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Investing in Canada: Canada’s Long-Term Infrastructure Plan

Table of Contents

List of Figures

Minister’s Message

Our government is committed to supporting the middle class and those working hard to join it. We have an ambitious agenda to grow the economy and create jobs and growth in communities across the country. In addition to lowering taxes for the middle class, introducing the Canada Child Benefit and strengthening the Canada Pension Plan, our plan is making unprecedented investments in infrastructure from coast-to-coast-to-coast that will benefit all Canadians. Our goal is to strengthen our economy and provide new opportunities for our families, our youth, our seniors and our communities to enhance their quality of life.

The Honourable Amarjeet Sohi

Generations ago, our country made major investments in infrastructure to improve the future prosperity for generations that followed – the transcontinental railway, the Trans-Canada Highway, and the St. Lawrence Seaway, to name a few. These major projects changed the face of Canada and helped propel the country into a new era of prosperity and opportunity.

The Time to Invest is Now

We know the world is changing. Every day it becomes more digital; international trade grows; and the ways we work, move and communicate are evolving. Climate change presents new challenges and we need to find innovative ways to build a cleaner economy that relies on green, renewable, and adaptive technology. Our investments today will ensure that Canada remains among the best places in the world to call home.

We are committed to ensuring that all Canadians have opportunities that allow them to reach their full potential. Infrastructure is the backbone of our communities and plays a key role in our vision for the future of our country.

We believe our cities should have efficient public transit systems to help reduce traffic congestion and improve air quality. We recognize that when Canadians have access to public transit to get to work and back home to their families quickly and safely, it enhances productivity and quality of life. Whether in rural municipalities, small communities or urban centres, we also need to ensure we are investing in backbone infrastructure like roads and bridges to ensure that people and goods can move freely.

We want to see our communities become cleaner and more digitally connected. We need to find ways to use data more wisely – places where communities install traffic lights that can adapt to congestion to speed up traffic flow, adopt new technology that can identify leaks in our sewer systems, and place more solar panels on rooftops so we can conserve energy and produce energy from renewable sources.

PUBLIC TRANSIT

Build new urban transit networks and service extensions that will transform the way Canadians live and work.

GREEN INFRASTRUCTURE

Ensure access to safe water, clean air, and greener communities where Canadians can watch their children grow.

SOCIAL INFRASTRUCTURE

Provide adequate and affordable housing and child care and cultural and recreational centers that will ensure communities are great places to call home.

TRADE AND TRANSPORT

Provide sustainable and efficient transportation systems that will bring global markets closer to Canada to help businesses compete, grow and create more jobs.

RURAL AND NORTHERN COMMUNITIES

Grow local economies, improve social inclusiveness and safeguard the health and environment of communities.

Climate change is happening and it is already affecting communities across Canada. Now is the time to invest in infrastructure that helps make communities more sustainable. Our investments in disaster mitigation and adaptation infrastructure will help reduce our impact on the environment and prepare communities to face the effects of climate change now and in the future.

Our world is more integrated than ever before. To compete in a globally competitive marketplace, we must invest in innovative ways to get our goods to market and onto the world stage. To do this, we need to invest in the next generation of roads, railways, ports and airports that will connect our cities, rural and northern communities to essential trade corridors.

We want to build an economy that benefits all Canadians. To make this a reality, we must put in place social infrastructure – like affordable childcare, safe, affordable and secure housing for all, and support for our aging population – that ensures every Canadian has access to the supports and services they need.

Now is the right time to make these investments. Canada is well positioned economically and can afford to invest in both our short-term successes and the success of future generations.

A Two-Phased Approach

We firmly believe that local decision-making results in better outcomes for Canadians. That is why one of my first priorities was to establish strong working relationships with our counterparts in other orders of government. Through extensive consultations with provincial, territorial, municipal and Indigenous partners, and national and regional stakeholders, it became clear that certain investments had to be made quickly, while others required significant planning. Before making massive investments in major, transformative projects, we needed to restore, modernize and adapt our existing infrastructure. We also learned that all orders of government needed some time to effectively plan for long term projects. This is why we developed a two-phased approach.

The first phase of our infrastructure plan focuses on repairing and upgrading our vital public transit systems; investing in water and wastewater systems to ensure all communities, including Indigenous and rural communities, have secure access to clean drinking water; and that funds were available to build and repair much-needed affordable housing, including essential investment in Indigenous housing. We also provided funding for planning and design work to allow communities to prepare for longer term projects.

The second phase of our historic, long-term plan focuses investment in small and large projects that will help build our economy for the future. Our plan will help Canadian communities face the challenges – and reap the rewards – of the 21 st century global economy. These investments will help us achieve our vision for Canadian communities: better movement of people and goods, cleaner air and water, reduced greenhouse gas emissions, smarter and more efficient cities, greener transportation systems, improved water management, better access to affordable housing, more affordable child care, new public spaces that make our communities even greater places to live, better transportation and digital infrastructure for people living in remote communities, and improved energy security and a reduced reliance on diesel in the North.

To achieve this ambitious vision, we will continue working closely with our provincial, territorial, municipal, Indigenous partners; stakeholders across the country; and of course, with all Canadians. Collaboration and partnership will remain at the heart of our success.

Innovative Approaches

We need to innovate and try new approaches to address Canada’s infrastructure gap. The Canada Infrastructure Bank is designed to do just that. The Bank is an additional tool available to our provincial, territorial, municipal and Indigenous partners that allows them to use public funds to attract private sector and institutional investment for new, revenue-generating infrastructure projects in the public interest. By leveraging the capital and expertise of the private sector, public dollars will go further to support projects that might not otherwise move forward and allow grant dollars to support projects that are more appropriate for traditional funding mechanisms.

