This study is the fourth of an annual series that examines global trends in infrastructure. This year, it’s focussed on the industry’s latest hot topic, water.

The report’s recommendations include new investment strategies that will change for the better how infrastructure improvements and maintenance are financed. But the most interesting recommendation is that government officials “level with the American people” about how bad the situation has become; that they explain to them the true cost of upgrading and replacing failing infrastructure. It’s also suggested that the government establish a national infrastructure bank, modeled on Europe’s success (isn’t everything?) to help attract more private capital into infrastructure investments. And, it suggests raising money through user fees.

These are all recommendations that have been made in Canada by Canadian think tanks and associations. The trouble is, not one of them would be politically popular.

The report found that Canada mirrors the United States in struggling to overcome years of infrastructure underfunding and scrambling to deal with deteriorating transport systems and lost productivity from congestion, especially in its primary cities like Toronto.

It references the Federal Building Canada Fund, saying, “To fill part of the gap, the federal government has allocated $30 billion (C$33 billion) over seven years (2007–2014) focused on achieving three primary objectives: cleaner water and air, safer roads, and shorter commutes.” There’s also mention of recent stimulus funding and Ontario’s option of privatizing some government assets to close budget deficits.

Conservative numbers now show that billions of taxpayer dollars have been spent on major infrastructure projects mainly in opposition ridings. In charts provided to The Canadian Press, government officials note in particular that the major infrastructure component of the Building Canada program has allocated $1.4 billion to large projects in opposition ridings in Ontario, and just $436 million to Conservative ridings.

“This particular fund supports major projects, typically in major municipalities that tend to be represented by opposition members,” said Chris Day, spokesman for Transport Minister John Baird. “We have different funds for different purposes. It’s wrong to highlight one fund, as the opposition has been doing, and carry that trend.”

Even though members of the public, media and official opposition have said it’s next to impossible to examine the results of the stimulus program as a whole because details are so hard to get, Minister Baird’s office maintains that data on the major infrastructure component spending is publicly available on government websites in a series of news releases.

The Liberals are still compiling data and continue to make their findings public on a website devoted to the cause. The Conservatives have their own website where, while the charts provided to CP are not posted, mapping of some ISF-funded projects continues.

The federal government has been operating a military base in the Valcartier area, close to Quebec City, since World War I. Next to the base is a research centre (DRCV) and an old bullet factory which was operated by the federal government and eventually SNC Technologies, a subsidiary of the Groupe SNC-Lavalin.

Residents of nearby Shannon, Quebec, with support from law firm Charles Veilleux & Associés, are now claiming these groups spilled, dumped and buried various toxic substances into a local lagoon.

Before 1980, SNC-Lavalin, CFB Valcartier R&D and the Military Research Centre reportedly used trichloroethylene C₂HCl₃ (TCE) extensively as a degreaser. Over time, waste TCE seeped from the lagoons and contaminated the aquifer.

The federal government claims contamination in the water table was discovered first in 1997, but Charles Veilleux says at least one engineering firm warned about contamination in a report written for DRCV in 1978. “People were aware of this contamination long before—employees of the factory were told not to drink the water anymore because it was contaminated,” says Veilleux.

The high levels of TCE in the water table were only officially confirmed in 2000 when Quebec Public Health officials told residents to stop drinking tap water and to shower with their windows open.

In 2002, CFB Valcartier connected Shannon to a new well located on base property. But it only served a third of the population.

In any event, the damage had already been done. TCE was pinpointed as the likely cause of colon, prostate, kidney, brain and skin cancers in many of the local residents.

In 2004, the Town of Shannon sued the Canadian government and the Department of National Defence and wound up with a $19-million settlement.

As of June 2009, there were 350 confirmed cases (out of 4,000 residents, 2,000 of whom live in the high-risk area)—that’s 500 times the Canadian norm for cancer occurrence.

Toxicologist Michel Charbonneau and Dr. Syd Finkelstein have found a link between cancer rates in the town of Shannon and exposure to TCE. Charbonneau collected samples from 30 to 35 cancer patients, some of whom live directly in the risk area (where exposure to TCE is highest), and some of whom never lived in Shannon and were never exposed to TCE. Finkelstein analyzed the tissue and found that Shannon residents had mutations in chromosomes not normally affected by sporadic cancer (cancers not caused by an outside source). The conclusion: Shannon residents developed cancers as a result of exposure to toxins.

