Canada’s Second National Debt

Canada’s cumulative infrastructure deficit is really the country’s second national debt and it needs to be tackled with the same level of urgency and vigour as the fiscal debt. This is one of the messages in the brief to the House of Commons Standing Committee on Finance presented in October 2003 by the Association of Consulting Engineers of Canada (ACEC). The following is a summary of the ACEC brief.

Summary of ACEC Brief

Canada faces a growing infrastructure challenge. Over the last century, Canadians have developed a vast network of roads, bridges and airports. State-of-the-art systems have been designed and built to ensure delivery of safe drinking water and abundant electrical power, as well as to ensure the efficient treatment of waste. This infrastructure — a $1.6 trillion asset — has helped create a robust economy and allowed Canadians to enjoy an unsurpassed quality of life.

But many components of Canada’s vast infrastructure network — the very lifelines that have made the country so prosperous and have provided Canadians with such a high standard of living — are reaching the end of their service lives. What’s more, a lack of sustained investment in the country’s infrastructure is jeopardizing its safety and reliability.

The infrastructure debt continues to pile up

This lack of sustained investment has resulted in an out-of-control infrastructure debt. Years of neglect have left an estimated $57 billion in outstanding repair and replacement costs. Canada’s infrastructure debt is piling up.

A glaring example of this debt is the massive deterioration of the infrastructure in Canada’s cities and the national highway system that connects them. Effective planning needs to begin today, and firm spending commitments are required to revitalize the national highway system and to restore the infrastructure that supports the country’s cities.

Canada needs to develop a comprehensive, multi-year strategy to reduce its infrastructure debt. All stakeholders ought to be brought together to assist in this effort and to advise the government on allocating money and setting priorities. Additional funds, moreover, should be devoted — and the expenditure of earmarked funds should be accelerated — to arrest further growth of Canada’s infrastructure debt.

CIDA needs to invest in infrastructure

The pressing need for modern infrastructure is not restricted to Canada. Leaders throughout the developing world recognize clearly the fundamental role infrastructure plays in promoting industry, public health, education and jobs in their countries. Hundreds of Canadian consulting engineers, working in every part of the world, also possess first-hand knowledge of the transformative effects of infrastructure creation in developing countries. If Canada is to be responsive to the real needs of developing countries, then the Canadian International Development Agency (CIDA) should invest in projects that build or repair infrastructure.

Canada needs to face up to its growing infrastructure challenge. The health and safety of Canadians, and the economic competitiveness of the country depend on it.

Recommendations

To confront this challenge, the Association of Consulting Engineers of Canada (ACEC) believes the federal government should:

(1) establish a National Round Table for Infrastructure, bringing together all relevant stakeholders to advise the government in the development of a comprehensive, multi-year National Infrastructure Action Plan, and then commit stable funding to implement the plan in full;

(2) address the pressing need to revitalize Canada’s highways;

(3) reinstate funding for infrastructure creation and repair projects in the developing world; CIDA should increase funding for its industrial co-operation program.