8 THURSDAY, NOVEMBER 16, 2017
A SUPPLEMENT TO THE WINNIPEG FREE PRESS
Celebrating 75 GROUNDBREAKING years in 2018
HOW DEEP IS THE HOLE? MANITOBANS NEED HARD NUMBERS
ON THE MAGNITUDE OF PUBLIC INFRASTRUCTURE INVESTMENT DEFICITS
A crumbling street (above) Photo by DAVID LIPNOWSKI/WINNIPEG FREE PRESS Sidewalk construction (below) Photo by WAYNE GLOWACKI/WINNIPEG FREE PRESS
Y ou bump or trip along potholes and crevices as you make your way by street, sidewalk or highway to school, work, pastimes or place of business each day. But do any of us know just how deep is the hole? That sometimes jarring experience is a problem — streets, highways and sidewalks that are in poor condition, or that simply don’t measure up to the needs of a growing population and economy — can do noticeable damage. It can be tough, however, to see the forest for the trees, so to speak. And when it comes to infrastructure — the streets, highways, sidewalks, active transportation facilities and the bridges, underpasses, and water and sewer lines — the ‘forest’ is a gloomy place. This is what we call the “infrastructure investment deficit,” which refers to the cost of repairing existing and building new infrastructure required to keep us moving efficiently and safely. Beyond safety’s sake, seamless and efficient infrastructure is critical to economic growth because it is foundational to the movement of goods to market and people to jobs. In 2011, the City of Winnipeg pegged its infrastructure investment deficit at $7.4 billion, in 2009 dollars. About half of that was calculated from the required repairs and new construction of transportation assets. City council passed in 2013 and 2014 two dedicated tax increases, one per cent annually for local street renewal, and then another one per cent annually for regional roads. Implementation of the two annual taxes was backed by a plan that continued base funding and targeted 2022 as the year at which the city reached a sustainable level of investment. The provincial government, for its part, similarly assesses its infrastructure investment deficit, which informs its budgeting process for its highways and water/
provincial fiscal performance, published in part in the 2018 budget papers, that deferred maintenance accounts for “approximately $8 billion in core government infrastructure alone.” Deferred maintenance does not include the construction of new transportation assets Manitoba needs to stay competitive and ready to take advantage of new trade opportunities at our doorstep. Trade supports more than half of this province’s $65-billion gross domestic product. For example, PTH #75 carries roughly $18 billion of north-south trade between Manitoba and the United States. So where are we? How much will it cost to bring our streets, sidewalks, highways and trade corridors up to shape? That’s a question that both the municipalities and the provincial government must answer. The City of Winnipeg has not published an update of its infrastructure investment deficit since the 2011 report of the Infrastructure Funding Council, which laid out a responsible path to address the hole. That report projected the Manitoba-wide municipal infrastructure deficit would sit at $13.4 billion, by 2021, given the 2011 investment levels. In fairness, Winnipeg has tried to address the investment deficit, with its dedicated taxes and increased budgets for the local and regional street renewal program annually. The provincial government still needs to take that critical first step, making public its valuation of the infrastructure deficit, so we know the challenge before us. Without a benchmark to start from, and then updated regularly taking into account both the work done annually and the changing scope of needs SO WHERE ARE WE? HOW MUCH WILL IT COST TO BRING OUR STREETS, SIDEWALKS, HIGHWAYS AND TRADE CORRIDORS UP TO SHAPE?
for modernization, Winnipeggers and Manitobans are driving, walking and pedaling in the dark. To extend the metaphor, we are blind to whatever pothole or crevice is yawning before us, at our peril. The IFC Report in 2011 had good advice for governments. It recommended that municipalities find economies and efficiencies within their operations in order to direct the financial resources available to core infrastructure. But, more pertinently, the IFC cogently argued the provincial government should “allocate growth taxes and vacate a further portion of education property taxes dedicated through legislation to municipal infrastructure.” This latter recommendation became known as a “new fiscal deal” between the province and municipalities, recognizing the limited revenue capacities of cities and towns, which shoulder responsibility for some 60 per cent of public infrastructure. The federal government has a role to play in the would- be deal, too, through enhanced municipal infrastructure transfers, as part of a national strategy. The IFC warned that “failure to act now saddles the present and future generations with a significant financial burden and unquestionably will lower Manitoba’s standard of living and economic growth.” Manitobans are still awaiting the fix. We know the provincial government is wrestling with deep deficits and rising debt servicing costs. Municipalities are trying to manage amid a new reality, no longer
able to rely upon the predictability of provincial transfers tied to PST revenue growth. But “deferred maintenance” cannot be the strategy for a trade-dependent province like Manitoba. It would, in fact, send us down the road to economic ruin. The first step to a more productive path is to evaluate and make public the infrastructure investment deficits of our municipalities and our provincial government. ❱❱❱
flood capital and maintenance budgets. The previous government never publicly released the infrastructure deficit — even though it exists — , despite repeat requests. We know, however, from the review of
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