First of all, thank you for the opportunity to be here with you. I should warn you that asking me about infrastructure is like trying to get a glass of water out of a fire hydrant.
The Association of Consulting Engineering Companies is the voice of consulting engineering companies across Canada. We represent more than 400 private companies, and collectively we employ about 60,000 Canadians. Our firms provide a wide range of engineering, scientific, managerial, and professional services to both public and private sector clients. As such, our member firms are involved with almost every aspect and every facet of public infrastructure in Canada.
We believe infrastructure is a core business of government and an investment in our quality of life. It connects and enhances communities, it enables commerce, and it protects the environment. We applaud the meaningful and significant commitments by several successive governments and the ambitious investments proposed by this current government. It is encouraging to us to see that all the parties are more or less rowing in the same direction on infrastructure. Commitments of seven, then 10, now 12 years provide the opportunity for owners of infrastructure to plan more effectively and manage their assets more effectively. It allows for the design and construction supply chain, including municipalities and public agencies, to more effectively manage and invest in their capital and their technological and human resources. However, there has been much discussion over the slower-than-anticipated pace at which investments are being made. This is a concern to us as well.
The government has noted that their funding regime is based on receipts received when projects are constructed. This is a fair and reasonable explanation. The government's new requirement for the provinces and territories to provide a three-year rolling forecast is prudent, and will be helpful going forward. It also appears that the bilateral negotiations with the provinces took longer than the government had initially anticipated. I suspect that the government is as frustrated as the rest of us. We are grateful and encouraged to see the recent wave of announcements of phase two funding.
However, while we remain confident that the government will eventually fulfill its current commitments to infrastructure investment, albeit much of it later than originally anticipated, it is also important that the commitments are not only long term but also timely and as consistent as possible. Both the investing in Canada plan under this government and the building Canada plan under the previous government are significantly back-end loaded, with most of the investments skewed toward the latter years of the program. The recent delays, while understandable and defensible, will even further back-end load the infrastructure commitments. This threatens to negate some of the advantages of making long-term commitments.
We are all trying to maintain our current workforce through this early period of relatively modest investment. Then, suddenly we'll all be charging up a hill with no idea of what's on the other side. Labour and materials will become more expensive because of intense competition. Approval and regulatory processes will become overwhelmed. Municipalities could have challenges with cash flow or meeting their contributions. Delays and overruns will become almost inevitable. The resultant business uncertainty may discourage private investment. The important economic and societal benefits of infrastructure may be delayed or—worse—unmet.
To help infrastructure in a timelier and more consistent manner in the short term, we recommend a re-profiling of the existing building Canada plan from the previous government so that investments can be made earlier in the program to help offset the recent profiling of the phase two investments in the last federal budget.
Our second recommendation is to begin planning and renegotiating the next generation of federal infrastructure investments prior to the expiry of the current programs. Gaps between programs result in layoffs and lost capacity and expertise, only to have to rebuild years later when a new program is announced. This applies to both us and our public sector partners. For example, after the expiry of the previous building Canada plan, there were three announcements over two governments. Each successively and legitimately claimed to be the largest commitment yet in Canadian history. However, over this same period we also saw our industry shrink by 15% as we waited for the funding to flow—a loss of much-needed expertise and capacity. Only recently have we started to rebuild that capacity.
In cases where municipalities have robust and well-considered asset management plans in place, we recommend providing funding based on their investment program rather than on a project-by-project basis. This would allow multiple strategically related projects to be approved under a single application. More importantly, it will serve as an incentive for municipalities to develop and adopt asset management plans to guide strategic investment decisions.
Finally, I would encourage you to look at the cumulative regulatory burden that can significantly delay or increase the costs of projects. Each year, all levels of government introduce new laws and regulation impacting everything from labour to licensing, from building permits to accessibility requirements. Each of these may individually be very sound policy, but there's rarely consideration of cumulative impact. In particular, you'll want to keep a very close eye on Bill C-69 regarding environmental impact assessments. Many provincial and municipal projects will likely fall subject to Bill C-69. While there is a lot more detail yet to come, there is a significant risk that unless Bill C-69 and its regulations are sufficiently clear and appropriately scoped, it may result in projects being delayed or not proceeding at all.
I would like to conclude by acknowledging that we are grateful for the significant investments by this and previous governments. It is a sound investment in Canada and Canadians. Notwithstanding the challenges of implementing and delivering programs of this magnitude, I believe we can all make it work, and the consulting engineering sector is here to work with you and help make it work.
Thank you. I look forward to your questions.