We also want to empower our partners to take risks and think outside the box. That is why we launched the Smart Cities Challenge – a Canada- wide competition open to communities of all sizes, including municipalities, regional governments and Indigenous communities. The Challenge encourages communities to improve the lives of their residents by using data and connected technology in innovative ways.

Transparency

We are committed to full transparency and using evidence-based planning as we move forward with our ambitious plan to transform Canada for years to come. We will work with our partners to improve the quality of data and reporting and the Government of Canada will report annually to Canadians on the plan’s progress and results. We are proud to have launched the online Investing in Canada plan project map where Canadians can search for investments made in their communities and I encourage you to check out the project map yourself.

Our Commitment

This plan demonstrates our commitment to ensuring that all Canadians, no matter where they live, have opportunities to reach their full potential. Infrastructure is the backbone of our communities and plays a key role in our vision for the future of our country.

As we move forward, we will continue our close collaboration with leaders across the country to help Canada – and all Canadians – build on our past successes and secure a strong, prosperous, and inclusive country for generations to come.

The Honourable Amarjeet Sohi,
P.C., M.P. Minister of Infrastructure and Communities

Executive Summary

The Investing in Canada plan is the Government of Canada’s comprehensive, long-term plan for building a prosperous and inclusive country through historic infrastructure investments. Through this Plan, the Government is investing in people: to enable Canadians to get to work and home quicker and spend more time with their families; to have places to play and stay healthy; to enjoy clean drinking water and pristine environments; and to run their businesses and access services regardless of where they live.

Over the 12 years of the Plan, starting in 2016, the Government will invest over $180 billion in infrastructure – more than doubling existing federal funding – to achieve three objectives:

• Generate long-term economic growth to build a stronger middle class;
• Improve the resilience of communities and transition to a clean growth economy; and
• Improve social inclusion and socio-economic outcomes for all Canadians.

The Plan is built upon extensive research and public engagement that made it clear Canada faces a broad-based infrastructure gap which is limiting Canada’s economic growth and Canadians’ quality of life. Examples of the gap include congestion in urban centres, too many Canadians struggling to meet their housing needs, insufficient and aging water and wastewater systems, community infrastructure that is in disrepair, a lack of broadband Internet connectivity in many rural and remote areas, and a lack of basic infrastructure in many Indigenous communities.

The Investing in Canada plan differs from previous infrastructure plans – it is longer-term and guided by clear priorities, concrete objectives and, instead of outputs, by measurable outcomes. It offers long- term, sustained funding to enable planning and prioritization by all orders of government. It funds a wide variety of needs and priorities including large, transformative investments, from housing, to public transit, to community centers, to highways, that will benefit Canadians now and in the future.

Provinces, territories, municipalities and Indigenous communities are key partners. Through the Investing in Canada plan, the federal government’s increased investment in infrastructure will be further leveraged by all orders of government to more than double the reach of the Plan’s funding.

Of particular importance will be addressing the infrastructure gap within Indigenous communities. To advance reconciliation and the shared economic interests between Canada and all Indigenous Peoples, the Investing in Canada plan makes unprecedented investments in the infrastructure that is most important to Indigenous communities, such as new and renovated housing, clean drinking water and community infrastructure such as roads and wastewater systems, as well as community, culture and recreational facilities, all of which are essential to healthy, safe and prosperous communities.

The Investing in Canada plan not only provides a clear path forward. It is rooted in partnerships with provinces and territories, municipalities, Indigenous communities and other stakeholders. It will help equip governments with the information required to make the right decisions in the future. It will foster innovation so that Canada faces tomorrow’s challenges with new tools and ideas.

Addressing Local Needs and National Priorities

The Investing in Canada plan addresses the unique local needs of urban, rural, remote and Indigenous communities while also addressing national priorities. From coast-to-coast-to-coast, Canadians will see the direct impacts of infrastructure investments – including more affordable housing, improved air and water quality, decreased urban congestion and enhanced resilience to a changing climate.

Through the first phase of the Plan, launched in 2016, the Government made significant and timely investments to address immediate infrastructure needs. The next phase, to be delivered over 10 years, will have transformative impacts on Canada’s economy and communities. Coupled with ongoing investments, these new investments represent an historic level of federal infrastructure funding.

The focus on outcomes will be key. To allow Canadians to see exactly what difference infrastructure investments are making in their communities and lives, the Government will track and report regularly on the following outcomes:

Five Priority Investment Streams

The Plan will help close Canada’s infrastructure gap by making significant investments over the long-term in five priority investment streams: public transit ($28.7 billion), green infrastructure ($26.9 billion), social infrastructure ($25.3 billion), infrastructure for rural and northern communities ($2 billion) and trade and transportation infrastructure ($10.1 billion) (Figure 1). In addition, the Plan includes permanent funding such as the Gas Tax Fund and funding committed prior to 2016 such as the New Building Canada Fund.

Public Transit – By improving the capacity, quality, safety and accessibility of public transit infrastructure throughout Canada, the Plan will reduce urban congestion and increase the proportion of Canadians who use transit and active forms of transportation to access jobs, education, health care and social activities. Investments will also support the transition to a low-carbon economy and reduce air pollution and GHG emissions.

Green Infrastructure – The Plan will address persistent challenges to air, water and soil quality and make Canadian communities, including Indigenous communities, more resilient to climate change, natural disasters and extreme weather events. Infrastructure that reduces greenhouse gas emissions through cleaner electricity grids, energy efficient buildings and transportation systems sets us on a path to a low-carbon future. Other investments in green infrastructure are building Canada’s resilience to the risks we face from the impacts of climate change. Collectively, these investments will enable and advance the objectives of the Pan-Canadian Framework on Clean Growth and Climate Change and generate sustainable economic growth.

