Don’t rush federal infrastructure spending

Government should always seek to get the best value on behalf of all taxpayers

By Aaron Wudrick

An uncontroversial principle of governance is treating public dollars with respect: whatever a government’s spending priorities, it should always seek to get the best value on behalf of all taxpayers.

This process can take time, since assessing the value of a proposed program or project is rarely doable overnight. Canadians should therefore be concerned that ‘how fast can we get money out the door?’ appears to be the biggest question currently vexing the new Trudeau government in Ottawa.

Recent headlines have even suggested that Finance Minister Bill Morneau is under “pressure” to skip the usual parliamentary pre-budget hearings in the run-up to the government’s first budget, expected sometime in March. (A closer look reveals this “pressure” amounts to ‘questions from reporters’ together with self-interested experts urging more spending as quickly as possible. The minister may as well ask a panel of dogs if more bones should be handed out.)

But the hurry to spend is only half the problem: also buried in this rush to turn on the taps has been a subtle, but major shift in the objective of the Liberals’ infrastructure plans. All of a sudden the talk is about “stimulus” – a word which appears nowhere in the Liberal platform, and was never intended to be the objective of the Liberals’ deficit-financed infrastructure spending.

Indeed, the Minister himself has repeatedly stated that long-term growth is the government’s main priority.

So why is this a problem? Why not kill two birds with one stone? After all, if we have to build a bridge next year, why not just build it right now?

The answer is that there’s no guarantee that the “right” projects to invest in are also ones that are “shovel-ready.” It’s entirely possible that months (if not years) will be necessary to properly identify infrastructure that is truly the most important for the long-run.

These considerations conflict with the very different objective of getting money out the door as soon as possible – and it would seem rather obvious that one of the surest ways for a government to waste taxpayer dollars is to hurry to spend it.

The reality is there is no burning urgency. The government would have us believe that spending a few billion dollars a few months sooner will somehow dramatically improve Canada’s economic prospects. Does anyone really believe this?

The Harper government made a similar claim following its own plunge into deficit in 2009, yet the Fraser Institute’s analysis of Statistics Canada’s data shows that the Conservatives’ “Economic Action Plan” had next to no impact on the economy, with the turnaround in the economy overwhelmingly due to increased private sector investment and increased exports. The price of this ill-advised misadventure was six years climbing out a deep deficit hole, and more than $150 billion added to our federal debt.

The Trudeau government can reasonably claim it was elected to implement different policies than their predecessors. So it is utterly strange that their plan now appears to be to essentially cut and paste the Harper government’s approach – one which they (rightly) criticized while in opposition.

Infrastructure investments need to be considered carefully, prioritized and selected for the long-term benefits they bring. Conflating this goal with “stimulating” the economy is asking for trouble, and a recipe for pork-barrelling and waste. The Trudeau government should resist calls to spend faster, and focus on spending wisely.

Aaron Wudrick is Federal Director, Canadian Taxpayers Federation

(This column originally appeared in the Toronto Sun on January 25, 2016)