Evidence of meeting #120 for Transport, Infrastructure and Communities in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was noise.
A recording is available from Parliament.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
—but that's not something that's very helpful to you. They could certainly get in touch with officials from Infrastructure Canada. They have a very good grasp of all of the programs under the department's purview. There's an existing program in this list for water and waste-water infrastructure, pre-2016. It's $204 million per year, ongoing. There are a number of other programs that could have a waste-water component.
Bonavista—Burin—Trinity, Lib.
I really appreciate the information. I asked the question directly this morning, because sometimes this goes around in circles and becomes frustrating when you try to deal with the municipalities and the provinces.
Liberal
The Chair Liberal Judy Sgro
Mr. Rogers, I'm sorry, but your time is up.
Mr. Giroux, I wonder if you could supply the committee with a copy of your list of all the various programs that you're referencing to.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Yes, with great pleasure.
Edmonton Riverbend, CPC
I'd also encourage them to contact the official opposition, which will fight hard for them in the communities if their member of Parliament isn't doing so.
I'll get back to my questions. In response to an earlier question, you mentioned the labour shortages in the country. Have you done an analysis, or is there one available, that breaks down by region the impact of the labour shortages on these projects?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
No, we haven't done that analysis by region. My comments about labour shortages were more related to our work on the overall economy. We haven't done an analysis of the impact of labour shortages on infrastructure projects in the regions.
Edmonton Riverbend, CPC
It was clear in your initial report that, and it still sounds like, Indigenous Services and Crown-Indigenous Relations and Northern Affairs didn't provide the details on infrastructure spending. Have you since received this information?
Chief Financial Officer and Senior Director, Costing and Budgetary Analysis, Office of the Parliamentary Budget Officer
Yes. Subsequent to our appearance before the Senate Committee when we were asked the very same question, very quickly after that the two government departments furnished us with the data.
Edmonton Riverbend, CPC
Will you encompass that in part of this initial report? You have the information now, so what happens to it?
Chief Financial Officer and Senior Director, Costing and Budgetary Analysis, Office of the Parliamentary Budget Officer
It's a great question. We will be incorporating that data in subsequent reports. In in looking at the data they provided us, we used a modelling approach to estimate the planned spending by those two government departments. I would say that, by and large, our estimates were generally consistent with what they provided to us.
Chief Financial Officer and Senior Director, Costing and Budgetary Analysis, Office of the Parliamentary Budget Officer
Yes, generally.
Edmonton Riverbend, CPC
I'd be curious to see that at some point. I don't know if it's going to be on your website, or if you could send it to us, or how that would work.
Chief Financial Officer and Senior Director, Costing and Budgetary Analysis, Office of the Parliamentary Budget Officer
We can certainly provide that data to the committee.
Edmonton Riverbend, CPC
Thank you.
The Prime Minister often has said that his infrastructure plan is to “create jobs, grow the economy, and put more money in Canadians' pockets—not in a decade, but right away.” That's a direct quote from him.
I'm curious as to your assessment of that. Is it doing what was promised, particularly in terms of the GDP growth rates that are or aren't being met as part of the promise?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
On the estimates we have come up with in our report for increases in GDP and the number of jobs, if you do simple math and divide the number of jobs created by the investments in infrastructure, it comes up to a very expensive per job cost. The immediate stimulative effect is not that great, because the government is injecting money into an economy that's already running at full capacity. What this does is that it just creates overheating in the economy. Therefore, the timing might not be the best if the goal is to stimulate the economy immediately; it's just putting even more fire in an economy that's not red hot but operating at full capacity. While it can be helpful for longer term growth, the immediate impact is not to stimulate growth; it's to provoke inflation.
Ziad Aboultaif Edmonton Manning, CPC
Thank you very much.
The budgeting process by government, especially for infrastructure, has to be based on a coordinated effort between municipalities and the federal government. In this case, just make the assessment how many dollars you need to spend for how long and how quickly you can do that. Usually municipalities, when they respond, they do so on the basis of their having projects ready to go, but they're just lacking the funds, so where's the gap here?
I mean, the GDP growth is about one-third of what's been projected. The money has not been spent because there's a lack of projects, or lack of understanding, or the readiness of the provincial or the municipal governments is not at the level that the federal government provided for.