Social Infrastructure – Investments in housing, early learning and child care, accessible infrastructure and in community, culture and recreation infrastructure will create stronger, more vibrant communities. Funding will be broadly available for large and small projects, depending on the needs of communities. These investments will lead to new opportunities and improved social inclusion for many Canadians, especially Indigenous Peoples and low-income populations. The Plan allocates dedicated funding for housing, early learning and child care, and cultural and community infrastructure for First Nations, Inuit and Métis communities.

Rural and Northern Communities – Investments will help rural and northern communities overcome the challenges that come with small, often widely dispersed populations and long distances from markets, which together make infrastructure projects expensive and complex. This in turn has led to larger infrastructure gaps – including little or no access to reliable transportation and broadband Internet connectivity and a lack of energy security – than for larger communities. By addressing these gaps, the Plan will also create new economic opportunities in these regions.

Trade and Transportation Infrastructure – The Plan calls for investments that will help Canadian businesses compete in the global marketplace. By increasing the capacity of major trade corridors and port facilities, the Plan will help exporters get products to market more quickly. By addressing transportation needs and connecting communities in the territories, it will help accelerate northern and Indigenous economic and social development. It will also make Canada’s trade and transportation infrastructure more resilient to climate change impacts and position Canada for lower-carbon economic growth.

Figure 1: Investing in Canada Plan, by Stream

Core Science Facility, Saint John’s, Newfoundland and Labrador
The construction of the Core Science Facility at Memorial University of Newfoundland in Saint John’s, Newfoundland and Labrador will create an integrated learning and research environment that fosters inventive scientific thinking and practices.

Opening the Door to Innovation

Across the five priority investment areas, the Government will work with its partners to foster innovation and transform how public infrastructure investments are made. Key approaches include:

The Canada Infrastructure Bank – Opportunities exist for innovative approaches to funding and financing infrastructure. Fiscal constraints on all governments have increased the interest in exploring private sector investment and alternative financing mechanisms as a means to increase investment. The newly-established Canada Infrastructure Bank (CIB ) collaborates with public and private sector partners to facilitate a new, optional partnership model transforming how infrastructure is planned, funded and delivered in Canada.

Smart Cities Challenge – The Smart Cities Challenge applies a new, experimental approach to program and project delivery in the form of pan-Canadian competitions. The Challenge incentivizes communities of all sizes, including Indigenous communities, to apply a smart city approach that leverages data and connected technology to improve the quality of life of their residents. It will fund projects that are ambitious yet achievable, as well as innovative, transferable, replicable and scalable.

Innovation in Transportation – Connectivity and automation have the potential to make Canada’s transportation sector more efficient and competitive, driving economic growth. The Plan calls for investments in a range of innovation priorities, including ways to evaluate new unmanned aircraft and safely adopt driverless vehicles.

Delivering the Plan

The Government of Canada’s Investing in Canada plan will be delivered by Infrastructure Canada, along with other federal departments and agencies including Indigenous Services Canada, Natural Resources Canada, the Canada Mortgage and Housing Corporation, Employment and Social Development Canada and Transport Canada. Infrastructure Canada is responsible for the overall coordination and annual reporting on results for the Plan. Reflecting the partnership focus, bilateral agreements between the federal government and each of the provinces and territories are a key delivery mechanism for the Plan.

1. The Infrastructure Gap

The Minister of Infrastructure and Communities’ 2015 mandate letter reflects the need to address Canada’s broad-based infrastructure gap. Extensive research, public engagement and the advice of the Advisory Council on Economic Growth Footnote 1 make it clear that Canada needs a long-term approach to investing in infrastructure to improve the quality, accessibility and sustainability of services that Canadians use every day.

From a lack of access to broadband Internet connectivity in rural areas to congestion in urban centres, these gaps impose limitations on Canada’s economic growth and its capacity to build and grow the middle class. The importance of well-maintained, productive, and effective infrastructure cannot be overstated. However, assessing the extent of the infrastructure gap is challenging for all orders of government. Key challenges include difficulty in determining how much to invest, the lack of precise data on the state and performance of existing assets, a lack of innovation in infrastructure development and the need to find new ways to better use public funds and access private capital.

The Government of Canada is overcoming these challenges through new, innovative investments. The Investing in Canada plan builds on the framework announced in Budget 2016, the 2016 Fall Economic Statement and Budget 2017. This document explores the central economic, social and environmental trends that present opportunities and challenges for Canadian communities, and sets out the key Government of Canada initiatives to address them.

Why Infrastructure is Important

Infrastructure is the set of basic facilities and systems required for a country, city or community to function. What kind of infrastructure exists and how well it works affects the success and prosperity of communities and determines whether they have the capacity to deal with economic, social or other challenges.

Roads and railways ease the flow of people and goods, allowing economic activities to be concentrated and specialized across regions, facilitating a strong economy. Tele-communications, especially digital and cellular, enable real-time information transfer regardless of distance, helping Canadians in all regions stay in touch and access services. Secure water supply and sewage treatment safeguard human health so that Canadians are able to enjoy clean drinking water and pristine environments. Housing and early learning and childcare investments provide integral supports for individuals and families. Community hubs bring together health, social, cultural, sport and recreational services providing Canadians with places to play and stay healthy. Increasingly, there is recognition of the role of infrastructure – including natural solutions such as wetlands for storm water retention as an alternative or complement to traditional built infrastructure – in helping societies address the challenges presented by the changing climate and extreme weather events.

The public benefits of infrastructure, including those related to human health and well-being, and the high costs to develop and build it, have naturally emphasized the central role of governments or state-owned enterprises in the sector. In Canada, infrastructure is largely developed, owned and managed by provincial, territorial and municipal governments. This includes highways, roads, bridges and other transportation infrastructure; water and wastewater facilities; education and health infrastructure; and social infrastructure including housing, early learning and child care and community centres.

