Manitoba Heavy Construction Association

THURSDAY MARCH 23, 2017 3 A SUPPLEMENT TO THE WINNIPEG FREE PRESS 1 2 3 4 5 6 A PERMANENT PROGRAM – no less so than health care, education and public safety A GUIDE FOR INFRASTRUCTURE INVESTMENT MHCA'S SIX PRINCIPLES Primary focus should be to GROW THE ECONOMY EMBRACE INNOVATION in every aspect, including design, financing/funding, procurement, construction, maintenance and rehabilitation Harness PARTNERSHIPS WITH THE PRIVATE SECTOR, the engine of ingenuity Funded by DEDICATED REVENUE STREAMS in support of its purposes Subject to ANNUAL TRANSPARENT REVIEWS for accountability, adjustment and 'discipline to purpose' S omeone once said you know when you've got a budget in your hand because it's a whole lot of numbers. Hit snooze. Yes, if you've cracked a budget you've likely experienced a "near-drowning" — slipping under, amid the pages upon pages of budget lines and columns. Expenditures, revenues. Forecasts. It's tough to discern the 'narrative' as the figures clog the mind. But, there is a story being told within the spending plans. In fact, we see a budget as a report card on a government's performance, achievement and its vision. e public and the heavy construction industry anxiously await what the Pallister government will tell Manitobans about itself in the numbers in its 2017/18 budget, April 11. is provincial government has been clear on its primary goal — to make Manitoba the most improved province while wrestling down the provincial deficit. e Manitoba Heavy Construction Association (MHCA) is all for that. Sustained deficits — almost $1 billion in 2016 — do real damage to a province's finances and its services because in adding to debt, deficits ratchet-up the cost of debt servicing. at debt- servicing, at $874 million in 2016/17, is money that can't be invested in critical services and programs here, in Manitoba. Finance Minister Cameron Friesen has been firm with a lot of sectors. is has sparked talk of 'austerity' but really, his conversations to date have been about 'restraint.' It's an important distinction — these entities are getting less of an increase to their budgets, they have not been delivered severe cuts. e Manitoba heavy construction industry knows restraint. Historically, it has had to fight to get infrastructure the respect it deserves at all levels of government — including federally. e federal government has greater capacity, revenue-wise, to do more of the heavy liing for moving Canada's transportation system to a place it can help us compete, globally, for trade. e public needs to see that reflected in Ottawa's budgets, and in the tri-governmental funding agreements, such as the New Building Canada Fund, under the Trudeau administration. In Manitoba, the budget for roads and other infrastructure moved to an historic high in 2015- 16, an election year, which is unsustainably high in this period of deficit reduction. While the Pallister government has to make tough decisions to avoid another drubbing with the credit-rating agencies — another adjustment downward would see higher interest rates paid on debt — Manitobans also need another sense of security. at is, that their infrastructure funding programs become a permanent, sustained fixture in budgets. e province has committed to investing no less than $1 billion annually in core infrastructure, and $500 million annually in Manitoba Infrastructure's highways capital program. Core infrastructure, as defined in the policy upon which the new point of PST was raised, means: highways, bridges, flood protection, municipal roads, water and sewer, and strategic transportation infrastructure. At a minimum, those levels must be in place to grow the economy, preserve our transportation assets, and to sustain the capacity of the heavy construction industry, which by the way is marshalled on the spot to respond to emergencies — flooding is a real risk this spring, again. Good roads mean good transportation, the foundation of a seamless, efficient trade network and a good trade policy. Trade is the heart of Manitoba's economy. TRADE GENERATES 50 PER CENT OF MANITOBA'S $64-BILLION GDP EACH YEAR; IT ENGAGES 5,200 EMPLOYERS AND 240,000 JOBS. IT SUPPORTS $3.3 BILLION IN PROVINCIAL PAYROLL, OR 16 PER CENT — LARGER THAN HEALTH CARE. Trade generates 50 per cent of Manitoba's $64-billion GDP each year; it engages 5,200 employers and 240,000 jobs. It supports $3.3 billion in provincial payroll, or 16 per cent — larger than health care. at is why the MHCA, on its own and with other business organizations, has been advising the Manitoba government to look upon infrastructure not as spending, but as a necessary investment in the economy and Manitoba's future prosperity. Delayed maintenance or construction of infrastructure becomes exponentially more expensive in future years. More critically, perhaps, is the effect on our economy: Delaying investment in trade-enabling infrastructure acts as a dead weight on the province's ability to meet the challenge and the opportunity of shiing realities of global trade. e MHCA has long held six organizing principles to guide infrastructure investment (see below). Last year, prior to the provincial election, six organizations — MHCA, Business Council of Manitoba, Canadian Manufacturers and Exporters, Manitoba Chambers of Commerce, Manitoba Home Builders' Association and the Winnipeg Chamber of Commerce —produced 7 Pillars to Growing Manitoba's Economy (see Page 5). We hope to see in Budget 2017/18 recognition that the six principles and the seven pillars can support the goals of making Manitoba the most improved province and getting the deficit under control. We hope the budget returns to incremental sustainable increases in the highways programs targeted to investment — not spending — in economic growth. We hope to read of provincial strategies that leverage investment-sharing with federal programs to target nation-building, trade-enabling assets. Trade investment — harnessing, for example, the potential of the New West Partnership Trade Agreement and CentrePort Canada — will help our economy to become the most improved in the country. Infrastructure investment provides the quickest economic growth return and, by extension, revenues returned to the general treasury. Chris Lorenc is the president of the Manitoba Heavy Construction Association. THE STORY BETWEEN THE BUDGET LINES GETTING SUSTAINED INVESTMENT IN CORE INFRASTRUCTURE ON THE BOOKS B Y C H R I S L O R E N C

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