With Canada’s economy facing a harder uphill climb than even three months ago, it only makes sense to change gears. Additional and immediate traction is necessary light of the slipping loonie, shaky stock market, skidding oil prices, and a worrying downturn in the value of other commodities.
A faster, bigger investment in much-needed infrastructure might well provide the push the country needs to power through hard times. With that in mind, Canadians should welcome news that the Liberal government is “actively considering” speeding up its promised spending on infrastructure projects.
This would almost certainly result in a higher-than-anticipated deficit next year, but demanding times require bold measures. And there’s no doubt Canada’s prospects are difficult indeed.
Still struggling to cope with a steady erosion of manufacturing jobs in Ontario, the economy has seen oil prices plunge lower than they’ve been in more than a decade. That’s been especially damaging for Alberta, but the effects are spreading across the country.
Other commodities have lost value too, driving down the loonie. It sank below 69 cents U.S. on Friday for the first time since 2003. The stock market is stumbling as well.
A big reason for all this grief is economic turmoil in China, a huge market for Canada’s raw materials. That instability is unlikely to end anytime soon, and it’s impossible for any government in Ottawa to fix.
Federal officials can, however, do more to stimulate economic activity and job creation. That’s where judicious use of infrastructure spending could be particularly useful.
A huge increase in that kind of spending was the main plank in the Liberal campaign platform. But it was meant more as a long-term commitment to address chronic needs than as a speedy response to deteriorating economic conditions.
About $60 billion is to be spent on infrastructure projects over the coming decade. But only about $17.4 billion of that, not even one-third, is planned for the next four years. And stimulus is needed now.
According to The Canadian Press, Prime Minister Justin Trudeau’s government is looking at advancing its original spending schedule, given the worsening economic outlook. An excellent case can be made to do so, provided this fast-tracking could be done without wasting badly needed public funds.
Canadians are sick of seeing their money spent on blatant pork-barreling — such as the $100,000 gazebo built in former industry minister Tony Clement’s riding for an international summit in Huntsville. We don’t need more “infrastructure” like that.
Trudeau is sending promising signals. “We’re going to do this right, we’re going to do this responsibly,” he assured Canadians during his visit to Toronto this week.
There’s certainly no shortage of projects that deserve support. Public transit expansion hasn’t kept pace with rider demand, leading to worsening gridlock in big cities. There’s a crushing shortage of affordable housing. Additional seniors’ facilities are especially required. And municipalities of all sizes are desperate to fix their cracked roads, crumbling sewers, rusting bridges and aging water treatment plants.
Public Safety Minister Ralph Goodale said this past week that a portion of planned infrastructure spending is slated for disaster readiness, helping communities blunt the impact of catastrophes such as floods, ice storms, high winds and forest fires. As well as stimulating the economy and providing jobs, such projects carry the added benefit of mitigating future costs. That’s a significant consideration with global warming expected to generate more frequent and damaging “weather events.”
Given all this pent-up need, there should be projects on the books that could be quickly launched as soon as money is available.
These should be a priority in such difficult economic times. Provinces and municipalities would be wise to bring such initiatives to federal attention. And Ottawa should respond with a speedy review and an open wallet.
There’s nothing wrong with long-term infrastructure spending; indeed, it’s essential. But Canada’s economy needs a jump-start now.