Policy makers, academics and practitioners increasingly recognize that the private sector can contribute in a variety of ways to infrastructure investments, operations and regulations. Already, private companies build and operate power generating plants, water supply and wastewater treatment facilities and run telecommunication companies, airlines, toll roads, buildings and port facilities. Other infrastructure sectors in Canada are managed by varying degrees of public and private entities. For instance, semi-private entities like Crown corporations play a role in energy, airports and ports, and non-profit associations work with publicly-owned entities to develop sport, recreational and cultural infrastructure.

Investing in People

Investing in infrastructure is ultimately about investing in people. Modern, accessible public transit allows people to get around their cities more easily, and reduces gridlock, so that everyone spends less time in traffic and more time with their families. Investing in water and wastewater projects means parents can trust that their children are drinking cleaner, safer water. And investing in social infrastructure provides affordable housing and helps families access early learning and child care, unlocking people’s potential to participate fully in economic and community life.

Ownership and Investments in Infrastructure

In recent years, all orders of government in Canada have increased their investments in infrastructure. Provinces, territories and municipalities, which own the vast majority of core public infrastructure (such as roads, bridges, transit systems, water and wastewater systems and culture, sport and recreation infrastructure) (Figure 2), collectively doubled their investments between 2003 and 2013, from $14.5 billion to $29.5 billion. Footnote 3

Figure 2: Ownership of Public Infrastructure by Order of Government Footnote 2

The federal government also increased its spending on core public infrastructure, from $600 million annually in 2003?04 to $5.5 billion annually by 2014?15. Footnote 4 These investments have helped reduce the average age of Canada’s public infrastructure from 17.8 years in 2000 to 14.7 in 2013. Footnote 5

Even so, infrastructure demand has outpaced investments for several decades. While the size of Canada’s infrastructure gap is a matter for debate – in 2013 estimates ranged from $50 billion to $570 billion depending on the methodology used Footnote 6 – there is consensus that significant investments are needed to address it. The additional $95.6 billion in federal support announced in Budgets 2016 and 2017, including more than $7.6 billion for Indigenous communities, along with significant investments in infrastructure by other orders of government, will help to close the gap while also supporting longer term investments to address emerging challenges and opportunities.

Sugarloaf Bridge, Zeballos, British Columbia
The replacement of the Sugarloaf Bridge in Zeballos, British Columbia with a stronger and bigger one allows local residents to spend less time on the road, and provides people with access to important emergency services.

The Need for Better Infrastructure Data

To make sufficient and appropriate infrastructure investments, an understanding of the state and performance of existing assets is required. Robust, consistent data trends can assist governments in identifying the gaps in areas such as the age, the physical condition and the performance of core public infrastructure assets, and make it possible to plan and design effective infrastructure investments.

Currently, there are limited data available at the national level on the state of public infrastructure assets in Canada. Some municipalities, in particular the larger centres, collect data related to their infrastructure investments; however, variations in how and what information is collected limit the ability to aggregate this information to produce a robust national picture. Similarly, federal infrastructure investment data collected by Statistics Canada include some of the information to provide a picture of Canada’s infrastructure assets but lack the details required to support modern infrastructure planning.

To help address the data gap, a collective of national industry and municipal associations initiated the Canadian Infrastructure Report Card, a voluntary survey of municipally-owned public infrastructure assets. The 2016 Report Card collected data from 120 municipalities, primarily large urban centres, representing just over

50% of Canada’s population. Footnote 7 At the same time, no data were collected from municipalities in Nunavut or the Northwest Territories, and there was low representation from Yukon and the Atlantic region. Footnote 8 Four years prior, a 2012 Report Card was undertaken, but due to a number of distinguishing factors the two reports cards have limited comparative value; the associations note that 2012 and 2016 report cards should be viewed as separate snapshots in time. Footnote 9

There is a need to develop a more comprehensive understanding of the national state and performance of public infrastructure through better data collection and analysis. The development of such a baseline would allow for future trends analysis and comparison which will lead to greater and more informed infrastructure decision-making.

However, even with Canada’s limited data, the impacts of under-investment are clear. Traffic bottlenecks in Toronto, Montréal and Vancouver cause commuters collectively to spend the equivalent of more than 10,000 years stuck in traffic every year. Footnote 10 In February 2018, 81 long-term drinking water advisories were in place on public drinking water systems on reserves. Footnote 11 In 2016, 12.7% of Canadian households were in core housing need, that is, housing which is not adequate, suitable or affordable and the household would need to spend 30% or more of its before-tax income on acceptable housing. Footnote 12 Among First Nation households on-reserve, about one-third lived below defined standards of adequacy or suitability. Footnote 13 Canada lags behind most developed nations in wastewater treatment, which 13% of Canadians lack. Footnote 14 An estimated 35% of Canada’s wastewater systems, 29% of Canada’s potable water systems and 23% of storm water systems were in fair, poor or very poor condition in 2016. Footnote 15

Innovation in Infrastructure

International experience shows that investments in technologies to make better use of infrastructure can significantly increase productivity. For example, embedded remote sensors and real-time wireless technologies enable assets to become “intelligent” by connecting them with one another, so that structures can “talk” to a central data platform. This allows for remote monitoring that can capture critical performance parameters and provide real-time information on how infrastructure is performing, as well as early warning of potential service disruptions so that they can be more easily addressed, minimizing loss of service.

