Bridging the [Funding] [Knowledge] [Data] Gap
Our annual look at the state of Canada’s infrastructure.
Since the Building Canada Plan was announced in Budget 2007, Infrastructure Canada has not changed its message — in fact, they’ve tried twice to submit a letter for our readers, but have nothing new to say since Minister Cannon’s last submitted a letter for our September/October 2006 issue. They’ve just slowly worked away at getting provinces and territories to sign on to the plan. This September, Manitoba became the final province to sign up and earn itself a piece of the $33-billion pie.
Last year, Minister Cannon told ReNew Canada that the $33-billion number was based on the Federation of Canadian Municipalities’ (FCM) $60 billion infrastructure gap estimate. But that estimate keeps rising — FCM already has it up to $123 billion. By the time this seven-year plan is played out, the deficit estimate will be even higher. That’s if funding can even be accessed. Mississauga mayor Hazel McCallion has expressed to us — on several occasions — her frustration at the glacial flow of funding dollars.
After Ontario signed on to Building Canada in July 2008, Andy Manahan, executive director of the Residential and Civil Construction Alliance of Ontario (RCCAO) said, “If there is a fall election, this tends to slow the bureaucratic machinery. Thus, the process for accessing the Building Canada funds could be further delayed.”
Manahan was right — the PM has called an October election. But, if anything, it seems to have sped up the allocation of funds — or at least pushed Infrastructure Canada to get the last holdouts to sign the Framework Agreement for Building Canada.
Unfortunately, funding — or the promise of funding — is not the answer to this industry’s problems. Canada is facing energy challenges that are interconnected with the transportation sector; assets that have never been replaced are at the end of their service lives and climate change is shortening the lives of other assets.
With every organization, association and local government sharpening their elbows for the funding table, it’s easy to forget that a pile of cash is never the ultimate solution.
Certainly not the $1.8 billion devoted to a federal P3 office. Under the Building Canada Plan, any projects greater than $50 million in value will go through a “P3 filter,” meaning that projects will be vetted by the federal P3 office. Manahan says, “To give you an idea of how slow things have been moving at the federal level, RCCAO put forward the idea to Finance Minister Jim Flaherty seven months ago to have a construction advisory committee with representatives who have done public-private partnership deals. In January, we supplied the names of seven qualified candidates but there has been no movement on this.”
Manahan says, “The process to set up this P3 office has been painfully slow,” but adds that there is, at least, an interim acting chair from Canada Deposit Insurance Corporation. He says Flaherty’s office also advised him that the call for applications for the chair, board members and CEO closed last week.
Brookfield Asset Management’s estimates put the global publicly listed universe at over $1 trillion. According to Brookfield, infrastructure is so attractive because of the inflation protection it offers. Water companies in the United Kingdom, for example, generate returns based on regulated “real return” targets, meaning the return is above inflation.
While P3 offices sort themselves out, private and publically traded funds are slowly moving in. Macquarie Essential Assets Partnership (MEAP) had invested $460 million in Canadian infrastructure in its first year (2004). The Claymore Global Infrastructure Fund was launched this August, also acknowledging the attractive rate of return infrastructure offers.
Governments around the world and in Canada are welcoming these investments as extreme weather is making roads, water supplies, sewer systems and government buildings more vulnerable to multi-billion-dollar failures. In June 2008, Engineers Canada and Natural Resources Canada (NRCan) released “Adapting to Climate Change: Canada’s First National Engineering Vulnerability Assessment.” The report says, “Added demands arising from changing climatic conditions could mean that, given their lifespan, some infrastructure lacks the necessary load capacity or adaptive capability.”
Despite the significance of its warnings, this is the second federal government report about climate change impacts to be quietly posted online with only mild media interest. Authors of a third climate change study, sponsored by Health Canada, are saying the Harper government has delayed its release and will try to downplay its findings.
Lack of data and information is becoming as big a problem as the lack of funding. Without the right data, governments can’t make the right decisions about how to allocate the funds they’ve got.
So where are the blanks and how can they be filled in? Ontario Good Roads Association’s (OGRA) Joe Tiernay says they’ve asked the Ministry of Infrastructure and Energy to help fund Municipal Date Works, their asset management tool.
“PSAB requirements are not enough data to do asset management,” says Tiernay. “The province could fix this by requiring asset management as a condition of receiving grants. If it was in exchange for predictable funding over a ten-year period, municipalities would be willing to go that extra distance.”
If OGRA wants funding for information-gathering, they’ll have to wait in a long line of professional associations who feel they have the solution, if only someone would fund their work.
The Canadian Standards Association (CSA) is the latest to develop a framework for spreading knowledge and best practices across the country. PR for their Infrastructure Solutions Program (ISP) says, “Although pockets of knowledge exist across the country, the best of Canadian and international infrastructure know-how needs to be accessible to all professionals and trades who need it.” Sounds a lot like InfraGuide. In fact, members of the Canadian Society of Professional Engineers (CSPE) have expressed surprise over CSA’s move to take over where the program, operated by the Federation of Canadian Municipalities and the National Research Council, left off.
Infrastructure Canada is providing catalyst funding of up to $1.5 million for ISP’s first two years. Another bidder for federal funding, The National Roundtable on Sustainable Infrastructure (NRTSI), got $815,000 in March 2008, split between the National Research Council and Engineers Canada. There, too, surprise was expressed over this new funding for CSA-ISP.
R.V. Anderson’s Reg Andres says, “Rather than seed funds for the initial operation of a secretariat to support the roundtable activities, Infrastructure Canada opted to support the roundtable by providing funds for projects to develop infrastructure management tools and knowledge.”
When asked about funding for one program versus another, Infrastructure Canada will only say that we should contact CSA is we’re interested in their new project.
While some have called this a “pissing contest” between associations, CSA Program Manager Mike Mortimer says, “There is a multitude of approaches, and that’s not necessarily a bad thing.”
He did say that CSA-ISP’s goal to become financially self-sustaining sets it apart from other programs. “Very few standards are self-sustaining,” says Mortimer. “Most are subsidized by the government. We look for multiple sources of funding.”
What about NRTSI? Mortimer says, “NRTSI is a concept right now. As of today it doesn’t have a secretariat — Engineers Canada is carrying the torch and offering up its own staff. It’s very embryonic. As its purpose becomes clear to stakeholders, that will determine its function.” ?Guay is very clear on the roundtable’s purpose. “The main purpose of the NRTSI’s framework is to facilitate decision-making,” she says, “to provide tools to manage assets, set standards and prioritize.”
Guay says, “In our mind, any training modules have to be done in collaboration with the people who use them and the best venue is the roundtable.”
And after meeting with Mortimer and other members of CSA on September 11, Guay seems to have convinced them of that. “I’m really excited about how Chantal laid [NRTSI's plans] out,” says Mortimer. “We had a very energizing discussion and I see a lot of opportunities for synergy and collaboration.”
Both Guay and Mortimer now seem excited to work together in a forum where planners, engineers and accountants come together and work on what Mortimer calls “cross-cutting issues.”
Edmonton’s Office of Infrastructure Konrad Siu and Hamilton’s director of capital planning and implementation Gerry Davis are already fighting the disconnect between engineers and accountants by sitting on accounting boards like CICA (Chartered Accountants of Canada).
“Some of the dialogue is loud and some is confrontational, but at least it’s happening,” says Mortimer. Guay agrees. “We’re going to make sure it all ties together,” she says. “We just need to work together.”