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The Case for Infrastructure Investment

Introduction

Historically, communities came into existence for three basic reasons which continue to be core areas of interest to government:

Over the past 10 years, numerous studies have been made of the state of infrastructure investment in Canada and the impact of infrastructure on the economy.
Recent investments are welcome and helpful, but there is much more to do

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

Most infrastructure (even if in “good” to “very good” condition now) will require ever-increasing investment as it ages
These conclusions are likely optimistic since many municipalities do not have strong asset management processes and the state of much infrastructure is unknown

Make trade infrastructure an equal priority in the $120-billion Federal Infrastructure Plan
Make trade infrastructure investment decisions using merit-based criteria
Renew the federal commitment to Canada’s trade corridors
Partner with industry to develop a national trade infrastructure committee
Consider the proposed federal infrastructure bank to enhance trade infrastructure investment

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

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

Sustained investment is essential to maintaining Canada’s future prosperity and quality of life
Investments in infrastructure increase productivity
Highest economic and social returns on investment occur with strategic investment
The time to make critical investments in Canada’s infrastructure is NOW
Recommendations from At the Intersection: The Case for Sustained and Strategic Public Infrastructure Investment

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

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

Investment shortfall calculated to be $125 billion in 2004