Federal government still $2B shy of spending targets under sprawling infrastructure program: report
OTTAWA — More than four years into the Liberal government’s infrastructure program, spending on projects remains $2 billion shy of its target, according to a new report released Wednesday.
The Parliamentary Budget Officer found that total spending under Ottawa’s sprawling $187-billion infrastructure program has now reached $51 billion, or roughly $2 billion less than projected in 2019. Compared with 2016 estimates, which projected that spending would have reached $59 billion by now, total spending is $8 billion shy of targets.
The economic boost from the program, at 0.74 per cent of GDP, is also below earlier projections, which the study said was “primarily attributable to delays in the roll-out of the program.”
The report comes as Infrastructure Minister Catherine McKenna promises to quickly funnel $33.5-billion into so-called “shovel ready” infrastructure projects as part of an effort to stimulate the economy following the COVID-19 pandemic. Ottawa, the provinces, and the private sector are still negotiating the terms of the new spending arrangement.
The $33.5 billion is entirely made up of existing funds, but Ottawa will cover a much higher share of project costs under the new plans in order to help cash-strapped provinces and municipalities build critical infrastructure. Ottawa is expected to pay 80 per cent of project costs, up from an earlier portion of around 30 per cent.
Prime Minster Justin Trudeau promised to increase funding for infrastructure as part of his 2015 election campaign, saying his government would run deficits in order to fund “transformative” projects like urban rail developments, solar farms, and port expansions, among other things.
But spending was delayed early in the rollout of the program, forcing Ottawa to push billions of dollars worth of expenditures into future years.
Phase one of the program included $14 billion that was expected to be spent within an 18-month window, beginning in 2016. Today, that initial $14 billion won’t be spent until 2022 at the earliest, according to the 2019 budget.
The PBO report on Wednesday also clarified questions that have been raised by opposition MPs in recent weeks, over why 20,000 of the total 53,000 projects under the program remain unaccounted for.
The study finds that 12,000 of the missing projects fall under the Gas Tax Fund, a federal transfer program that does not provide a centralized database of projects. The fund was established well before the Liberal infrastructure program, and provides funding directly to municipalities for infrastructure projects.
Cities and towns that use the funds must sign an attestation that the money is used for infrastructure, but reporting requirements under the GTF are lower than conventional federally-funded projects.
The other 8,500 projects are women’s shelters that fall under the purview of the Canada Mortgage and Housing Corporation (CMHC). The housing agency said it withholds certain project-level details on the 8,500 shelters to protect the safety of women fleeing domestic abuse. Expenditures on the shelters are audited by a third party in order to ensure compliance, it said.
“To protect privacy of individuals and the security of survivors of domestic violence, provinces and territories submit aggregated claim information for some projects,” the CMHC said in a written response to the National Post.
In a committee meeting on Tuesday, Finance Canada official Evelyn Dancy said more transparent reporting on infrastructure projects was “continually an area of improvement that we are working on.” Reporting of projects primarily rests with the infrastructure department under McKenna.
