New procurement and financing approaches needed to close infrastructure gap in Canada’s Northern and Aboriginal communities

A long list of infrastructure concerns in Canada’s Northern and Aboriginal communities needs to be addressed, from poor access to basic amenities such as clean water, sewage treatment, and waste management systems to transportation and telecommunications. A new report by The Conference Board of Canada suggests that governments should be more open to private sector and Aboriginal participation to help close the infrastructure gap in a timely and efficient way.

“The isolated location of many Aboriginal communities substantially raises the costs and complexity of infrastructure construction projects. Limited transportation links, shorter building seasons, and harsh climate conditions present unique challenges to infrastructure planning, financing, operation and maintenance,” said Christopher Duschenes, Director, Northern and Aboriginal Policy, The Conference Board of Canada. “Closing the infrastructure gap is a huge undertaking and new infrastructure procurement and financing options are needed to help move this critical agenda forward. The public sector will not be in a position to assume full responsibility for the required infrastructure projects to close the gap.”

Highlights

• Public infrastructure procurement and financing must be more open to private sector and Aboriginal participation to effectively address the issue.
• Geography will always present important constraints.
• Aboriginal financial institutions and some of the major banks in Canada have facilities to support Aboriginal participation in major infrastructure projects but these need to be explored in more detail.
• There is a need for on-going dialogue and coordination around this issue.

Indigenous and Northern Affairs Canada (INAC) has calculated that the infrastructure gap on First Nation reserves alone is expected to reach $9.7 billion by 2018. This number only addresses existing infrastructure needs, such as power, transport and communications. New infrastructure, including broadband connectivity, renewable energy, and regional transportation corridors that could catalyze greater economic and social development is not factored in.

Re-Thinking Infrastructure Financing for Canada’s Northern and Aboriginal Communities proposes that alternative procurement models are needed and would allow the private sector greater opportunity to take the lead on designing innovative solutions to infrastructure challenges. Alternative modes of transport, such as airships and drones, advances in modular housing design, and the application of smart micro-grid technologies for electricity and connectivity are a few of the creative solutions that could become more readily available under private sector leadership.

The report also suggests that Aboriginal communities and businesses need greater opportunities to invest in and become more involved with infrastructure development. Aboriginal financial institutions have developed programs to encourage Aboriginal participation in procurement and development by assisting businesses and communities to build their portfolios and improve their creditworthiness. Many of Canada’s leading banks also now offer Aboriginal banking services and related infrastructure financing options.

“The goal is to rethink how we pay for infrastructure, and encourage greater involvement from Aboriginal communities and the private sector,” added Duschenes.

The findings in this report are based on a roundtable hosted by The Conference Board of Canada and The Canadian Council for Public-Private Partnerships, which brought together experts from the public and private sectors to discuss how new approaches to procurement and financing could help close Canada’s Northern and Aboriginal infrastructure gaps.

An associated Conference Board of Canada report, P3s and Transportation Infrastructure: Experience and Opportunities for Canada’s North, explores the Canadian experience with public-private partnerships for transport infrastructure relevant to Northern contexts.

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SOURCE Conference Board of Canada