It’s time for Canada to develop a new approach to financing, building and repairing the nation’s aging infrastructure, according to a white paper recently published by the Van Horne Institute.
The Van Horne Institute, a leader in transportation public policy and research, met with key representatives in six Canadian cities: Halifax, Toronto, Calgary, Vancouver, Winnipeg and Montreal. They hope the report will guide policy leaders, especially the federal government which is required by law to review the Canada Transportation Act by June 2015.
“In early February 2013, the Canadian Chamber of Commerce said that, ‘to remain competitive, Canada needs to develop a long-term national infrastructure investment plan that includes strong and diversified funding models and increased private sector investment,’ the report’s authors say.
Of course, truckers already know the state of many of Canada’s roads and also know just how important those roads are to the nation’s commerce.
But with 30 percent of Canada’s infrastructure close to 100 years old, the nation as a whole needs new models of funding.
“How we price infrastructure in Canada was discussed in every city. There was a clear consensus that continued reliance on unpredictable and 'lumpy' government assistance alone for funding infrastructure was not an option,” said Peter Wallis, president and CEO of The Van Horne Institute.
“Most participants agreed that new funding models will, more and more, have to rely on some form of tolling or real-time, dynamic, variable pricing to generate stable, localized revenue streams.”
Even so, tolling was controversial and participants from the trucking and ground shipment sectors, particularly in western Canada, were not happy with road pricing of any kind.
“They argued that adding pricing costs to freight would cause costs to go up for the end user, and to diminish returns on investment in the industry,” the report claims.
“On the other hand, some ground transport shippers were well aware of the negative impact that congestion had on their businesses. It was unclear at the end of our discussions whether ground shippers would tilt in favour of road pricing rather than put up with increasing urban congestion, or vice versa.”
Regardless of which way the scales tilt, there’s something most participants did agree on: “There must be a clear connection between the costs users will face (i.e. tolls or fares) and investments in the infrastructure they choose to utilise. Costs must give rise to benefits. To this end revenue generated in one part of the network should be used to renew or improve that particular aspect of the network.”
Another subject covered by the paper is whether Canada should follow the lead of many other countries and create infrastructure banks or iBanks.
The Van Horne Institute will release a separate paper exclusively about iBanks in January.