Now 2,000 Shannon residents are filing their own class-action suit against the federal government and the Société Immobilière Valcartier Inc. (now General Dynamics-OTS CANADA. S.I.V.) a wholly-owned subsidiary of Groupe SNC-Lavalin.

But it was only after the small Quebec town was the focus of a January 2009 episode of the Radio-Canada show Enquête that the federal government announced $13.5-million in funding to help Shannon complete the extension of its municipal network and water supply and remove the risk.

The feds are working with the province to fast-track federal approval on this new funding—but why not work just as hard to avoid this type of contamination?

Finkelstein says this isn’t about a lawsuit; it’s about understanding the causality of a disease like cancer. The research he and Charbonneau are doing with tissue samples is groundbreaking and could lead to a better understanding of how toxins affect human tissue and why some people get cancer while others don’t.

“In many ways, we’re all living in a Shannon,” says Finkelstein. “We live in a world with toxic compounds all around us. Maybe there are the lessons to be learned out of this situation.”

Mario Iacobacci, Centre for Transportation Infrastructure, Conference Board of Canada; Michael Atkinson, President, Canadian Construction Association (CCA); Ric Robertshaw, P.Eng, Canadian Public Works Association and Co-chair of the National Round Table on Sustainable Infrastructure (NRTSI); Chantal Guay, P. Eng., M.Env., Chief Executive Officer, Engineers Canada; Andy Manahan, Executive Director, Residential and Civil Construction Alliance of Ontario (RCCAO); Andy Robinson, P. Eng., Chair, Association of Canadian Engineering Companies; Reg Andres, P.Eng, Canadian Society for Civil Engineering and Co-chair of NRTSI

March 2011

With 20 months to go before the 2011 deadline to complete stimulus-funded projects, is the plan working the way the federal government had hoped? Some participants said that municipalities have already been given leeway. Will there be 
a flexible deadline or new conditions?

John Baird: I understand that the municipalities want maximum flexibility, but this is a job creation program to stimulate the economy and we want to stimulate it in 2009 and 2010, not in 2012 or 2015. Municipalities across the country have come forward with 3,000 projects they say can be done by 2011. We’ll take them at their word and hold them accountable.

Ric Robertshaw: I’m happy to hear Minister Baird recognizes that we need to now move into an action phase.

Andy Robinson: The current program has rolled out more than it appears. Many projects on the list aren’t brand new but weren’t planned to be put in place in the next few years—they’re being brought forward. Operations and maintenance is another story and it has been a major issue for a long time. You can build it, but you have to be able to maintain it.

Mike Atkinson: “Funds aren’t flowing quickly enough.” Anyone who makes that statement as their opening line in talking about the trilateral infrastructure funding process does not know what he or she is talking about. It’s the municipalities that have to do all the heavy lifting. They have to bring the bids in and manage and administer projects. The feds don’t pay anything until the bills start coming in.

"Not just action, but policy decisions are required from the government." — Chantal Guay

Right or Wrong

There are 3,000 potential projects 
that could receive stimulus funding, 
but are they the “right” projects?

JB: You can’t spend six months or a year looking at everything ten times over. It’s not up to the federal government to go over 100 different considerations—we can’t micromanage every project, that’s a recipe for disaster.

AM: A lot of projects are being called “shovel-ready,” but if something is really a priority it should already be part of a long-term plan. In terms of job creation, some of the projects being funded will not really stimulate the economy.

Mario Iacobacci: Are these the right projects? The reality is, we don’t know. Maintenance is a no-brainer, but in terms of new projects, you need a cost-benefit analysis and few projects have been subjected to one.

Gerard Kennedy: There are some safe projects out there that will provide a benefit to the public […] action isn’t enough to say whether a project is the right project.

"Are these the right projects? The reality is, we don't know." — Mario Iacobacci

Life-Cycle Costing

The capital investment in infrastructure is a small percentage of the total costs to repair and maintain that infrastructure. Some figures show it’s as little as five to ten per cent of the total cost of infrastructure. Will municipalities asking for funding through federal programs have the capacity to operate and maintain an asset once they acquire it?

Reg Andres: Right now the major change is introducing life-cycle costing into the management of infrastructure. We won’t recognize its significance for another 10 or 15 years when we complete the change—we’re only now making traction.

