With little evidence to show the last stab at infrastructure spending boosted an ailing economy, it’s puzzling the government would entertain thoughts of round two.
Yet that’s the message federal Finance Minister Jim Flaherty issued Monday – and this from a government chasing the reputation of being fiscally responsible.
With concern mounting over the deteriorating economic conditions in several European countries and widespread shock waves, Flaherty said Canada would take steps to counter a renewed slide. In 2009, the country sank $50 billion into infrastructure projects, but in the aftermath, many financial experts questioned whether it did the economy any good.
Flaherty underlined the relatively healthy position Canada is in to take such action – debt is lower compared to most of the industrial giants and our deficit is shrinking.
But also in this debate – arguments in favour of spending on public projects – just last week the chiefs of the country’s municipalities warned of the dire consequences of continuing to ignore repairs to infrastructure. At stake, municipal leaders say, are roads, public transit, aging water systems, public housing and a host of other features the public depends on.
To that end, these leaders finally got reassurances at a Federation of Canadian Municipalities meeting in Saskatoon that the federal government would extend funding on such projects past 2014.
But it’s a perennial problem. Vancouver Mayor Gregor Robertson pointed out that local governments get only eight cents of every tax dollar paid by Canadians.
That would be the logical reason for spending more cash on restoring vital assets in our towns and cities – because it can’t be put off any longer. A structural redistribution of how tax revenues flow, while we’re at it, would be in order to address this problem in the future.
And if by chance these rebuilding projects boost the economy along the way, that would be a fantastic bonus.