There is great potential for infrastructure innovation: in design, materials, products, processes and methods used to build infrastructure, as well as in the services or functions it provides, including nature-based solutions. Alternative solutions may derive from new ideas, or from existing ideas not yet routinely used either in Canada or across different asset classes. For example, the transportation sector can do more research, development, pilot testing and deployment to integrate innovations such as driverless vehicles. These innovations have the potential to increase transportation productivity, which would position Canada at the forefront of emerging technologies in the sector. The effective use of technology to make buildings more energy efficient cannot only lower energy costs and mitigate environmental impacts, but also spur innovation, create jobs and help advance Canada’s transition to a low-carbon economy. Despite this, many investment decisions tend to favour “tried and true” approaches, which can be a barrier to successfully developing infrastructure capable of meeting the needs of tomorrow.

A key barrier to innovation in public infrastructure is a lack of capacity during the pre-development phase of a project, exacerbated by a lack of data and often short time frames for accessing funding. Many municipalities, small and northern communities in particular, sometimes lack the capacity to adopt innovative planning and development methods, a challenge compounded by a lack of capacity for data and asset management.

Asset Management

Asset management is a structured way to maintain and improve infrastructure while also collecting data about its use and condition. These data are critical for making sound decisions about how to prioritize future spending, avoid costly infrastructure failures and increase resilience through effective maintenance. As a relatively new discipline, asset management is not uniformly practiced across Canada. The Federation of Canadian Municipalities has noted that while there have been advancements in some Canadian municipalities and provinces, it is still uncommon to find asset management effectively incorporated into strategic management systems. Footnote 16 Many medium-sized municipalities and most small municipalities and Indigenous communities do not always have the necessary capacity to introduce asset management. This challenge is even greater in Canada’s smallest communities, some of which face high staff turn-over rates and limited access to training. Yet the need for asset management is pressing: in 2016, the second Canadian Infrastructure Report Card found that although some progress has been made, one-third of Canada’s municipal infrastructure is in fair, poor, or very poor condition. Footnote 17

Research and development is required to fill the knowledge gaps in how to make smart, innovative and resilient infrastructure that will contribute to sustainability, economic growth, improved performance in key sectors such as construction while also solving major societal challenges, including the need to reduce GHG emissions and enhance the resilience of Canadians and their communities to the impacts of a changing climate. Validation and demonstration of emerging technologies encourages their uptake while lowering the costs, creating economies of scale and supporting competitiveness and innovation.

Private Sector Investment and Alternative Financing Mechanisms

There are opportunities for innovation in the way infrastructure is funded and financed. Fiscal constraints on all governments have increased the interest in exploring private sector investment, ownership options, and alternative financing mechanisms as a means to increase investment in infrastructure.

Port Lands Project, Toronto, Ontario
The Cherry Street Stormwater and Lakefilling project in Toronto, Ontario contributes to the Port Lands Flood Protection project, providing critical flood protection through innovative, green infrastructure that will transform the industrial area into a vibrant and resilient downtown neighbourhood.

Canada is generally regarded as a leader in P3s . Footnote 18 PPP Canada, a Crown corporation that ran from 2008?18 to promote adoption of the model, invested over $1.3 billion in 25 large or complex infrastructure projects across the country. PPP Canada – as well as provincial agencies to implement P3s in British Columbia, Ontario, Quebec, New Brunswick, Saskatchewan and Alberta – demonstrated that public sector capacity to manage these complex arrangements is mature. There have been over 200 infrastructure projects delivered through P3 arrangements, representing over $70 billion of capital investment and savings of approximately $1.7 billion compared to traditional procurement approaches. Footnote 19 Canada’s P3 market is strong and stable, and the Government of Canada continues to support the model as an effective way to build more infrastructure across Canada.

Government measures to promote alternative financing of infrastructure can be implemented by government departments, but more often they are delivered through agencies or arms- length models. Indigenous Services Canada, for example, is working with several Indigenous organizations to explore options for alternative financing of infrastructure. This ranges from pilot funding for individual homeownership tools to long-term financing supported by federal transfer agreements.

At home in Canada, loans and loan guarantees have been used by the federal government to achieve a variety of policy objectives. For example, the Business Development Bank of Canada lends directly to Canadian small- and medium-sized enterprises on a commercial basis, at interest rates commensurate with risk. Similarly, the Canada Small Business Program (Innovation, Science and Economic Development Canada) guarantees portions of a loan obtained by a small enterprise. Federal loan guarantees have been applied to $1.3 billion of debt for the Maritime Link Project, a large-scale infrastructure project that is part of the strategy to address the growing need for renewable energy in Canada’s easternmost provinces. The guarantee will lower the costs of borrowing for the proponents, with projected savings of over $1 billion for rate-payers in Newfoundland and Labrador and Nova Scotia.

Project bundling is a potential means of expanding the use of alternative financing. By combining a number of small projects into one large project, the public sector owner can create the critical mass necessary to attract institutional investors, designers and operators. A coordinating body at the provincial or territorial order of government could support smaller communities in bundling projects with other jurisdictions. For example, Indigenous Services Canada has used an innovative bundled approach for the delivery of new or renovated school projects that promotes partnership and collaboration between government, First Nations and industry leaders. The projects allow community members to play a hands-on role in designing their own school.

Champlain Bridge, Montréal, Quebec
The construction of the new Champlain Bridge in Montréal, Quebec will provide a sustainable and long-term solution to the evolving transportation needs of the region, and ensure the continuous and safe flow of people and goods.

Another financing approach is attracting increased risk-bearing investment from private sector and institutional investors such as pension funds, infrastructure funds and insurance companies. This builds on the P3 model by having investors assume additional risks related to usage or revenue, which can encourage innovation in meeting infrastructure needs. In recent years, institutional investors have been trying to diversify their portfolios, seeking assets such as large infrastructure projects that provide a stable return on investment over a long period. To date, however, the focus of such institutional investors has been on investing in existing infrastructure assets rather than investing in construction of new assets.

