Justin Trudeau smiles from the cabin as he operates a crane at an Oakville campaign stop. (Photo: Paul Chiasson/CP)The second promise would eliminate the requirement of cities to look for a private-sector partner to share the financial risks and windfalls of any project. A paper being released Wednesday by the right-leaning C.D. Howe Institute argues the Liberals should scrap both ideas. Combined, the two ideas would shift the financial risk solely onto taxpayers, who would be on the hook if a project goes over budget, the paper warns. The cost to the economy could negate any of the economic benefits the Liberals hope to gain from billions in infrastructure investments, it adds. Benjamin Dachis, the paper's author, said the government shouldn't give up on trying to "crowd-in" private sector funding for projects, either through a public-private partnership or through a private sector loan. The public purse simply can't finance every single infrastructure project needed in Canada, Dachis said, arguing that the government should only fully fund a project if it is socially worthwhile, but of zero interest to the private sector. "There's a lot of focus right now on 'stimulus,' but what the government should really be focused on is the right projects for the overall economy in the long-term," says Dachis, a senior policy analyst with C.D. Howe.
Justin Trudeau makes an infrastructure announcement on the campaign trail. (Photo: CP)Those projects, he said, may not necessarily be the shovel-ready ones the government wants to target to get infrastructure funds out the door quickly. Although the paper doesn't go into detail about what projects the government should fund, it does recommend making "international gateways" that expand trade a particular area of focus. The government has promised to spend an extra $6 billion a year, on average, over the next 10 years on infrastructure like roads, bridges, water and sewer systems and green energy projects, as well as "social" infrastructure like child care facilities and affordable housing. By the end of the 10 years, the plan would see federal spending on infrastructure reach about $16 billion per year.
"They need to be thinking more of a bottom-up approach where the right projects with the highest rate of return."