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Finance Minister Jim Flaherty presents an update on the government’s Action Plan at the University of Winnipeg. (John Woods)
Finance Minister Jim Flaherty presents an update on the government’s Action Plan at the University of Winnipeg. (John Woods)

Stimulus gamble: How Ottawa saved the economy – and wasted billions Add to ...

“And it’s necessary to do what we’re doing – that is, drive it back to balance.”



Vale Living With Lakes Centre

Laurentian University’s Vale Living With Lakes Centre was the perfect candidate for federal infrastructure money.

Fisheries biologist John Gunn had been toiling for 14 years to find a home for the university’s various water ecology labs and activities. By 2008, he had commitments for $16-million from the university, nickel giant Vale SA and various levels of government. He had architectural drawings and a prominent site on Ramsey Lake near the campus entrance.

But it wasn’t enough. The centre was $5-million short, and the economy was headed south.

Enter the $2-billion Knowledge Infrastructure Program (KIP), part of Ottawa’s Economic Action Plan, announced in early 2009.

“We had already pitched it so many times that our numbers were very accurate,” explained Prof. Gunn, director of the centre. “We had costed out everything and it was ready to go.”

The federal KIP money leveraged a total of more than $5-billion in projects across the country.

Because most schools already had wish-list projects, the rollout was “remarkably quick,” according to Paul Davidson, president of the Association of Universities and Colleges of Canada. Projects were approved between January and June of 2009, with cranes popping up at universities by the summer. Most of the structures were completed by 2011.

“This was smart infrastructure,” Mr. Davidson argued. “It has created a really important legacy on Canadian campuses.”

At Laurentian, the $20-million centre and its cutting-edge labs have become a magnet for talent it never could have attracted, including a National Research Chair in environmental microbiology, along with dozens of researchers and PhD students.

Birch Narrows school

The first reserve community to receive a new school through the stimulus was Birch Narrows, a remote First Nation in northwestern Saskatchewan.

Prior to the stimulus, there was no school on the reserve for Grade 10 and up. Kids in those grades had to take a bus for more than an hour each way to attend an off-reserve school in La Loche. Only about one or two kids from the community were graduating high school each year.

Now with the new $25-million school, the community had 16 new high-school graduates this year and 45 since the new school was built.

“It went really well,” said Chief Robert Sylvester of the construction project, which he said finished ahead of schedule. Still, the chief said it’s a struggle to find the money to operate the school and pay for teachers.

“There’s never enough to keep it running,” he said.

The Bluenose II

The Bluenose is a symbol of pride for Nova Scotia and all of Canada, but the Bluenose II project announced in the early months of stimulus spending is now openly described as a boondoggle.

In Apri,l 2009, Conservative minister Peter MacKay and the then Tory Premier Rodney MacDonald announced $14.4-million to restore the Bluenose II, a 1963 vessel built in honour of the original Bluenose, which was built in 1921 and now graces the Canadian dime.

Nearly five years later, the Bluenose II is not in service and its rising price tag has yet to settle on a final number. The Nova Scotia government has said it will be more than $16-million, while the Canadian Taxpayers’ Federation predicts it will actually cost more than $20-million.

For a while, it was a ship without a rudder. Before the retrofit, the Bluenose II had a wood rudder, like the original. But regulators don’t allow wood rudders any more, and finding a replacement that works with the ship’s design proved to be a major challenge. A further problem is that descendants of the designer of the original Bluenose are suing Nova Scotia for intellectual property infringement and arguing that the government doesn’t have the right to use the term Bluenose. The ship returned to the water in Lunenburg in September after three years in dry dock for repairs, but has not yet been cleared by regulators. The new Liberal Premier, Stephen McNeil, recently called the project a “boondoggle” that should be investigated by the Auditor-General.

“Embarrassing, in a word,” said Nova Scotia Senator Wilfred Moore, who represents the region and was a volunteer fundraiser for maintenance of the Bluenose II prior to the stimulus announcement.

“Around Lunenburg, they’re embarrassed about it,” he said, listing the rising cost, delays and mistakes that needed to be fixed. “You’ve got a pretty proud community. They’re used to building boats and doing well, so it’s not sitting very well. This is too bad.”

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