The current infrastructure environment is framed by the need for strengthened data, the potential for innovation, and the demand for infrastructure financing. Within this context, Canada also faces a number of challenges and opportunities, explored in Section 2, for addressing its infrastructure gap.

2. Canada’s Infrastructure Challenges and Opportunities

Governments support the development and maintenance of infrastructure to ensure that Canadians, particularly the middle class and those working hard to join it, have what they need to grow and prosper. Some assets, like water and wastewater facilities, are necessary for human health. Others, like transportation and communication networks, have tangible impacts on economic growth. The types of infrastructure a community requires depends on many factors, including demographic trends. As work and living patterns change, and as communities grow or contract, what Canadians need to participate in the economy, to engage with others in their community, and to mitigate the effects of disasters exacerbated by climate change, will also change.

The gaps in infrastructure and their effects are felt by Canadian communities grappling with rapidly evolving challenges in global trade, the environment and society. These gaps also make it difficult to take advantage of opportunities presented by these changes.

Furthermore, infrastructure gaps and challenges are felt more keenly by some than by others. For example, Indigenous communities face unique challenges, especially in the context of rapid population growth and existing gaps in even basic infrastructure. This section explores current and future challenges that Canadians face in how they live and work. It is these challenges that the Investing in Canada plan will address to help secure a prosperous future for all Canadians and support reconciliation with Indigenous Peoples.

Global Challenges and Opportunities

Climate Change

Canada’s climate is changing. Temperatures in Canada have been increasing at roughly double the global average; in Canada’s North, they are rising at roughly three times the global average. Footnote 20

Increased temperatures have brought with them: longer heat waves; more intense, frequent and extreme storms; permafrost degradation; diminishing sea ice and snow cover; and rising sea levels.

Climate change and extreme weather events threaten existing infrastructure across the country, impacting its effectiveness, lifespan, cost, maintenance, rehabilitation and renewal. For example, some older water systems cannot process an increase in precipitation, which increases the risk of flooding. Footnote 21 Climate-related infrastructure failures can threaten health, safety and social well-being, disrupt essential services and economic activity, and often require expensive repair or replacement. For example, one of Canada’s costliest disasters – the June 2013 floods in Alberta – resulted in an estimated $6 billion in damages and recovery costs, saw 1,000 km of roads destroyed, caused hundreds of bridges and culverts to wash out, and forced an 11-day shut-down of two main rail lines. Some areas are at greater risk than others: coastal regions and the North are particularly vulnerable to the effects of rising temperatures such as thawing permafrost and higher sea levels.

The technology for achieving this target is available but deploying it will require coordinated action. For example, the transportation sector is Canada’s second largest source of GHG emissions (after the oil and gas sector) accounting for 24% or 170 Mt in 2015. Footnote 24 The wide-scale deployment of electric and alternative fuel vehicles would substantially reduce emissions. At the same time, however, challenges to deployment remain, including the lack of an extensive recharging and refuelling network.

The estimated cost of responding to climate impacts in Canada – including impacts from extreme weather and other climate-related natural disasters – is projected to grow from an annual average of $5 billion in 2020 to $21?$43 billion by 2050. Footnote 25 The Parliamentary Budget Officer forecasts that over the next five years the Government of Canada can expect weather- related disasters to cost the federal government an average of $902 million per year. Footnote 26

Disaster mitigation actions provide significant return on investment. Benefit-cost ratios for flood prevention measures in Australia, the United States and the United Kingdom are 3:1, 4:1 and 5:1, respectively. In Canada, $63.2 million invested in the Manitoba Red River Floodway in 1960 has saved an estimated $8 billion in potential damage and recovery costs. Footnote 27 Ensuring assets are designed, built, operated and maintained in consideration of current and future climate risks will reduce vulnerability, enhance resilience and help protect Canadians and their communities.

Changing Global Trade Patterns and Transportation Needs

Over 60% of Canada’s gross domestic product (GDP ) is tied to international trade. Footnote 28 The state of Canada’s trade infrastructure directly affects the ability of Canadian businesses to compete in global commerce.

Shifting global trade and production patterns, increased global demand for Canadian commodities, larger vessels requiring less frequent port stops, and opportunities from new trade agreements exert and shift pressure on existing infrastructure and trade corridors. Regions of high economic growth (e.g., Asia), are distant, which increases the complexity, time and risks associated with trade connectivity. Canadian trade and exports continue to expand, which increases the demand on transportation infrastructure capacity and performance.

For all these reasons, current trade and transportation infrastructure is not sufficient to meet the needs of the future. A 2015 report by the International Transport Forum estimates that by 2050, international freight volumes will quadruple; the North Pacific will overtake the North Atlantic as the world’s most important trading route; and shifting trade patterns will increase average shipping distances by 12%. Footnote 29 Congestion and bottlenecks could put Canadian shippers at a disadvantage compared to international competitors able to deliver more cost effectively and quickly. The federal government’s strategies for attracting foreign direct investment would also be undermined as investors gravitate towards countries with more efficient trade systems. With other countries looking at investing substantially in their domestic transportation infrastructure, Canada is at risk of falling behind should it fail to make its own investments.

Cascumpec Bridge and Collector Roads, Alberton, Prince Edward Island
Replacement of the Cascumpec Bridge in Alberton, Prince Edward Island improves driver safety and connects farms and wharves to markets.

In addition, strategies to retain and attract new foreign direct investment must ensure that supply chain access remains reliable through multiple transportation channels and on cost-competitive terms. The Advisory Council on Economic Growth recognized that Canada must expand its freight transportation capacity. Footnote 30 Canada’s current capacity constraints include congestion along some of the nation’s most significant trade corridors. The growing volumes of containerized and bulk cargo at major ports, especially on the west coast, place pressure on connected rail and road systems. To curtail congestion, inefficiencies, and declining performance, capacity needs to be increased.

