Money Talks

Politicians at every level enter the debate over how and 
when the Infrastructure Stimulus Fund gets used

At the same time Prime Minister Stephen Harper was delivering an economic update that amounts to a tentative thumbs up, Liberal infrastructure critic Gerard Kennedy, who participated in ReNew Canada’s industry roundtable last month, was releasing a report that slams Harper’s Economic Action Plan, calling it an “Economic inAction Plan.”

The Liberals report that only 12 per cent of the $4 billion Infrastructure Stimulus Fund (ISF) fund has been spent, resulting in job losses, rather than the gains of between 120,000 and 132,000 projected by the Conservatives.

At this September’s Institute of Public Administration of Canada (IPAC) conference in Toronto, WeirFoulds’  Bradley McLellan said, “Years ago there was long-term funding; now there’s different types of funding programs that have brought forth a trilogy of announcements before you actually have your project open.”

Kennedy calls this “announce-a-rama” a smokescreen for the fact that real action is not being taken.

Standing in an undeveloped park in Burlington, Ontario soon after the release of Kennedy’s report, Liberal leader Michael Ignatieff said, “Canadians are not going to be employed by press releases.” He called the empty plot “one example among thousands where they announce something and nothing happens.”

But Grant Hopcroft, director of intergovernmental and community liaison for the City of London, Ontario, said during a session at IPAC, “I don’t think anyone who knows how this program has unfolded should be surprised at how little actual construction has taken place up to this point.”

At that same session, McLellan said, “[Stimulus funding] is not necessarily going to create jobs in the next nine or ten months. When you take on an infrastructure project, you have to do it the right way. You have to consult, procure the right people to get it done, and so on.”

Hopcroft said things have progressed as quickly as can be expected: “We had a streamlined process after the federal budget announcement in January; we [London] submitted applications as a municipality in Ontario in the late spring; those were turned around in what was, for any government mechanism given the amount of applications they had to deal with, record time; and we had announcements in early June. “

Despite questions about how public servants were able to sift through the thousands of project applications—a recent Public Service Commission of Canada audit of Infrastructure Canada found the  department is facing “a significant shortfall of staff,” and that some of the existing staff don’t meet “essential qualifications”—Hopcroft said there’s already plenty of work underway that doesn’t involve shovels. While some projects are easy to implement—“you call for an extension on your road paving contract and you can put people to work next week”—others require time for design and public consultation.

“There are a lot of designers at work,” said Hopcroft. “The folks in the consulting community are probably swamped right now with the amount of work they’re doing in terms of finalizing design for roads, community centres and so on.”

Hopcroft said it’s important to make sure municipalities do these projects right, even with a March 2011 deadline looming—a deadline that Kennedy charges will allow the federal government to “claw back” some of the funding announced for municipalities if it’s not used.

At a separate IPAC session, Canadian Urban Institute’s Glen Murray said, “This ‘shovels in the ground’ mentality means most of what’s currently being built will end up costing us more in operations.” Planning properly makes the difference between a liability and an asset. “If you build ugly and brown, it costs you money,” said Murray.

To meet the March 2011 deadline, McLellan said municipalities need to be “nimble.” Coordinating construction work with payouts from the ISF and Communities Component of the Building Canada Fund (which has a slightly longer shelf life) is the only way to make this opportunity work.

That’s apparently easier said than done: the Globe & Mail recently reported that Huntsville, Ontario Mayor Claude Doughty put thousands of dollars on his personal credit card to order steel in January for the expansion of an $18.5-million community centre.

Edmonton Mayor Stephen Mandel said that while he can’t speak for a smaller municipality like Huntsville, as long as the paperwork is done, they feel okay to start work. “We’re not worried about getting paid—we’re a big city; if it takes some time we can carry that cost.”

The rollout has been slow going, but Mandel says that’s the nature of bureaucratic process. Once a project is approved by a politician, there’s the inevitable announcement and that’s when the “process” starts.

“If politicians could write the cheques, we would,” says Mandel. “That’s not how it works—at any level. “We have a process to go through at the municipal level, too. It takes a long time to get a development permit even once the project has been approved by Council.”

McLellan said the real issue isn’t how quickly current funding is flowing, rather it’s how to put long-term funding in place.  “As we look forward we’re concerned about what’s going to happen next,” he said. “What will help us address [municipalities’] needs on a go-forward basis as we try to restructure our communities that have been hard-hit by the recession, and what is the risk as we know from the mid-90s, when federal and provincial governments go into deficit? What happens to those programs is that they get cut.”

McLellan said, “Boom/bust is sometimes great; it helps us deal with backlogs. But at the same time we need to have sustainable base funding.” 

This article appears in our November-December 2009 Issue