RR: The National Asset Management Working Group is a strong proponent of the fact that municipalities need to be reviewing the infrastructure they have and programming the types of improvements needed in a very methodical way.

GK: The industry needs to be advised of the fact that it’s not just a bunch of money out there—in fact, that’s probably the worst part of the program, because that’s what the public is seeing right now. They’re not seeing the need for their children and grandchildren not to be paying for our shortcomings.

Custodianship

Who owns and is responsible 
for critical infrastructure?

MA: There’s a role for all levels of government; the same goes for funding. Lower-level governments don’t have the wherewithal or the tax base to properly maintain the amount of infrastructure that’s been downloaded to them.

GK: Many municipalities don’t have the capacity to manage new projects, and should be able to work with the province and the federal governments. That said, if you’re the custodian of an asset, you need to maintain the asset and show a plan for amortizing its upkeep. Anything else is utterly unsustainable.

JB: The constitution assigns different responsibilities to different levels of government and we [the federal government] respect that. We don’t do operations funding for different levels of government. We’ve got to be realistic: we’re running a $50-billion deficit this year to help stimulate the economy. We’re not cutting transfers to municipalities. In fact, we’re doubling them. But in the end, municipalities have to balance their budgets.

"For two years, the Building Canada money pretty much stayed on the shelf. Only five per cent of the funds actually made it out the door. Now this need to announce everything could undermine the infrastructure program’s sustainability." — Gerard Kennedy

Long-Term

Funding over the next two years 
is guaranteed. What about the 
next ten years?

MA: The focus should really be the future—what comes after 2011, after Building Canada. Currently the only permanent federal program is the Gas Tax Fund.

MI: What’s the impact of this infrastructure spending beyond stimulus and job creation? Stimulus is only one objective when dealing with assets that are this long-lived. What’s at stake is Canada’s productivity growth.

Chantal Guay: There’s an incredible opportunity for innovation and technology if we take an intelligent approach to infrastructure renewal in Canada. But we have to make it happen. Throwing money at it is a start, but we have to approach it in other ways and administer a long-term approach.

Casey Vander Ploeg: One problem with current stimulus funding is that it’s being rolled out in response to a short-term crisis. I don’t think it’s ever been or ever will be a funding issue—it’s about asset management. We have to stop this cycle of build-and-forget.

GK: We need to have funding, but the risks today are feast and famine. There is money committed, but you need a formula for how it will be sustainable. For the two years prior, the Building Canada money pretty much stayed on the shelf. Only five per cent of the funds in the 2007 budget actually made it out the door. Now this need to announce everything could undermine some of the principles that should be sought in terms of a sustainable infrastructure program.

You can build it, but you have to be able to maintain it." — Andy Robinson

Cookie Cutter Canada?

The need for more national standards.

JB: I’m not going to micromanage their [municipal] projects. Municipalities operate differently in every province. The municipality needs to decide [what project to prioritize].

Andy Manahan: RCCAO did a study a few years ago on bridges in Ontario, and one of the things we found is that quite a number of municipalities weren’t even meeting the legislated two-year review. There’s a need for upper orders of government to have some involvement in asset management, because this clearly points to the fact that many municipalities don’t have the capacity to properly manage their assets.

MA: It would be far-fetched to suggest that someone in Ottawa would know better than someone in Vancouver what’s best for Vancouver.

GK: Municipalities could have used some help in managing how to make that trade-off [between jobs and good-value projects] work when they only have a certain amount of staff and resources during the application process [for stimulus funding]. There’s a constitutional limitation on the federal government with some healthy aspects, but I think we have to be able to act.

MI: Solutions are varied and they don’t all require standardization. For example, municipal water authorities need to look at life-cycle management and full-cost recovery. That doesn’t require the cooperation of all three levels of government; it requires good management and better water rates.

The Gap

Is all this funding—the $33-billion 
Building Canada Fund and $4-billion stimulus funding—shrinking the infrastructure deficit?

JB: It’s going to make a major difference. But I don’t imagine any area of government where you make an investment and the deficit is eliminated.

CVP: Some say the total government infrastructure deficit is $400 billion—growth of that backlog is much higher than anticipated. It’s now at upwards of $10 billion per year. To solve this problem in the long term we would have to go much further than we have before, which is beyond what our three levels of government can afford. We need to explore alternative financing models.

