $8.775-billion. Mr. Voshard “Any big mega project, or small project, that ers of public infrastructure within their sectors that are traditionally publicly said that the Site C project is also one of comes down the line, is needed,” he said. jurisdictions. owned and operated. Canada’s most controversial infrastructure [email protected] But with the advent of major feder- [email protected] expenses, because of the ballooning costs The Hill Times al infrastructure investments, such as The Hill Times THE HILL TIMES, MONDAY, MARCH 23, 2015 35 INFRASTRUCTURE POLICY BRIEFING

LIBERALS’ PENSION IDEA Liberals want to invest pension funds into infrastructure projects, critics say it won’t work

Liberal MP The interest in doing so Scott Brison, his party’s comes after the Quebec fi nance government announced critic, said the federal a partnership with model would be different public pension fund from Quebec’s model. ‘They Caisse de depot et have their own placement du Québec. model there. Our model would be BY DENIS CALNAN one where- by pension he federal Liberal Party wants to part- funds would Tner with Canadian and foreign pension operate very funds to help invest and operate major independently infrastructure projects if it forms the next from govern- federal government, but opponents say it ment.’ The won’t work. Hill Times The interest in doing so comes after the photograph by Quebec government announced a partnership Jake Wright with public pension fund Caisse de depot et placement du Québec, in which the province gets to deliver new public transit infrastruc- ture, without having to bear the entire cost. If the federal Liberals are hoping for a similar scheme, to attract investment in says Mark Romoff, president and CEO of what it was a few years ago. So there’s an public investment.” public transit to avoid paying full costs, it the Canadian Council for Public Private opportunity to use the government’s bal- [email protected] is likely to fail, says University of Toronto Partnerships, a national not-for-profi t ance sheet to an extent, but to leverage on The Hill Times associate professor Matti Siemiatycki, who organization that promotes the use of the has researched and written extensively PPP model. ECONOMIC CLUB about infrastructure fi nancing and delivery. “Yes, the pension funds are interested in He said he does not think the “trial balloon” this sector. The key of course, is that they OF CANADA in Quebec will be successful. are looking for large projects because they “Those projects don’t make any money,” need [...] to generate the returns they need The Economic Club of Canada presents: said Prof. Siemiatycki. “Transit, unfortu- to meet their pension obligations,” said Mr. nately costs a fortune to build. And once Romoff. you build it, it tends not to cover, in most He noted that some unions have also cases, its operating costs let alone the invested their pension funds in public capital costs. So if the Quebec government infrastructure, including the Labourers’ WHERE WE STAND: sees this, especially in the transit realm, as International Union of North America (Li- a way to raise private money, so they don’t UNA), and the Ontario Municipal Employ- AN ARMCHAIR DISCUSSION have to take on debt to build projects— ees Retirement System (OMERS). that’s extremely unlikely.” That can be controversial, Prof. Siemi- WITH CANADA’S NATIONAL PARTY PRESIDENTS Liberal MP Scott Brison (Kings-Hants, atycki said. N.S.), his party’s fi nance critic, said the “There’s a reputational risk. Most of federal model would be different. those big public sector pension funds, in “They have their own model there. Our many cases their members are unionized As Canadians prepare for the upcoming federal election, there will be considerable public focus on each major model would be one whereby pension employees either those [public] facilities political party’s vision for Canada. Through the perspectives of each party’s national president, this discussion funds would operate very independently or other types of infrastructure. So they do panel will explore the principle foundations of each party, their vision for our country’s future, and why theirs is from government,” said Mr. Brison. “Work- take a reputational risk if they start pur- the party to stand behind as we move closer to Election 2015. ing with provinces and municipalities—we chasing privatized assets here in Canada. would package infrastructure projects and So for the most part you haven’t really Featuring: make them attractive to global institutional seen that much of it,” he said. John Walsh, President, Conservative Party of Canada capital, which means that Canadian pen- While Canadian pension funds are sion plans would be welcome to partici- already investing in infrastructure, such as Rebecca Blaikie, President & Quebec Campaign Director, New Democratic Party of Canada pate. So would foreign pension funds.” airports, in other countries, Prof. Siemi- Policy Resolution 36 of the Liberal Party atycki said it has not occurred here to the Anna Gainey, President, Liberal Party of Canada states that “the government of Canada same degree because Canada has not sold Dave Bagler, Interim President, Green Party of Canada must play a leadership role in unlocking off as much of its public assets. untapped sources of non-government “For the most part, the ones that can investment, including from pension funds actually make money, whether its electrici- Friday, April 10th, 2015 and public-private partnerships.” ty, whether its water, whether its toll roads, Mr. Brison stressed that the Canadian those tend to not to have been privatized 11:30am - 1:30pm, The Fairmont Château Laurier, 1 Rideau Street, Ottawa Pension Plan would still be operating in a here in Canada and because of that there is ~ way that would maximize its returns for its not that much opportunity,” he said. Member Pricing: Individual seat: $89 +HST Table (seats 10): $801 +HST. investors and any decision to participate Mr. Brison said, however, that there is would be independent. opportunity in the long-term. Guest Pricing: Individual: $110 +HST Table (seats 10): $990 +HST Prof. Siemiatycki said there are a “Ultimately the pension funds take a Lunch will be served. Advance registration is required – numbers are limited couple of transit projects that it may be very long-term approach to their invest- For tickets call (613) 369-4363, visit www.economicclub.ca possible for the federal government to get ments and there’s a patient and long-term the pension plans to sign on. approach to investments with pension “Airports, for example, do have the funds. And ultimately that provides very Thank you to our annual sponsors: potential to be profi tably run. And in fact good value, potentially, to users of that our Canadian pension funds run numerous infrastructure,” said Mr. Brison. “The prov- airports around the world and collect the inces are largely broke. Cities and munic- revenues from them,” he said. ipalities don’t have the fi scal capacity to There is an interest from pension funds do everything that’s necessary. And the to invest in public private partnerships, federal government’s fi scal capacity isn’t