Closing the infrastructure gap is about more than just money

Globally, closing the infrastructure gap has been a focus of national and international dialogues for decades. Most recently, the federal government committed to closing the infrastructure gap for First Nations in Canada by 2030. However, in this Canadian context, discussions on aging infrastructure and infrastructure investments have yielded debates from all sides for as long as anyone can remember. Infrastructure investments have long been touted as an engine of economic stimulus. In the 1960s and 1970s, infrastructure spending was at an all-time high during a period of significant population growth and equally strong economic growth. Historically, large-scale infrastructure investments have occurred following disaster-related events, as well as during important economic events in Canadian history. Investments in infrastructure can be seen during economic pinch-points like the 2008 recession, or most recently the COVID-19 pandemic; but they can also be seen during times of economic prosperity, with investments in infrastructure historically increasing in parallel to increasing oil revenues. Kerry Black is an assistant professor and Canada Research Chair at the University of Calgary’s Schulich School of Engineering. Photograph courtesy of Kerry Black A 2013 report from the Canadian Centre for Policy Alternatives showed that public investment in infrastructure peaked in the late 1950s at three per cent of the GDP, and has steadily decreased until the mid-2000s. In that same time, infrastructure asset shares have shifted from predominantly federally owned assets, to majority municipality-owned assets. This shift is significant in the context of who shares the ultimate burden, with municipalities with small revenue bases bearing the brunt of the load when it comes to infrastructure spending. This has resulted in a significant infrastructure gap in many Canadian municipalities, with the rural and remote communities facing markedly higher impacts ranging from dilapidated and inadequate infrastructure, to the absence of critical infrastructure entirely. We know that investments in infrastructure are essential. For every dollar that is invested into resilient infrastructure, it is estimated that an average of $3-$5 is saved on post-disaster reconstruction. Investments in infrastructure benefit the larger GDP, and serve to stimulate the economy. This relationship has been attributed to Keynesian economics, whereby when a recession occurs, the economy becomes stuck in a self-sustaining cycle marked by high unemployment and a stagnant GDP. According to Keynesian theory, one alternative is to overcome a lack of private-sector demand through public-sector deficit spending to help “stimulate” the economy. This deficit spending has typically been applied to outputs like building infrastructure. The return on the dollar is often higher in areas that have been historically excluded from investment. Indigenous communities in Canada are disproportionately affected by inadequate and obsolete infrastructure as a result of chronic underfunding. The federal government’s commitment to close the infrastructure gap by 2030 is a direct response to decades-long advocacy from First Nations across Canada demanding increased investments in infrastructure that has exacerbated the health and economic gap that exist between Indigenous and non-Indigenous peoples in Canada. These investments in infrastructure are more than just dollars and cents; for every dollar invested in infrastructure in Indigenous communities, there’s an estimated 17 per cent increase in employment levels, productivity, and earned wages. These benefits are not just seen within Indigenous communities, but also have very real and positive impacts on the larger Canadian economy. What is most important to note is that whereas our approach to infrastructure investments has been largely reactive, a proactive response requires an understanding that this funding is critical to sustainable and resilient community development, and the broader health and well-being of citizens. A return to sustained and increased federal infrastructure spending is necessary to building a strong and resilient economy. These decisions must be supported by provincial and municipal governments, and must prioritize Indigenous communities in order to adequately address the issues of funding inequality that have exacerbated the infrastructure gap in Indigenous communities in Canada. When we prioritize infrastructure, we are investing in the communities in which we live, and in the people who call them home. It’s about much more than just money. Kerry Black, PhD, P.Eng., is an assistant professor and Canada Research Chair in the department of civil engineering at the University of Calgary’s Schulich School of Engineering. Her work focuses on sustainable infrastructure and community development. The Hill Times

Closing the infrastructure gap is about more than just money

When we prioritize infrastructure, we are investing in the communities in which we live, and in the people who call them home.

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Closing the infrastructure gap is about more than just money

When we prioritize infrastructure, we are investing in the communities in which we live, and in the people who call them home.

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