New Conference Board Report Gives Ontario a Gold Star for Stimulus

Yesterday, the Conference Board of Canada (CBC) released a report called , The Economic Impact of Public Infrastructure in Ontario, examining how Ontario’s increased infrastructure spending has affected the province’s economy.

The CBC found that spending helped preserve about 70,000 jobs in the province last year and added almost a full percentage point to Ontario’s economy in 2009.

Pedro Antunes, director of National and Provincial Forecast with the CBC, said, “The additional boost to infrastructure spending in 2009 and 2010 is noteworthy, both in terms of growing the province’s gross domestic product and in maintaining employment during the recession.”

In 2009, government infrastructure spending is expected to have supported 182,897 jobs in the province; this figure is estimated to rise to 223,268 jobs in 2010.

Ontario’s Minister of Energy and Infrastructure, Brad Duguid, says it feels good to get this “third-party validation” that the work his office is doing—and has done in the past—does make a positive impact. Duguid says that while “critics” like to pull MEI’s numbers apart, it’s hard to argue with a credible authority like the CBC.

Duguid also says the ministry will move on from frenzied, ad-hoc stimulus spending and return to the more “measured approach” his office has taken in the past with programs like Renew Ontario.

The CBC found that programs such as ReNew Ontario and Move Ontario did indeed help growth in public investment overtake the rate of growth in private investment.

In addition to the short-term impact in countering the downturn in the business cycle, infrastructure investment can lead to productivity gains in the medium and long-term. The report found that productivity in Ontario has benefited from strong infrastructure growth more than Canada as a whole, and more than other developed economies.

The CBC did this research for Infrastructure Ontario, the provincial body that Duguid says has been “vigorously monitoring” the progress of the stimulus funding program in Ontario.