Canadian Consulting Engineer

Infrastructure stimulus projects running close to the wire

The Parliamentary Budget Officer has reported back on the status of projects funded by Canada's Infrastructure...

August 16, 2010   Canadian Consulting Engineer

The Parliamentary Budget Officer has reported back on the status of projects funded by Canada’s Infrastructure Stimulus Fund and found that there is a fair chance that not all the projects will be completed in time to qualify for their funding.
The deadline for projects to receive the funding is March 31 next year. Unless the federal government announces a change of heart, any project that doesn’t meet the March 31, 2011 deadline would lose funding, leaving the municipalities and provinces on the hook for any shortfalls.
After analyzing the data it received in June, the Parliamentary Budget Officer says that in a best case scenario all 2,902 projects that have applied for funding will be completed in time. In a mid-case or baseline scenario, however, 936 of those projects would not be completed in time. In a worst-case scenario, 1,814 projects won’t be completed, leaving the proponents on the hook for approximately $500 million that they would forfeit in infrastructure funds.
“PBO analysis has identified a noticeable delay in project start and end dates against the original projections,” wrote the officer at the beginning of his report, which was released on August 9. “This trend highlights potential risks to ISF program outcomes, including projects not being completed at the March 31, 2011 deadline and a potential lapse of program spending authorities.”
The Budget Officer’s analysis was based on data it received in June, which covered the period up to March 31, 2010 — about half-way through the two-year program which was announced in the government’s Budget 2009 and earmarked $4 billion over two years to help fund “construction-ready” infrastructure projects, mostly being done by municipalities, provinces and territories.
The report included figures for the different types of projects that have applied for infrastructure funding, with water and wastewater projects coming top of the list, at 1,273. Local roads were next, at 1,074 applications, followed by municipal buildings at 322 applications.The Officer found that essentially all the $4 billion has been allocated.
The analysis shows that the summer months this year (June to October) are at the height of the spending curve related to projects receiving the infrastructure stimulus funds, so that  we are now living in the period when most of the jobs and economic spin-offs are being generated.
The Parliamentary Budget Officer is Kevin Page. His office was mandated in 2008 as part of the Library of Parliament to provide an independent analysis to Canada’s Parliament on the state of the nation’s finances, trends in the national economy and government spending estimates.
He said this study was made difficult by inconsistencies in how projects were reported and he pointed out that many project proponents have not yet submitted any reports so his office’s analysis was based on incomplete data.


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