Canadian Consulting Engineer

Reversal on Strategic Infrastructure Foundation disappointing

The federal government's reversal on its plan to create a Strategic Infrastructure Foundation is disappointing. The decision will likely mean a decrease in the level of investments in infrastructure, ...

March 1, 2002  By Claude Paul Boivin

The federal government’s reversal on its plan to create a Strategic Infrastructure Foundation is disappointing. The decision will likely mean a decrease in the level of investments in infrastructure, at least in the short and medium term. By not going ahead with the foundation, the government is abandoning its plan to invest its annual surplus in infrastructure and in the Africa fund in favour of paying down the national debt. The promised funding for infrastructure projects will now have to come from regular government programs in future budgets over the next six or seven years.

The government’s decision not to go forward with the foundation is disappointing in several other ways. First, the government is missing an opportunity to demonstrate a long-term commitment to infrastructure with a dedicated program that would have a sustainable source of funding. Second, the government is losing a mechanism that would have allowed it to place end-of-the-year federal surpluses in a foundation that could have held and expended moneys into successive years. Third, the foundation offered a unique opportunity to leverage public and private investments in building and modernizing strategic infrastructure facilities across Canada. Fourth, the foundation would have taken the decision-making on major infrastructure investments out of the political domain.

The government’s original plan, announced in the December 10 Budget, called for the establishment of an “arms length” foundation which would have administered at least $2 billion for megaprojects. About $1 billion would have gone to the foundation before the end of this fiscal year, March 31, 2002. As Minister of Infrastructure and Crown Corporations, Deputy Prime Minister John Manley will now assume responsibility for infrastructure investments.

ACEC had developed a strategy to support the government’s legislation that would have established the foundation. ACEC will now concentrate its efforts on urging the government to fulfill, within the original time frame, its $2-billion commitment for large strategic projects and to pursue public and private partnerships.

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