If I understand any of that, I would say that the projects being presented have not been fulfilled, or the federal government has not communicated or made a correct assessment to put that budget properly in place. If it did, you wouldn't end up with this gap or the overheated economy, as you just suggested. Can you help us somehow understand that?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
I think multiple factors are at play. One is the way that Infrastructure Canada disburses funds. They disburse funds differently, depending on which projects are being undertaken. In some instances, I believe they pay at the advancement of the work. For others, a significant portion of the projects is paid only when they get a bill, and sometimes municipalities and provinces send a bill very late in the process. It can lead to disbursement by the federal government that are quite late in the process.
Nonetheless, I think the more fundamental issue with shared federal-provincial-municipal infrastructure funding is that it imposes a burden on municipalities and provinces that can be financially constraining, as some of you know. You can probably see it in some of your ridings. The cost-sharing imposes a burden on municipalities and provinces that not all of them are ready to absorb and face. The fact that it has to be cost shared, I think leads to delays in many instances, .
Also probably a couple of municipalities and provinces claim to have lots of needs, but they don't all have projects that are ready. Even though they have needs, they're not in a position to start the projects as quickly as they claim when they finally find with the money.
November 8th, 2018 / 10:25 a.m.
Liberal
Liberal
Vance Badawey Liberal Niagara Centre, ON
Congratulations and thank you, you guys. I know you guys had your hands full with this one, not only internally but also in partnership with the provinces and municipalities.
But let's not make any mistake about it. This is creating work. It's creating a higher GDP. Most importantly, it's alleviating a lot of pressure on the property taxpayers, and the water/waste-water ratepayers at the local level, which I'm most interested in. So when we look at whether the program this lends itself to, or if it's the pollution pricing program that we're now introducing in the provinces, it basically alleviates what is otherwise defaulted to the property taxpayer, and that's infrastructure, for whatever reason. Whether it's climate-related or it's age-related, regardless, the bottom line is that we're putting funding forward in different envelopes.
Coming from my former life as a mayor, one of the things I try to establish, over and above the gas tax, is another consistent funding envelope that lends itself to community strategies or community improvement plans. As you know, community improvement plans can run into many millions. I don't think anybody expects to get a successful application for $40 million for a city of about 20,000 people—sometimes less, sometimes more.
Will there be an opportunity, or can we recommend an opportunity, to have a sustainable funding envelope very similar to the gas tax that aligns with community improvement plans that can then be funded over, say, a five- or ten-year period? That would leverage more funds from the private sector, from the feds, province and, of course, the municipalities, giving the municipalities more credibility to contribute right away to get that immediate impact, while long term, getting the entire project, the entire community improvement plans, completed.
The reason I ask is that they can leverage your green light, your okay to the program, by simply debenturing the project over a 10- to 20-year, or maybe even a 30-year, time frame, whereby your contribution in response to that successful application could fund that debenture over that time. Although interest will have to be paid, it still gives that opportunity to get the project done, to alleviate the pressure on property taxpayers and water/waste-water ratepayers, and to leverage monies that would otherwise not be recognized. Does that opportunity present itself?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
I'm sure there's an opportunity to propose such a program, but the decision as to whether this program, or the program you suggested, would be in the best interest, or align with the government's priorities, is up to the Prime Minister, the Minister of Finance, or the Minister of Infrastructure. This proposal should be made to them. I cannot comment on it, given my role.
Liberal
Vance Badawey Liberal Niagara Centre, ON
The reason I asked you the question is that you're somewhat the referee here, the umpire, the person who scrutinizes, to some extent, the whole process—and, of course, we want to make sure the process is credible.
I'll ask the question this way. When you look at the processes that are happening right now, do you find that's being accomplished? Moving forward, do you think we can be consistent with the current model to then move forward over the course of the next five, 10, 15 years?
I'll give you a caveat to that. The big debate right now is carbon pricing, the pollution pricing, and the whole concept behind that is very simple. Everybody's making a big deal out of something that, quite frankly, is very simple. We're giving money back to the property taxpayers for something they're already paying for, namely, climate-related infrastructure. It's there. They're paying for it through their property taxes. All we're doing is trying to give it back, whether it through the provinces or directly.
At the end of the day, and moving forward and seeing more of an emphasis being placed on that, do you think we're going in the right direction? Do you think what we're doing, the model that we have right now, can be carried on for the next five, 10, 15 years?