"Infrastructure pays off, StatsCan says," by Eric Beauchesne (Vancouver Sun) - The Diigo Meta page

• 17 Apr 08
  

  Yule Heibel

  Beauchesne's article describes the benefits (in rates of return to communities) when infrastructure is maintained/ upgraded, and presents an argument by municipalities to the Federal government to cough up more funding.
  
  Since it's a newspaper article, the link will no doubt break after a few months, so I'll annotate all of it (thereby creating an archived version). The article continues over 2 webpages, but I'll only bookmark the first page; below is the 2nd part of the article, next page (not bookmarked):
  QUOTE
  "Infrastructure is an enabling input for the economy that facilitates the flow of goods and people," it noted, "It is one of the cornerstones upon which the private sector operates.
  
  It's also a large part of the country's capital stock, amounting to 28 per cent of the capital stock in the private sector.
  
  And the rate of growth in the economy and the stock in public infrastructure are "closely related over time," it said, suggesting that as one of the two grows so does the other.
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  "Public infrastructure provides support for businesses and individuals," it noted. "Over time, the expanding stock of infrastructure in Canada closely matches trend changes in real GDP, aside from the recessions of the early 1980s and 1990s."
  UNQUOTE

  municipal_funding infrastructure_funding canada cities

  • Infrastructure pays off, StatsCan says

    Eric Beauchesne,
    Canwest News Service

    Published: Wednesday, April 16, 2008

    OTTAWA -- The rate of return to businesses and individuals of government investment in infrastructure, such as roads, bridges and sewers, is at least as great as the government's cost of raising the funds for that investment, a new Statistics Canada study suggests.

  • "Public infrastructure, the roads and water and sewer systems that comprise the foundation of Canada's economy, provided a rate of return to public capital at least as high as the government long-term bond yield over the period from 1961 to 2005," according to a summary of the study, which estimated that return "centres" on an annual average of 17 per cent.

    The findings support the case for more such investment, a labour economist argued.

  • 6 more annotations...
  • • "Since the long-term economic benefits of infrastructure significantly exceed the financing costs, Canadian governments should be undertaking more public investment," said Erin Weir, an economist with the United Steelworkers.
    • But there would be an "added bonus" to such investment at a time when economic growth is slowing, as is occurring now, Weir added.

      • 

        Yule Heibel on 2008-04-17

        WPA, anyone?

    • "Although we also need interest rate cuts, there is legitimate doubt about how quickly lower rates from the Bank of Canada will translate into lower borrowing rates for consumers and businesses," Weir said. "In this context of financial uncertainty, direct public investment becomes even more important as a potential source of economic stimulus.

      "Infrastructure investment would be a particularly effective type of stimulus because it would necessarily create employment in Canada," he added, noting the construction work would have to be done here and that many of the materials used in construction, such as concrete, would be produced here as well because it is impractical to import them.

    • Further, such investment would help reduce what the Federation of Canadian Municipalities has said is a $123-billion infrastructure deficit that has left Canada's water-treatment facilities, roads and public infrastructure is on the verge of collapse.

      • 

        Yule Heibel on 2008-04-17

        So let's get this fixed!

    • The federation released poll results Tuesday that it said "shows Canadians overwhelmingly want the federal government to provide greater financial support to municipal governments."

      "More than 90 per cent say the federal government should help municipal governments deal with infrastructure issues, a view shared across the country, including in Quebec and Alberta," the federation said.

    • The opposition Liberals also say the federal Conservative government should have spent most of last year's $10.2-billion budget surplus on upgrading the country's public infrastructure rather than paying down more debt.

      Under the Liberal plan, any surplus greater than $3 billion -- which would be used for debt repayment if not needed for emergencies -- would be added to the $33 billion the government has already committed to infrastructure from 2007-2014.

      While the author of the Statistics Canada report, economist Ryan Macdonald, said the study didn't attempt to measure whether there was a net benefit to government investment in infrastructure, it did stress the importance of such investment to the economy.

Public Stiky Notes

• 
  Yule Heibel on 2008-04-17
  WPA, anyone?
• 
  Yule Heibel on 2008-04-17
  So let's get this fixed!

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