Canadians’ quality of life is threatened by a spending shortfall of up to $125 billion needed for public transit, roads, water, sewers and other public infrastructure, TD Bank said Thursday.
“We believe neglect of the country’s stock of public capital is one of the greatest risks facing the country’s quality of life,” TD chief economist Don Drummond said in a special report.
“Without a top-notch infrastructure, it will become difficult to ensure the health, safety and security of the nation’s citizens.”
The report is part of a series of commentaries on public policy by the bank.
The reort said Canadian governments have increased capital spending over the past four to five years. but “the new investments have only put a modest dent in a problem that has been allowed to accumulate over two decades.”
According to TD Economics, it’s difficult to measure the dollar value on the backlog of deferred maintenance, rehabilitation, and replacement – the so-called infrastructure gap – but the report said researchers estimate it’s between $50 billion and $125 billion.
“To put some context around it, the amount of the gap is roughly six to 10 times annual Canadian investment in public infrastructure,” Drummond said.
The report proposes a four-part strategy to deal with the problem:
- Make users pay more, particularly for services where consumption can be easily monitored and measured. Roads, bridges, water, sewers, electricity, and garbage collection were listed as examples.
- Give city governments the right tools and powers, such as broader latitude to raise debt or access to revenues from gasoline taxes.
- Increase private-sector involvement in public infrastructure.
- More federal resources, including spending and co-ordination.
At the same time, Drummond said he would like to see the government improve its decision-making process.
“We support the creation of an independent board to provide advice to the government on what type of infrastructure should be financed and how,” he said.