"For two years, the Building Canada money pretty much stayed on the shelf. Only five per cent of the funds actually made it out the door. Now this need to announce everything could undermine the infrastructure program's sustainability." — Gerard Kennedy

Closing Shots

Soundbites, buzzwords and 
bottom lines.

JB: My biggest priority is just to make things happen in infrastructure. Governments have been too slow in the last 20 years on infrastructure and we’re working to speed that up. Our mandate is action.

CG: We need to look at the long-term so we don’t recreate the problems of the past. Not just action, but policy decisions are required from the government.

MI: The government responsible for maintaining an asset should be responsible for financing it. Eventually we should move to self-financing assets—user pay.

RA: I hope stimulus funding will address some of the backlog [in infrastructure funding], but I also hope when we come out of this we’ll have a very different way of managing infrastructure. 

Premier Brad Wall and Saskatoon Rosetown-Biggar MP Kelly Block announced 57 infrastructure projects, including $1 million in federal funding to complete the city-wide bike path network in Saskatoon, which the city will match.

Under the Provincial-Territorial Base Fund,$61.5 million worth of projects in Saskatoon will get$25 million in federal funding. This is the first time the city has gotten any funding from the Building Canada Fund, even though the program was established in 2007.

More than 25 small communities will share $54 million from the Communities Component of the Building Canada Fund projects mostly in the water and wastewater sector.

The feds are investing $911,000 in a $1.36-million water reservoir expansion and treatment plant upgrade for Duck Lake. Several towns will get funding through the Infrastructure Stimulus Fund for 15 local road and four wastewater projects, all of which should be finished by the end of next year’s construction season.

By the deadline of May 1, over 425 Ontario municipalities had submitted $6 billion worth of projects.

But finding projects that need funding is not exactly difficult–Baird and Smitherman should hold their congratulations until after they’ve assessed the submitted projects and found out whether they’re the kind that will stimulate Canada’s economy by creating jobs. That is, if they actually use that criteria.

“Priority will be given to those projects that are truly shovel ready,” says the letter. My concern is the assumption that “shovel ready” equals “good project.” That’s not always the case. In the rush to get this funding out, some good projects will be overlooked in favour of simpler ones.

The good news is that Ontario municipalities have shown a willingness to contribute their third of the funding for these projects, just as long as they get started.

“The early results of this process are testament to a great deal of collaboration and shared enthusiasm in responding to the economic crisis by all three levels of government,” says the letter.

In addition to the new Stimulus Fund, the provincial and federal  governments are also assessing the 420 applications-worth more than $1 billion in total project costs-received through the second intake of the Communities Component of Building Canada.

In Budget 2009, the federal government announced a Communities Component Top-Up of $500 million available to municipalities for projects that could be started and completed by March 31, 2011. The Government of Ontario has set aside matching funds for Ontario’s portion of the top-up funding in its recent provincial budget. Both governments promise results of this second intake will be announced soon so work can get under way, but industry isn’t holding its breath. So far, according to the Federation of Canadian Municipalities, very little of the $33 billion Building Canada Fund (announced two years ago) has been given out.

In Canada, as we head into what the Organization for Economic Cooperation and Development is predicting will be a deep recession, we have seen the current government accept the need for both increased spending and a quicker rollout of funding from the Building Canada Fund. It’s all pocket change compared to what’s going on in the United States, where both the Obama government and major financial players like Citigroup (the world’s largest bank) have made clear their interest in infrastructure. These moves are all in the context of a global rush on infrastructure, with nations either building or rebuilding the systems that keep them ticking.

Who would have thought crumbling roads, bridges and utilities would be good for so much?

The truth is, they aren’t. If countries in economic distress are going to make the most of this opportunity to cushion economies, retrain workforces and rebuild cities, archaic definitions of what counts as infrastructure and how it gets built need to come under real scrutiny. Comparisons to FDR’s New Deal aside, the rush to spend can’t be an excuse to relive the 20^th century.

Nowhere is this truer than in the energy sector. The low economic multiplier effect of energy spending is already well-known. A dollar spent on energy leaves behind few benefits; the impact of investment in traditional utilities is only slightly better. A dollar spent on energy efficiency, by comparison, creates both direct and indirect benefits to the local economy far higher than other forms of spending.

