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Canadian Prime Minister Stephen Harper makes a policy statement promising federal funding for a Toronto transit project during a speech at a Toronto Transit Commission depot on June 18. (Chris Young/THE CANADIAN PRESS)
Canadian Prime Minister Stephen Harper makes a policy statement promising federal funding for a Toronto transit project during a speech at a Toronto Transit Commission depot on June 18. (Chris Young/THE CANADIAN PRESS)

Canada must do more to keep cities moving, executives say Add to ...

Strong municipal infrastructure is critical to attracting people to our economic hubs, improving the quality of life for our work force and remaining globally competitive. However, according to this quarter’s C-Suite survey, Canada is only partly succeeding in addressing these needs, despite a growing focus by all levels of government on this backbone of our economy.

The majority of executives interviewed believe our major cities’ airports, electrical grids and telecommunications infrastructure is stable, but they felt transportation was lagging, needing significant improvements to roads, bridges, transit and highways. Moreover, most indicated that their businesses would benefit if such investments were made.

There’s no doubt that Canada’s municipalities are on board with the need to improve infrastructure. Our cities and governments are looking at ways to address transit and transportation issues that increasingly threaten to affect the economy. Toronto, for example, despite its ongoing efforts to address transit and traffic issues, still has the longest commute times in North America next to New York.

Why are some areas doing better than others? And what can be done to balance investment and results? Telecoms and airports are private or quasi-private entities and have benefited from ongoing spending over time. But in predominantly public assets, such as highways and transit, decades of underinvestment, combined with increased population density, is placing great strain on the infrastructure that is necessary to support the economic aspirations of our communities.

Governments have a number of options. On the financing side, public-private partnerships allow them to simultaneously transfer project risk and access private sector capital. New sources of revenue are often required and while never popular, several alternatives have proved very effective both here in Canada and abroad – including taxes (property, payroll, gas); congestion pricing (downtown vehicle access fees); and direct user fees, such as tolls.

The number of toll roads is on the rise, with governments hoping to use the funds raised to invest in new and existing infrastructure. Another option is to monetize existing assets and invest the money in infrastructure, as is being considered across the country and around the world.

Governments at all levels are making infrastructure, and in particular investment in transit, a priority. Earlier this month, Ottawa announced details of its public-transit fund that was created in order to reduce congestion and travel times, while supporting economic growth in the country’s largest cities. The evidence from our survey is clear – Canada’s C-suite strongly supports this kind of investment, with 62 per cent feeling the sector remains underfunded.

Government is beginning to focus on the issue, to ensure the growing infrastructure needs of our communities are met, enabling economic growth for generations to come.

Brad Watson is a partner with KPMG and the national practice leader for infrastructure in Canada.

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