Investment in Infrastructure Needed

By Dade, Carlo | Winnipeg Free Press, September 25, 2015 | Go to article overview

Investment in Infrastructure Needed


Dade, Carlo, Winnipeg Free Press


Improving our ability to get our products to markets around the world was top of mind when an initiative on improving North America's integration and competitiveness was launched this month in Dallas at the George W. Bush Presidential Center.

Canada and Mexico are frustrated over the U.S. federal government's seeming inability to fund virtually any infrastructure, including major border infrastructure. It's a story that has significance, and some lessons, for Manitoba -- where provincial infrastructure spending has been a source of controversy.

For decades, the American government's powerful role in transportation infrastructure was envied by Canadian provincial capitals. That envy is now turning to concern.

The U.S. Congress and administration have been stuck passing a series of last-minute, stop-gap funding measures since 2009 to fund the U.S. highway trust fund. The fund, established in 1956 by then-president Dwight Eisenhower, provides about 25 per cent of all funding for bridges, highways and transit.

Congress has also refused to raise the tax rate, primarily on gas, earmarked to finance the fund. The gas tax was last raised in 1993; in real terms, factoring in inflation, the amount the government collects has actually been decreasing. Estimates are the fund lost more than 30 per cent of its buying power from 1993 to 2008.

The Canadian government, meanwhile, is increasing its investment. It recently announced $14 billion in new funding for the Building Canada Fund. Though this is not enough, it is much more than what the Americans have put forward in long-term funding.

More significant than the size of the funding is the commitment by the government to provide predictable, relatively long-term financing to encourage all-important private funding.

Mexico, too, is seized with the importance of infrastructure; that government has announced plans to spend US$590 billion by 2018. Though the global oil price drop has diminished Mexico's investment plans, the government's ambition is clear.

Federal action in Canada is mirrored at the provincial level. In Manitoba, the provincial government initially faced a public backlash over the tax increase to fund infrastructure, but once it was clear the new funds would entirely be devoted to infrastructure, support grew substantially. …

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