Federal Budget 2016: 'Some Baloney' In Liberals' Claim On Infrastructure Cash

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OTTAWA — "Whatever (commitments) we made in this budget are tied to the (campaign) commitments that we have overall made over the next 10 years, which is to invest $120 billion in infrastructure. Out of that, $60 billion is new money. So, for this budget, there's more than $10 billion for the first two years and we promised $10 billion for the first two years." — Infrastructure Minister Amarjeet Sohi, April 6.

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Did the Liberals' maiden budget deliver on Justin Trudeau's core election campaign promise to create jobs and long-term economic growth by investing heavily in infrastructure?

Sohi insists it did, but the budget itself suggests otherwise.

amarjeet sohi
Infrastructure and Communities Minister Amarjeet Sohi listens to a question during an event in Ottawa, April 5, 2016. (Adrian Wyld/The Canadian Press)

Economists say it's hard to tell because the budget is written in such a way that it can't be directly compared to the platform.

Sohi's calculation includes spending on infrastructure improvements in indigenous communities, which the platform suggested would be additional costs over and above the grand infrastructure plan, as well as some other new spending commitments that weren't even contemplated in the platform.

The Canadian Press Baloney Meter is a dispassionate examination of political statements culminating in a ranking of accuracy on a scale of "no baloney" to "full of baloney" (complete methodology below).

This one earns a rating of "some baloney" — Sohi's statement is partly accurate but important details are missing.

Some baloney

The Facts

During last fall's election campaign, Trudeau vowed to invest an additional $60 billion over 10 years in infrastructure, to be evenly divvied up among three categories: public transit, green infrastructure and social infrastructure.

The platform was precise about how much would be invested in each year of a Liberal government's first mandate: $5.025 billion in 2016-17 (that is, $1.675 billion for each of the three categories), the same again in 2017-18, then $3.4 billion in each of the following two years.

That would translate into a total of $10 billion over the first two years, $16.8 billion over four years.

Those numbers did not materialize in the Liberal government's first budget last month.

Rather, the budget specified that the first phase of the government's infrastructure plan "proposes to provide $11.9 billion over five years, starting right away."

That price tag includes $1.2 billion in social infrastructure investments in indigenous communities and another $2.2 billion for water, wastewater and waste management infrastructure on First Nations reserves.

Yet in the platform, the infrastructure investment plan and spending to improve the quality of life in aboriginal communities were presented in separate chapters, with separate costing. Some of the promises to Aboriginal Peoples were pegged at $275 million in the first year and $575 million in the second year. Other promises, such as ending all boil water advisories on reserves, were not costed in the platform but now seem to have popped up in the budget as social or green infrastructure.

"They're making the number (in the budget)) look bigger for sure by adding in other stuff."

But even if one accepts expanding the infrastructure plan to include campaign promises for Aboriginal Peoples, the budget still doesn't add up to the platform's promise to pump $5 billion into infrastructure in each of the first two years.

For 2016-17, the budget allocates $852 million for public transit, $650 million for green infrastructure and $1.2 billion for social infrastructure — for a total of $2.7 billion. The following year, the budget allocates a total of $3.9 billion.

So how does Sohi come up with more than $10 billion over two years?

The minister's office points to a chart posted on his department's website which, after evidently poring through the budget with a fine-tooth comb, finds infrastructure spending that the budget itself didn't include in its calculations.

The chart comes up with a total of $3.5 billion for infrastructure in 2016-17 and just over $5 billion the following year. And on top of that, it adds "additional infrastructure investments" from the budget that weren't mentioned in the platform: $1.75 billion over two years for strategic infrastructure investments in post-secondary institutions, $2.78 billion for rehabilitating federal buildings and $87 million for rural broadband.

All of which adds up to a grand total of $13.1 billion.

The Experts

Ivey School of Business economist Mike Moffatt, who was a member of Trudeau’s economic advisory council before the election and helped cost the Liberal platform, says the budget is "frustrating" for analysts trying to determine if the Liberals have delivered on their campaign infrastructure promises.

"It's very confusingly laid out," he says. "They have sort of redefined things."

For instance, Moffatt notes, "in the platform, they had the infrastructure and the First Nations as separate line items and now they are sort of lumped together, which kind of makes it again hard to do those apples-to-apples comparisons."

Presenting the infrastructure investments one way in the platform and "a completely different way" in the budget "does make it hard to see whether or not they're living up to their promises," Moffatt added.

Was that deliberate? "Could be."

Former parliamentary budget officer Kevin Page is more blunt, calling the disconnect between platform and budget presentations "confusing and borderline dishonest."

"They're making the number (in the budget)) look bigger for sure by adding in other stuff," he says, adding that Sohi's assertion that they've honoured the campaign commitment of allocating $10 billion over two years for infrastructure contains "some baloney, for sure."

amarjeet sohi
Sohi's assertion the budget delivers more than $10 billion in infrastructure investments is true, but only by adding in a number of items that were categorized differently in the party's platform. (The Canadian Press)

That said, both Page and Moffatt say it's legitimate to count improvements to aboriginal communities or to university research facilities as infrastructure investments, even if they weren't counted that way in the platform. Those are worthwhile projects that can be done immediately, unlike most major infrastructure projects.

Page, who now heads up a centre of excellence at the University of Ottawa devoted to public finance and democratic governance, says he and his team met before the budget with political staff from the Prime Minister's Office, Infrastructure Canada, the Finance Department and Treasury Board. He said it was clear the Liberals were struggling with how to deliver on their infrastructure promises without just throwing money out the door at projects of dubious value.

"They were pretty open with us; they said, you know, when we put in those initial numbers back in the platform ... the amounts of money, the allocations, everything, they said: 'That's just back of the envelope.'"

The Verdict

Sohi's assertion the budget delivers more than $10 billion in infrastructure investments is true, but only by adding in a number of items that were categorized differently or not even mentioned in the Liberal platform. For this reason, there's "some baloney" in his claim that the budget honours the platform commitment to spend $10 billion over two years on infrastructure.

Baloney Scale Chart

Methodology

The Baloney Meter is a project of The Canadian Press that examines the level of accuracy in statements made by politicians. Each claim is researched and assigned a rating based on the following scale:

No baloney — the statement is completely accurate

A little baloney — the statement is mostly accurate but more information is required

Some baloney — the statement is partly accurate but important details are missing

A lot of baloney — the statement is mostly inaccurate but contains elements of truth

Full of baloney — the statement is completely inaccurate

Sources

http://www.budget.gc.ca/2016/docs/plan/ch2-en.html#_Toc446106676

http://www.infrastructure.gc.ca/prog/budget2016-infrastructure-e

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