Five touchstones for Canadian governments making infrastructure decisions - Canadian Government Executive
Best PracticeGovernment
June 15, 2018

Five touchstones for Canadian governments making infrastructure decisions

With the launch of the Canada Infrastructure Bank and US Congressional interest in Trump’s “trillion dollar” infrastructure promise, coupled with a widespread political appetite for infrastructure spending, it would be easy to be swept away in all the enthusiasm.  But policymakers across North America need to think hard and clearly about infrastructure choices.

Contemporary research suggests five “touchstones”:

  • Not all infrastructure is equal – pick the right projects and the right partners;
  • Don’t just build the right infrastructure, build it right – infrastructure is part of the fast-evolving world of technology;
  • Be cautious about replacing infrastructure that is in a state of flux – select infrastructure that will serve the future, not just the present (or the past);
  • Pick the right planning horizon and the right scale – while the four-year electoral cycle may be too short, a timeframe set by the useful life of heavy infrastructure may be too long; local infrastructure may be inefficient, while regional solutions may provide economies of scale and in-depth capacity; and,
  • Link infrastructure to other social goals – economic productivity, social inclusion, community building, technological innovation, et cetera.

And that’s not an exhaustive list.

Infrastructure decisions are big and long-lived decisions.  They add to debt and deficits – but they can also set economic directions, enhance productivity and environmental protection, and improve quality of life for individuals and communities.  The price tags can be large: but expensive infrastructure projects of the past now often seem like prudent investments.  Of course, the reverse is also true: while wise, future-oriented infrastructure decisions can serve us for generations, short-sighted or wasteful infrastructure choices can be a burden for decades, eroding both capital budgets and public support.

Let’s look at the five touchstones in turn.

Not all infrastructure is equal

The case for infrastructure has many champions: those looking to restore deteriorated systems, and those proposing new facilities and services to serve future needs; those who have a solid business case, and those who see political advantage; those who want to modernize, and those who want to memorialize.  It can be hard to differentiate.

Some infrastructure projects attract private capital, or allow its cost to be shared over its useful life by all those who will use it.  Some infrastructure has a leap-of-faith dimension, or is built to “create a market”, such as our past experience with rural electrification or building transcontinental railways.  Proposals to upgrade VIA Rail Canada speed and service frequencies, or to extend 4G mobile broadband to rural areas, or to improve port-centred intermodal shipping in Canada may provide the foundation and set the stage for ongoing operational or even commercial viability.

Don’t just build the right infrastructure – build it right

Infrastructure is part of the fast-evolving world of technology.  It is also affected by other so-called “megatrends” – social, environmental, fiscal, political and of course, economic.  A traditional infrastructure facility may have a life expectancy of fifty years, but changing markets, urban conditions and technological innovation may argue for a shorter time horizon.  Consider that twenty years ago there were no iPhones, no Twitter, little digital commerce, no 911 preoccupations and fossil fuels were the incontestable fuel source for vehicles.  Looking into the future can be problematic, but building infrastructure based on past practice can be equally wasteful and shortsighted.

The use of nano-sensors, the RFID / Internet of Things (IoT), transponders, new construction techniques and materials, and the challenges of climate-change resilience should radically alter the infrastructure of the near future, including how it is designed, procured and financed.   Should bridges, social housing units, long-term care beds and elementary schools continue to be built and rebuilt piecemeal?  Or, will they be “bundled” for design, financing and delivery earlier and at lower cost?  Will more and increasingly expensive acute care hospital facilities continue to be the way to deal with the wave of chronic diseases among Boomers?  Will we need as many conventional post-secondary campuses and programs, when the world’s best thinkers and researchers are as close as your smartphone, and businesses cannot recruit technical workers with contemporary skills for the digital age?

Developing criteria, using evidence and business cases, and greater respect for expertise and investment in areas like transportation planning and project financing, would help to preserve and target infrastructure budgets that, while seemingly large, do not begin to address the full scope of all requests.  The role of the private sector is viewed with suspicion in some quarters.  But well-structured public-private partnerships have demonstrated their capacity to get things done, on time and on budget, while still preserving the public interest, if properly regulated and if the risks are property allocated.  Public-private partnerships also have great potential to attract investment by public-sector pension funds, which invest billions in infrastructure around the globe.  To make that possible, we may need to recognize that infrastructure is neither a social service nor an income redistribution mechanism, and should be paid for by those who use it and regulated accordingly.

Be cautious about replacing infrastructure that is in a state of flux

As Walter Gretsky famously told his son: “Skate to where the puck is going to be”.   Infrastructure must be selected to serve the future needs, not just those of present (or the past).  As billions are earmarked for public transit, built around a model that London and New York pioneered in the 19th century, the impact of disruptive technologies on such projects must be more explicitly addressed, notably the so-called first and last kilometre facing commuters and other travellers.  Automated vehicles, ride-sharing and shuttles, universal cycling infrastructure, way-finding technologies, and intelligent transportation systems will disrupt everything from municipal transit and roadway design, to community planning and housing affordability and availability.

Pick the right planning horizon and the right scale

While the four-year electoral cycle may be too short, letting the useful life of infrastructure determine its planning horizon may be equally flawed.  Modern infrastructure will have to meet future needs we cannot know with certainty.  The capacity to produce “light” infrastructure, with lower cost and shorter life-expectancy may allow (or require) infrastructure to be repurposed, recycled, or adapted to changing market conditions, economic and fiscal imperatives, and consumer preferences.   Innovations like locally generated electricity, drone and dirigible applications in heavy construction and rural “product fulfillment”, and rural mobile broadband may well transform much of Canada’s rural and northern landscape and its economy.

While infrastructure conjures up visions of dams and power grids, 60 per cent of Canada’s infrastructure is in the hands of local authorities, and much of it was built on a very local scale.  In the 21st century, Canadians will increasingly live “regionally”, reflecting the nature of the global economy, transportation-enabled social interaction, and regional ecological systems, like watersheds.  Where some local infrastructure may be inefficient now or in the future, regional and commercial solutions may provide economies of scale and in-depth capacity, for everything from water, wastewater and transport systems to the organization and design of First Nations communities and their regional economies.

Link infrastructure to other policy goals

Building infrastructure makes a major claim on public finances and on the patience of the people and businesses that must await its arrival and endure its construction.  Infrastructure projects can improve economic productivity, generate collateral economic activity, promote social inclusion and minority employment, and aid community building and technological innovation.  Community benefit agreements and community impact agreements have demonstrated their value in leveraging public investment in infrastructure and in earning the “social license” for major infrastructure projects.

Infrastructure projects can also stumble when planning, environmental assessment and decision-making processes designed for a by-gone era impede the ability to make the evidence-based, correct infrastructure choices and speed them to completion with a minimum of delay and disruption.  Recent history is replete with instances where political preferences, aesthetic considerations or parochial interests have added unnecessarily to construction or operating costs, or impaired operational performance, or rejected potential to generate sustainable, regulated revenues.

Using these five touchstones, policymakers in government and beyond have the opportunity to design infrastructure programs and deliver infrastructure projects that will serve all Canadians for years to come.

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