Diverse Needs: Cities and Small Communities

Canada’s municipalities and Indigenous communities are diverse and have differing needs and capabilities.

The demographics, size and geographic location of a community significantly affect its needs. The Canadian population continues to grow, increasing 5% from 2011 to 2016; however, growth is not equal across Canada. Growth rates were higher between 2011 and 2016 in northern and western Canada, with Nunavut and Alberta leading with 12.7% and 11.6% growth respectively. None of the Atlantic provinces, on the other hand, had population growth over 2%; and New Brunswick had a slight net decline. Footnote 31 Among the 25 municipalities located outside major cities with the highest rates of declining populations, 17 were in the Atlantic provinces or Quebec. Overall, one in four Canadian municipalities had a population decrease between 2011 and 2016. Footnote 32

82% of the Canadian population live in large- and medium-sized cities, Footnote 33 and these cities continue to grow. For example, between 2011 and 2016, Calgary and Edmonton grew 14.6% and 13.9% respectively. Footnote 34 The three biggest metropolitan areas in the country – Toronto, Montréal and Vancouver – are now home to more than one-third of all Canadians, with a combined population of 12.5 million. Footnote 35 Population growth, especially rapid growth, can increase congestion, population density and demand for services, making infrastructure needs more complex.

Urban congestion can have significant economic and trade impacts. Based on 2006 data, Transport Canada estimates that congestion in Canada’s nine largest cities costs between $3.1 and $4.6 billion annually. Footnote 36 Other estimates are even higher: the C.D. Howe Institute estimates the economic, social and health costs of congestion in Toronto alone at $7.5 to $11 billion annually, Footnote 37 while the Toronto Board of Trade estimates that the direct annual costs of congestion for the Greater Toronto and Hamilton areas could rise to $15 billion by 2031. Footnote 38

The liveability of cities is important for Canada’s ability to attract and retain trade, businesses and talent, which together impact Canada’s global competitiveness. From 2009 to 2013, more than half of Canada’s GDP was produced in the six census metropolitan areas with a population of 1 million or more – Toronto, Montréal, Vancouver, Calgary, Edmonton, and Ottawa?Gatineau. Footnote 39 Toronto accounts for nearly one-fifth of Canada’s entire economic output, which is larger than that of every province except Ontario and Quebec. Footnote 40

Cities are home to about half the global population and produce 70% of carbon emissions. Footnote 41 Acknowledging this challenge, many Canadian cities have positioned themselves on the front line in efforts to combat climate change. Vancouver, for example, is implementing its “Greenest City Action Plan,” which has long-term goals such as eliminating the city’s dependence on fossil fuels. Footnote 42

Small Communities

Small communities make significant contributions to Canadian society and the economy and they too face infrastructure gaps. In fact, many small communities face unique challenges of their own due to their size, distance to markets, and changing demographics, all of which can make it more difficult to ensure basic infrastructure needs are met. Construction, operation and maintenance costs can be high due to the lack of economies of scale, and small communities tend to have a small tax base that limits the capital available for infrastructure. Local administrations in small communities may also face capacity challenges when developing their own projects or collaborating with other communities to gain efficiencies and cost savings.

In addition, Canada’s small communities face changing demographics and other challenges. For example, they often lag behind urban areas in access to broadband Internet connectivity, with the gap growing as broadband speeds increase. A lack of broadband can limit access to services and information and can make economic growth difficult. Often these communities lack the density to support private sector investment.

Kenojuak Cultural Centre, Cape Dorset, Nunavut
The construction of the new Kenojuak Cultural Centre and Print Shop in Cape Dorset, Nunavut provides a space where artists can work and visitors can learn about the local heritage.

Indigenous Communities

Sustainable infrastructure helps Indigenous people participate more fully in Canada’s political, social and economic development but for many Indigenous communities, transformational change is needed to meet basic infrastructure needs while existing infrastructure is repaired and improved.

Since 2006, the Indigenous population in Canada has grown at over four times the rate of the non-Indigenous population. The median age of the Indigenous population was 29.1 years in 2016 – more than a decade younger than the non-Indigenous population (41.3 years). Footnote 44 Many Indigenous communities are struggling to accommodate this growth with inadequate basic infrastructure such as roads, bridges and water treatment systems.

Additional challenges and pressures include:

• Housing availability: 24.2% of First Nations people, 11.3% of Métis and 26.2% of Inuit lived in a dwelling that was in need of major repairs in 2016. Overcrowding is also an issue, and it contributes to housing deterioration. Footnote 45
• Deteriorating water and wastewater systems: Although progress has been made in improving water and wastewater systems on-reserve, much more needs to be done. As of February 2018, 81 long-term drinking water advisories were in effect on public drinking water systems on reserves.
• Inadequate waste management: Improper waste management on-reserve results in contaminated sites, which have a significant negative impact on the environment, human health and safety as well as secondary impacts on economic development and effective land use. Footnote 46

Northern Communities

Northern communities are affected by many of the same issues as small and Indigenous communities, in addition to their own unique challenges. Nearly 300 remote communities, most in the North, have no access to the continental electricity grid. Most of these communities rely on fossil fuels for electricity generation. Footnote 47

Communities are investing in cleaner energy, but for larger renewable systems that displace use of diesel, technical, financial and policy challenges need to be addressed. In northern communities connected only to local grids, fossil fuel is usually still the most effective option and in many cases, the need for investment is urgent. For example, in 2014?15, Qulliq Energy reported that half of Nunavut’s communities had power plants over 40 years old – long past the end of their useful life. Footnote 48

The North has unique challenges regarding trade and transportation infrastructure. For many northern communities, year-round access is possible only by air transport, which is vital for travel, resupply of perishable foods, as well as access to health care, law enforcement and other public services. Winter roads and summer marine services are relied upon for resupplying other essential needs that cannot be feasibly or economically transported by air, including many household goods, vehicles, fuel, construction equipment and materials.

