Thank you, Chairman, and committee members.
The Association of Consulting Engineering Companies - Canada is the national voice of consulting engineering in Canada. We represent over 400 companies that collectively employ approximately 60,000 Canadians. Our members provide professional engineering and other science-related and project delivery services to both public and private sector clients.
In broad strokes, we certainly applaud and support the federal government's commitment to infrastructure investment. Sufficient, up-to-date, well-maintained infrastructure enhances prosperity, productivity, and competitiveness, as noted by numerous studies cited in our written submission, over a number of years.
We feel a need to really think hard about prioritizing those investments. Some infrastructure investments improve productivity and grow the economy. Other investments in the community social infrastructure enhance quality of life. Both are important. Both are needed, but there needs to be a balancing act, and sufficient priority should be given to core infrastructure that grows the economy, creates jobs, and expands the tax base. This is essential to ensure financial viability and sustainability, and the capacity to deliver social infrastructure in the longer term.
It's a bit of a balancing act, but I would say the recent commitment of $2.1 billion to transportation and trade corridors is a good illustration of that kind of investment.
A lot can be learned from the recent Senate report, “Smarter Planning, Smarter Spending”. The report makes a number of very pragmatic and practical recommendations that are, for the most part, consistent with what ACEC has been recommending for several years. We think it could further improve and strengthen the existing infrastructure program.
I want to take a moment to talk about the Canada infrastructure bank, which has great potential. If successful, it has the opportunity to create funding for large-scale projects that might otherwise be difficult, if not impossible, to find funding for in public dollars alone. However, we note that there is significant private sector capital already available in the Canadian marketplace, and that some provinces and municipalities already have strong borrowing regimes in place. Therefore, clarity on the mandate of the bank is critical to removing uncertainty and earning the confidence of the infrastructure stakeholder community. Otherwise, the creation of the bank may have some unintended consequences for existing institutions and private lenders. The private lenders will also be wanting assurances that the governance of the bank reflects best practices, so that projects will be approved on a merit base and a strong business case.
To encourage active participation from the design and construction sectors, risk must be fairly allocated among all project participants, including the bank and the overall owner of the infrastructure asset, according to each participant's capacity, ability, and contractual authority to manage and mitigate risk. As a centre of excellence, the bank will be expected to promote best practices in procurement and contracting to facilitate the equitable and effective allocation of risk and reward.
I also want to showcase another recent Senate report, “National Corridor: Enhancing and Facilitating Commerce and Internal Trade”. We strongly support this notion of a national corridor to provide a pre-established cross-country network of trade routes to accommodate economic infrastructure such as road, rail, power, pipeline, and communications projects. We need this infrastructure to be competitive and connect our country.
A national corridor would help address social and environmental challenges associated with the planning, development, and implementation of major nation-building infrastructure projects, but in a less costly and more timely manner. A national corridor would require a significantly smaller geographic and environmental footprint than the current fragmented approach to national infrastructure projects.
This idea goes back—and here's your heritage moment—to echo a proposal by General Richard Rohmer back in 1967.
I'll let the rest of our written submission speak for itself, but my members have asked that I raise the proposed changes to the Canadian controlled private corporations taxation regime. I meant to come here to speak mainly about infrastructure, but this has caused quite a reaction in our industry.
We believe that further review and consultation are needed before the federal government implements changes to how corporations are taxed. While these proposals are no doubt well intentioned, in their current form they would nevertheless have a profound and damaging impact on businesses in Canada, an impact we believe was unanticipated by the government. We believe that a more comprehensive review of the Canadian tax system, with meaningful input from the stakeholder community, is necessary to achieve tax fairness while retaining a business climate that rewards entrepreneurship, innovation, and job creation.
Thank you for the opportunity to be here, and I look forward to your questions.