Increasing efficiency is far cheaper than building new generation capacity and it helps reduce carbon emissions. There is also an obvious market: we live and work in a sea of stunningly inefficient buildings. Retrofitting them would create employment, spur local industries and save money that could be reinvested into the local economy.

Consultants working in Portland, Oregon, estimate that a city-wide retrofit of existing housing stock could create 1,500 jobs and economic benefits of over $6 million annually for 20 years.

So what’s stopping us? It’s not a lack of technology or proven profitability-the entry of big players like Honeywell into performance contracting has shown the profits are real. The problem is that we haven’t come around to thinking of efficiency as a utility.

Well-managed energy systems and proper insulation: it’s not rocket science. But consulting firms paid to improve the performance of a single client’s operations are picking the low-hanging fruit.

To tap into the larger market, local and regional governments need to aggregate the efficiency needs of the multiple smaller buildings and facilities spread across our landscape. Turning those assets into manageable units big enough to attract private investment capital means more money to back city-wide efficiency projects coordinated by local governments in partnership with private firms. In other words, we need to get comfortable providing efficiency in the same way we provide other utility services.

Financial models exist right now that could help accomplish this task: the Toronto Atmospheric Fund, Berkeley’s Sustainable Energy Financing District, or the feebate-driven green building policy currently under review in Portland.

But to use them, cities need to figure out what true utility-scale efficiency efforts would look like. That will mean pursuing infrastructure investments that have more to do with designing financial models, training a local workforce and creating incentives for local manufacturers than with laying pipe or stringing wires.

As we begin to fix aging infrastructure, it’s worth asking what aspects of our infrastructure are broken because of age or poor maintenance, and what parts are broken by design.

Take the confused competition between public and private transportation systems currently underway in Vancouver. While the province wants to double transit ridership by 2020, it’s also poised to invest tens of billions of dollars in the Gateway Program’s highway expansion project. Auto-centric urban planning is broken by design: even when it works well, it works badly. Not only does it use money that would be better spent on transit systems (B.C.’s transit plan is expected to fall short of funds by 2012), but it promotes a form of land use that is very hard to service with transit.

B.C. Green Party leader Adriane Carr told Peace Arch News, “Solving traffic congestion-problems by increasing road capacity is like solving obesity by loosening your belt.” It locks us into a cycle of sprawl and congestion driven expansion, while leaving local economies highly vulnerable to volatile gas prices. At the height of gas prices last year, auto-dependent consumers were simply staying home.

Gateway is an example of the type of infrastructure spending Canada will end up with if we don’t change our way of thinking. As we begin to repair or expand existing roadways, we need to be asking how we could be replacing them altogether with other forms of mobility. The first barrier, as it was with utility-scale efficiency measures, is conceptual: in this approach, people, not cars, become the fundamental unit of transit and land-use planning.

Rethinking business-as-usual could mean revamping building codes to remove barriers for new energy systems, rolling out district and distributed energy generation, or changing provincial legislation-as Alberta has recently done-to allow small-scale producers to sell energy back to the grid.

Those types of initiatives have been successful elsewhere, notably in Germany, which has used feed-in tariffs and other incentives to support a cleantech sector that has grown by 250,000 jobs in five years.  At least one Canadian solar cell company has relocated there to take advantage of the burgeoning market.

In the U.S., a clear focus on alternative energy is emerging. Echoing the advice of financier George Soros, Obama laid out his priorities in a Time magazine interview in October 2008. “There is no better potential driver that pervades all aspects of our economy than a new energy economy,” he said. “That’s going to be my number-one priority when I get into office.”

Our infrastructure spending needs to position us competitively in that economy. How we spend our infrastructure dollars could play a key role in building demand for innovative Canadian alternative energy technologies at home, and preparing them to compete in a growing global market for clean energy technology.

But efficiency is a double-edged sword. In isolation, increasing performance often leads to increased resource consumption. The more efficient a service becomes, the more people tend to use it. Or else resources saved in one place are reinvested elsewhere, spurring further resource consumption. The University of British Columbia’s Dr. William Rees, one of the originators of eco-footprint analysis, warns against what he calls “becoming more sustainably unsustainable.”