The challenges of a difficult climate and season- dependent access lead to logistical and procurement challenges, limited competition, and design and project management complexity, resulting in high costs for building infrastructure. Moreover, the challenges posed by the North’s limited transportation systems are expected to worsen with climate change while the need for increased food and energy security, natural resource extraction and tourism will require more transportation infrastructure.

Investments in northern infrastructure are clearly needed, Footnote 49 , Footnote 50 , Footnote 51 particularly in ground, air and marine transportation infrastructure, to protect the safety of travellers and communities while laying the foundations for economic growth.

Infrastructure and Social Development

Infrastructure is essential to the delivery of services required to build inclusive communities where all people can participate and contribute to society.

Housing and Homelessness

Across Canada, homelessness affects a diverse cross-section of the population and the communities in which they reside. In 2014, an average of 13,857 Canadians slept in an emergency shelter on any given night, accounting for over 90% of Canada’s 15,000 shelter beds. Footnote 52

Additionally, in 2016 over 1.7 million Canadian households (12.7%) were in core housing need, meaning that their housing was either in poor condition, crowded or unaffordable, and the family was unable to access acceptable alternative housing in their community. Footnote 53 For 76% of Canadian households considered to be in core housing need, the main challenge is affordability. Footnote 54 Indigenous Peoples are disproportionately affected by poor housing; for example, Indigenous Peoples are 10 times more likely to use a shelter than non-Indigenous people. Footnote 55

Carcross/Tagish First Nation Learning Centre, Carcross, Yukon
The construction of the Carcross-Tagish First Nation learning centre in Carcross, Yukon has become a central gathering place for the community to connect with each other, learn and grow.

Early Learning and Child Care

Quality early learning and child care systems play an important role in promoting the social, emotional, physical and cognitive development of young children and can support positive lifelong benefits. Yet only 1 in 4 children in Canada have access to regulated early learning and child care. Footnote 56 Affordability also remains a concern for many families. The lack of affordable, quality child care can also limit the ability of parents to participate in the labour market. Various studies have found that creating affordable child care spaces in Quebec enabled some 70,000 mothers to join the workforce. Footnote 57

Socio-economic challenges that can impact children have a disproportionate effect on Canada’s young and fast-growing Indigenous population. Access to culturally appropriate early learning and child care is a critical building block for the success of Indigenous children and families. However, as of 2009, less than 18% of Indigenous children had access to these programs. Footnote 58

Community, Culture and Recreation Infrastructure

Canada’s culture and recreation infrastructure is in critical need of repair and refurbishment. The Canada Infrastructure Report Card determined that sport and recreation facilities in the public realm are in the poorest condition of all asset categories surveyed, with 19% of sport and recreation infrastructure rated in poor or very poor condition, which negatively impacts the functioning of the facilities. The estimated replacement cost of facilities in poor and very poor condition is $9 billion. Footnote 59

With the fastest growing population in Canada, the need for cultural and recreational infrastructure is especially felt in Indigenous communities.

Public Transit’s Role in Social Development

To participate in their communities, Canadians need reliable and reasonably priced public transit that connects them to hubs of commerce, recreation and work. Public transit infrastructure investments can provide better access to housing, shelters, early learning and child care, as well as to cultural, sport and recreation infrastructure. Transit systems are struggling to meet existing demands and increasing urbanization is continually adding more pressure.

Accessibility

Due to a variety of barriers, persons with disabilities are more likely to face exclusion, poverty and isolation. They have almost twice the rate of poverty of persons without disabilities, and nearly 60% of working age adults with disabilities are unemployed or out of the labour market. Footnote 60 Physical barriers in the built environment can also exacerbate economic and social exclusion. However, properly designed infrastructure can address some of these unique challenges by increasing access to transportation, public spaces and buildings.

A Need for Action

Facing a growing infrastructure gap, and pressures of climate change, trade patterns, diverse community needs and demands for essential social services, the time for transformational investment in Canada’s infrastructure is now.

3. Investing in Canada: A Comprehensive Long-Term Plan

Through the Investing in Canada plan, the Government of Canada is making historic new investments in infrastructure to build the cities of the 21 st century and provide communities across the country with the tools they need to prosper and innovate. The Investing in Canada plan provides over $180 billion of federal infrastructure investment over 12 years – more than doubling existing funding.

The Plan includes $92.2 billion for permanent funding such as the Gas Tax Fund and for funding committed prior to 2016 such as the New Building Canada Fund. Details on these established programs are provided in Annex A.

The Plan also includes $95.6 billion in new funding for infrastructure programs. Sections 3 and 4 detail how the Government will determine where and how to invest this new funding, the implementation approach and how progress will be measured.

The Minister of Infrastructure and Communities is responsible for coordinating the Plan across the federal government and ensuring that the outcomes of infrastructure investments are reported to Canadians in an open and transparent manner.

The Investing in Canada plan considers the unique needs of urban, rural, remote and Indigenous communities while also addressing national priorities. The Plan builds on the Government’s robust partnerships with provinces, territories, municipalities and Indigenous communities. From coast-to-coast-to-coast, Canadians will see the direct impacts of infrastructure investments – including more affordable housing, improved air and water quality and greater resilience to the impacts of a changing climate.

Transit Garage Upgrades, Winnipeg, Manitoba
Upgrades to the p

Full post as published by BusinessAssociationsBlog.com on April 15, 2019 (boomark / email).