Our roads are clogged, public transit in major Canadian cities pales in comparison to other world class cities and high speed trains simply do not exist.  While estimates on the size of Canada’s infrastructure deficit vary, the conclusion is the same: we have underinvested for years and the amount needed to fix our infrastructure is massive.  It could be as much as $350-$400 billion.  Our quality of life and ability to compete on the global stage depend on the performance and quality of our public infrastructure.

Governments are beginning the address the problem, but commitments are short of what most experts believe will be necessary to meet our future needs. In the recent federal budget, the Government set up an innovative Public Transit Fund, funded at $750 million over the next two years and $1 billion per year after that.  They also promised $5.35 billion per year for municipal, provincial and territorial infrastructure under the New Building Plan.

However with 30-year Government of Canada bond yields at just over 2 percent, it begs the question of whether there will ever be a better time to invest in infrastructure. Government deficits are always a hot topic, but increasingly the public is beginning to understand that there is a big difference between deficits tied to investing in infrastructure and those related to program spending. In personal terms, it’s like a home mortgage debt versus a loan to fund regular monthly expenses. It may be that our governments are missing the opportunity of a lifetime to borrow at the lowest interest rates in over 100 years to invest in an economy that has grown at over 5% annually (well below current rates) over the last 50 years. We will always need infrastructure to improve the productivity of Canadians so that we can remain competitive. We also need to ‘think outside the box’ and explore many ways to finance improved infrastructure, such as enhancing the productivity of infrastructure services, managing demand through pricing mechanisms and many others identified by the Conference Board of Canada in its influential 2011 report and recent discussions. We can all agree that there is a critical need for investment — how we finance it is an important choice for our future.