July 19, 2012 by Andrew Snook
Permanent, long-term infrastructure programs (LTIP) are good for Canada.
That was the message from the Manitoba Heavy Construction Association (MHCA) at a recent roundtable meeting in Winnipeg, Man. Industry stakeholders discussed the possibility of a permanent LTIP, which would extend beyond the Building Canada plan set to expire in 2014.
According to the MHCA, there is a clear link between investment in infrastructure and Canada’s economic productivity, competitiveness and growth.
“Infrastructure investment is Canada’s economic healthcare program,” stated Chris Lorenc, president of the MHCA.
The MHCA offered various recommendations to Canada’s Minister of State for Transport Steven Fletcher.
One of the recommendations was encouraging LTIP projects to be tendered between October and December and have them awarded in a timely manner. The MHCA suggest this would extend the construction season, as well as reduce workers’ dependence on EI benefits.
According to Lorenc, the Province of Manitoba currently releases schedules of tenders in November and that creates delays to the tender ad date; the awarding of contracts and pushes project start dates later into the construction season.
“Pushing the tender ad date further into the season or delaying the contract award, delays the project start date, which in turn delays employment start, or may cause mid season lay-offs to wait for potential work,” said Lorenc. “It reduces incomes of workers, makes them more likely to be reliant upon EI benefits and clusters projects.”
The clustering of projects drives up demand for building products, which increases project costs.
Another recommendation offered by the MHCA is educating Canadians about the advantages of public-private partnerships (P3s).
Lorenc said many Canadians do not fully understand what P3s are and that the MHCA believe it is the responsibility of the project owners to try and educate the public; however, public officials should be “armed with the facts” and not allow fear mongering to prevent P3s from being an option for funding infrastructure projects.
“P3 Canada suggests that only 20 per cent of infrastructure projects would make sense for a P3 agreement and it is probably right,” said Lorenc.
Other recommendations offered by the MHCA for a permanent LTIP included:
– Transition, over three years, of all federal gas tax revenues dedicated to municipalities to address their collective municipal infrastructure deficit, which the MHCA stated is approximately $243 billion.
– Recognize the clear link between investment in infrastructure and economic growth.
– LTIPs should reflect, “Canada’s commitment to reinvest in the growth of our economy and the capacity to generate wealth with which to fund core social programs that enable our envied quality of life and standard of living.”
The MHCA stated that Manitoba is an important Canadian gateway to global trade, citing key infrastructure investment projects such as: CentrePort Canada Way, which will help launch CentrePort Canada, the country’s first inland port; the development of the Port of Churchill as Canada’s northern gateway; and major highways across the province that help sustain Manitoba’s trade profile.
The heavy construction association added that many of Manitoba’s municipalities will need to invest billions of dollars over the next decade to repair and expand existing infrastructure; and that Canada’s long-term infrastructure program could be an important initiative to help address the infrastructure deficits that most of the province’s municipalities are currently experiencing, while stimulating economic growth and creating jobs.
***In a report sent to government officials in 2001 titled, Solutions Without Costs: Highways Capital Budget, Early Tenders Calls and Multi-Year Capital Planning, the MHCA described the benefits of early tender calls and multi-year capital planning, including: improved ability to forecast the market; extending the construction season in Manitoba from five months to eight months; reduced costs for materials and equipment; improved quality control of construction projects; reduced financial and risk management costs; as well as the ability to create a more stable, efficient and competitive marketplace.