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Surveying the Social Costs of Delays

Posted on March 22, 2016
Written by Art Maw

As a quantity surveyor who has been working in Ottawa for 19 years, I can say I was more than pleased when Justin Trudeau promised to raise the federal budget for infrastructure to $125 billion over the next 10 years. This is a major commitment, and we haven’t seen this kind of money spent on infrastructure since the 1960s. But to be honest, this scale of investment has been needed for 15 years.

Quantity surveyors are the cost consultants for the construction industry, so for infrastructure projects, one of our roles is to determine how the government can get the best bang for their buck. Before that can happen, though, decisions have to be made about what projects to spend the money on.

To my mind, the top of the list of priorities should be transportation. Across Canada, our highways are in need of repair. On top of that, we have the continued necessity of getting cars off the roads by making investments into light-rail transit (LRT) systems and subways—to alleviate global warming and also because there is economic value in transporting people more efficiently.

From a cost perspective, one aspect to be examined is the proposed time frame. How would speeding up the process—for instance, through a public-private partnership (P3) model—also reduce the total cost? Toronto’s Gardiner Expressway is a good example: it’s old, falling apart, and needs a substantial investment. While there may not be a hard cost attached to fixing this major artery in one of our biggest cities faster, there is if you take into account the social costs of delays.

For transportation projects, quantity surveyors often have to put a number on the benefit of a reduced commute. We know shorter commutes and more time spent with family is beneficial to our workforce’s health. Increased health means not only more productivity while at work but a reduced cost on the public health system. It’s been agreed upon that the social cost per driver is $20 per hour. So when project timelines are pitted against this social cost, you often find there’s real merit to speeding up a project one way or another.

But as I said before, along with investing in repairing highways, we also want to reduce their use. The fact is, it’s hard to add more capacity to highways in urban centres. Toronto’s Gardiner, even if it’s renewed, is still maxed out. This requires investment in LRTs and subways, but I believe part of the solution—although controversial—is the introduction of tolls. Tolls will act as a deterrent to unnecessarily using these highways, and it will encourage commuters to choose another way.

It’s an exciting time—although one we won’t see concretely for a while. From what I’ve seen, the majority of projects that will come from Trudeau’s promised investment are still in planning and will continue to be until early 2017. After that, I expect to see a lot of them hit the market for bidding, and I hope transportation will be well represented among them.

 

Art Maw is president of Hanscomb Ltd. and a professional quantity surveyor designated by the Canadian Institute of Quantity Surveyors.

 

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