Infrastructure spending regularly takes years to peak
Federal documents show there’s little spending in he first two years.
OTTAWA — Newly released documents show federal infrastructure programs consistently take four or five years to hit their peak spending, with little money spent near the start or end of the programs.
The internal assessment from Infrastructure Canada looked at federal programs over the last decade and found that they top out during their fourth or fifth year, or roughly halfway through their lifespan.
There is little spending in the first two years, the document says.
The internal assessment shows that, between the sixth and tenth year of each program, there is a long, winding-down period with small amounts of spending each year.
The documents obtained by The Canadian Press under the Access to Information Act show that this spending trend held true for both large programs that applied across the country and lesser, community-based programs.
If the trend holds for the new Liberal infrastructure plan, the height of its spending will happen around 2020 or 2021, just after the next scheduled federal election in 2019.
The Liberal government plans to pump $60 billion of new money into federal infrastructure spending over the next 10 years, targeting so-called green infrastructure like sewers and water treatment plants, social infrastructure like affordable housing, daycare and seniors’ residences, as well as public transit.
Details on the plan are expected to be unveiled in the March 22 federal budget. Cities and provinces are waiting to learn what requirements and expectations the Liberals will place on the money and when and how they can apply.
The government plans to use the first two years of the new program to help refurbish existing infrastructure.
It says it hopes that will ensure the money doesn’t sit idle and targets smaller-scale projects that cities can tackle right away, while plans are drafted and submitted for larger, longer-term projects that will have deeper economic spin-offs.
The study says money “rarely flows as anticipated” because projects take years. That leaves Infrastructure Canada with no control over when the money goes out, because that doesn’t happen until a city or province submits receipts for work.
That sometimes makes it seem like the government regularly under-spends infrastructure dollars.
The document says the way the government reports its finances makes it seem that “funds are reduced or declining on a year-to-year basis,” making it necessary for the department to find a new way of receiving and managing funds.
What the department came up with was this: Have Parliament approve legislation that sets aside specific amounts for specific time periods, to eliminate the need for parliamentarians to vote annually on the infrastructure budget, a system similar to the federal gas tax fund. Any money not spent in one year would automatically roll over to the next.
The department didn’t say what became of the assessment. In an email, spokesman James Chow said it was shared with Treasury Board officials “for discussion.”
© 2016 The Canadian Press