On Tuesday, October 19, Justin Trudeau’s Liberal party was celebrating a decisive win over the Conservatives, and a clear mandate for the next four years.
This win (a surprise to some) has also demanded attention from anyone with an eye on big trends in infrastructure and public private partnerships in Canada.
Trudeau plans to double the Canadian federal government’s infrastructure investment on an annual basis for the next 10 years. In his election prospectus (‘An historic investment plan’), Trudeau calls for a transformative investment for Canada and the largest infrastructure investment plan in Canadian history.
He breaks down his infrastructure spending promise to Canadians into three main sectors: Public Transit, Social and Green infrastructure. Each set to receive C$1.45 billion on average over 4 years.
With a guaranteed four year term the Liberals have a mandate for at least C$17.4 billion out of the C$60.0 billion additional funding announced on top of the C$65.0 billion already committed by previous governments.
So… Where is this investment likely to go? Which existing or new projects will be the ones to watch?
Below are just some of the higher profile current projects and needs that might stand to benefit from a new emphasis on infrastructure investment.
1. Transportation projects
Trudeau wishes to triple the federal government’s investment in public transit infrastructure, giving more flexibility to municipalities in the funding of municipal transit projects. Some key projects include:
Also, no list of grand transport projects would be complete without Canada’s ‘White Elephants’: its high speed rail projects:
2. Social infrastructure
The Canadian Council for Public-Private Partnerships points out that Hospitals and healthcare projects have recently been the most active sector for PPP in Canada, with many projects in procurement or complete in British Columbia, Ontario, Quebec, and New Brunswick.
The CCPPP identifies a total of 59 projects in Ontario, 9 projects in Québec and 13 projects in British Columbia alone, and another 5 health care projects in procurement or in construction in other provinces and territories.
Long term care homes in Ontario and in Quebec are still lacking and more attention could very well be brought to this subsector of healthcare. Also, social housing developments and student housing projects will also likely be part of the Liberal’s plan for their social infrastructure surge.
Other public accommodations that may fall into the social infrastructure category could include: courthouses, detention centres, recreation and culture facilities (such as stadiums, concert halls and multi-purpose sports facilities) and perhaps some IT infrastructure projects.
3. Green infrastructure
While several renewable energy projects have been undertaken in Canada over the past 10-15 years, it is likely that the largest beneficiaries of an uptick in liberal infrastructure investment would be the municipalities across the country dealing with ageing water and waste programmes.
Aging pipes under major cities have never been easy to replace, and the water grids were added as the cities grew. Each grid is also often owned by more than one municipality, creating jurisdiction issues when comes the time to replace or repair them. An injection of federal investment may help push these through.
Three major cities (Toronto, Victoria and Montreal) all currently being pointed at for dumping wastewater off their shores and in waterways are under pressure to invest in cleaner methods and find alternative more sustainable solutions.
Waste management, waste to energy and composting
Federal and provincial legislation and programs promoted in recent years will prevent most cities and municipalities to revert to landfills in order to manage their solid waste. This means there is potential for newer facilities.
A few cities have taken the lead in this respect: Surrey biofuels, Hamilton biosolids, and Calgary composting, to name a few.
The verdict – too soon to be certain
This laundry list of available projects, bolstered by a popular, well positioned new leader might leave you feeling that Canada is on the verge of an ‘infrastructure bonanza’. The reality is – as ever – more subtle.
The infrastructure cycle is much longer that the four years a majority government gets to prove its value. Many projects such as those above take two or three years to plan, evaluate, assess and procure before federal, provincial and municipal leaders can proudly lay the first brick or officially break ground and start construction.
As an example, when Transport Canada had finally received the go-ahead for the procurement of New Bridge for the St. Lawrence, it took approximately two and a half years before an agreement could be signed. This delay wasn’t born of a lack of enthusiasm. This massive C$2.15 billion infrastructure spending (C$4.24 billion over the entire 34 year contract) used the fastest procurement mechanisms available to government authorities.
The promise to surge federal investment in infrastructure over a 10 year period is ambitious, but a 4 year (albeit stable) majority is no guarantee that these projects will all be miraculously fast tracked into fruition. One way or the other, however, when Justin Trudeau takes office in November, you can bet that infrastructure financing professionals around the world will be paying close attention to how he intends to implement his Historic Investment Plan.