Why did the infrastructure commitment stall? WTF?

The Liberals’ election promises were clear.  The way out of the economic stagnation of the last number of years lay in giving our country a serious dose of stimulus spending.  And the place to spend that money was in addressing the massive infrastructure deficit.  Not afraid of going into a budgetary deficit, the promise laid the path to their election win.

The Greens agreed with the analysis and the prescription.  The difference lay in how we approached paying for the stimulus.  Our platform called for massive infrastructure spending as well.  We managed to balance the budget by increasing the taxation rates for the largest most profitable corporations, going after tax havens, killing perverse subsidies and taxation of newly legalized cannabis sales.

But Greens were never rigid about balanced budgets.  As I pointed out in the Maclean’s debate, a few billion dollars deficit in an economy approaching the two trillion dollar mark is not something to become alarmed about.  Even thirty billion is not an alarming deficit. In fact, with interest rates so low, it makes sense for government to borrow now to invest in our national future well-being.

Given that dramatic commitment and the election results, I expected to be impressed with the 2016 budgetary commitment to municipal infrastructure.  I expected to see large investments in those types of activities that produce the greatest number of jobs.  In this I was disappointed.  The most one can say about the pledges in the short term is that they represent a good start.

As many commentators have noted, the Liberals’ budgetary commitments for infrastructure over the next three years are relatively modest.  The overall promise sounds bold: “In Budget 2016, the Government will implement an historic plan to invest more than $120 billion over ten years…” until you look at the details.  By far, the biggest boost in infrastructure spending does not kick in for six years, with the bulk of the investments coming in years 7-10.

The first phase, over the next five years, is for $11.9 billion. There are large (and needed investments) in social housing ($3.4 billion), $5 billion on water and waste water, and only $3.4 billion in public transit.  The public transit money runs over three years but in the first year, only $852 million is allocated.  Given the desperate need for improvements in public transit to meet the climate targets set by the Paris agreement, and given the employment generating impact of such spending, it is not only surprising, it is counter-intuitive that spending is held to such an anemic level.  Even more distressing is the failure to make any commitments to attacking the 30% of Greenhouse Gases that are emitted from leaky buildings.  An army of carpenters, contractors, electricians and plumbers are needed to upgrade our homes, commercial and institutional buildings.  The 2005 budget under former Liberal Finance Minister Ralph Goodale, was the last good budget before the ten years of Conservative rule.  Goodale’s budget brought us the hugely popular energy efficiency retrofit programme – Eco-Energy.  Why the new Liberal government did not renew and expand that programme is unfathomable. The economic stimulus impact is about the best bang for buck of any possible government investment.  Local purchases at building supply retail outlets, matched with work for skilled trades and their growing teams of workers and apprentices are nothing but positive.  Add in to that the fact that the bulk of the spending incentivized by the programme comes from homeowners themselves.

It still makes sense for the government to come back to these policies in the 2017 budget and make the needed investments.  Take it beyond the 2005 vision of Eco-Energy to assist universities, schools and hospitals to improve their energy efficiency and reduce the carrying costs of their buildings.  Model it on the hugely successful revolving funds for climate action created under previous Finance Minister Paul Martin.  Martin spun off a significant investment in the Federation of Canadian Municipalities to run the programme “Partners in Climate Protection.” It is still funding upgrades and better building and lighting fifteen years later.    Money lent to fund the energy efficiency improvements is paid back as soon as the energy savings pay for the cost of the upgrades.

As well, it is time to start thinking ahead to the inevitable disaster that will hit the West Coast when the energy of the Cascadia Fault (off the coast of Washington State and British Columbia) releases itself in a major subduction event.  Thousands of lives could be saved if we only had the foresight to invest in residential seismic upgrades.  Like the Eco-Energy programme, these investments could be incentivized by a government programme, but largely paid for by the homeowners.

The horrible reality is that the 2016 budget delivers a large deficit, but without the kind of investments necessary to stimulate the economy to ensure the national finances are strong enough in seven years to close the deal.  Meanwhile, the climate crisis is galloping along, overtaking the four horsemen of apocalypse, while governments at all levels seem to think there is time to avoid climate disaster at a leisurely pace.

It reminds me of the themed protest of the U.N. climate negotiations in 2013 in Warsaw.  Everywhere you looked were buttons and banners proclaiming “WTF?” Translation: “Where’s the Financing?”