We are moving into a period of heightened competition for resources, pressing needs to reduce our demands on the world’s ecosystems, and continued social inequality both at home and abroad. Infrastructure spending isn’t going to solve these problems, but it could play a key role in figuring out how more of us can live well on less.

Keeping these multiple benefits in mind over the next few months and years will serve us well. It’s possible to rapidly reduce the impacts of decades of inefficient development and build communities, countries and economies that will provide liveable and resilient homes for us in the future. Or we could sit back, secure in the fact that things aren’t so bad here in Canada, and watch as the world passes us by.

“The Evergreen Line demonstrates how our Government’s Economic Action Plan is working,” said Prime Minister Stephen Harper at this week’s announcement.  “In the short term, we are creating thousands of direct jobs in the Metro Vancouver economy.  At the same time we are working together to ensure that the local families and businesses have access to an expanded, efficient and environmentally sustainable transit system that will help Vancouver attract and keep the jobs of the future.”

The $1.4-billion project involves the construction of a new 11-kilometre rapid transit line running from the Lougheed Town Centre in Burnaby to the Coquitlam Town Centre, via Port Moody. The system will use the same technology as the SkyTrain and be fully integrated into the existing system, linking directly to the Millennium Line, with connections to the Expo Line, the new Canada Line, the West Coast Express, and regional bus networks.

The Province has committed $410 million to the project, and The South Coast British Columbia Transportation Authority (TransLink) has committed $400 million. Construction is expected to start in 2010 and be completed in 2014. The remaining $173 million will be funded by project partners, including a possible P3 and potentially through transit-oriented land development.

The $33billion in infrastructure spending, over 7 years, and the continuation of the $2billion dollar annual transfer in gas tax revenue have all been on the table since February’s budget. So, no surprises. At the time, announcement of this new spending was well received. Since the 2006 election though, estimates of the infrastructure deficit have more than doubled from $60 billion to the $123billion now quoted by the Federation of Canadian Municipalities. The disjoint between the scale of the problem and the 7 lines on municipal issues in the Conservative platform is glaring. Now that their cards are finally down, it might be a good time to look over what the other parties have on the table.

The NDP does slightly better, with promises of investing the equivalent of 1% of the GST in basic infrastructure as well as affordable housing, child care and other urban issues. In a separate initiative they also plan to restore the building retrofits program, heavily cut by the conservative government, and re-instate the low-income homes retrofit program. (If ever there was an area where you’d get the most bang for your retrofit buck, while also meeting social concerns, this is it. I never could wrap my head around the logic of cutting it.)

The Liberals rise to the top in terms of both spending and a grasp of the importance of municipal issues. Framing it as part of their approach to job creation and economic development they promise: $70 billion over 10 years for infrastructure, including $8 billion for national transit strategy, $10billion for strategic infrastructure (including clean energy grids and waste water treatment) and $3billion for small communities; a special fund if the federal surplus goes over $3billion; and the creation of a new Infrastructure Bank to provide low interest loans to all levels of government for long term green infrastructure projects. There is some unintentional irony in some of the Liberal rhetoric though; they pledge to defeat the infrastructure deficit the same way they did the fiscal deficit — hopefully not, given that cuts made in the 90s to balance the federal budget are part of what got cities into this financial mess in the first place.

As we saw in the debates, with Elizabeth May at its head the Green Party has a knack for getting to the heart of difficult issues. Beyond proposing that 1% of the GST be given to cities, the Green Party platform is the only one to point out that the current taxation system was designed at a time when only 10% of Canadians lived in cities. Today they house 80% of us and receive only 8% of Canadian tax revenue. Along with good ideas to support green transit, prevent sprawl and encourage economic innovation in cities small and large, the Greens are the only ones to propose reforms to the taxation system in the form of new powers allowing municipalities to issue RRSP bonds.

Toronto Mayor David Miller came out in support of the Greens early in the campaign because of its attention to municipal issues, and the Federation of Canadian Municipalities has been working hard to make sure cities get the attention they deserve. Even though they were missed in the debate it seems like the country’s major parties were listening, all that is except for one. We will know in a week whether that will hurt the Conservatives or not.

A report released August 2008 by the Institute for Research on Public Policy estimated Canada needs a $200-billion investment in public infrastructure. University of Waterloo economist James Brox, who led the report, warned the state of Canada's infrastructure is reaching a critical stage.

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.”