Skip to main content
growth and productivity

Morning traffic on the Gardiner Expressway in Toronto. According to the Business Council of Canada, it may require an investment of $150-million to $1-trillion to make the Canadian economy run with optimal productivity and efficiency.Fred Lum/The Globe and Mail

If you're reading this while waiting for a bus or a train or a shipment of goods – or a download – then you'll understand: Canada has an infrastructure problem.

"Ten thousand years is how much additional time commuters in Toronto, Montreal and Vancouver spend stuck in traffic every single year as a result of road congestion from key bottlenecks in those cities," the Canadian Chamber of Commerce said in a report released this year.

"This severe congestion is an issue not just for businesses and residents of those cities, but for the entire Canadian economy."

According to the Business Council of Canada, it may require an investment of $150-million to $1-trillion to make the Canadian economy run with optimal productivity and efficiency.

Whatever the size of the gap, "the inability to get people to the right places at the right times and to move goods and services is a tremendous loss," says James McKellar, professor and director of the Brookfield Centre in Real Estate and Infrastructure at York University's Schulich School of Business in Toronto.

The profit that's missed as a result of the gap "is money you might as well just put into a bonfire," he says.

In 2016, a consortium of construction companies, municipalities, engineers and public works organizations released its fourth annual Canadian Infrastructure Report Card. "One-third of our municipal infrastructure is in fair, poor or very poor condition, increasing the risk of service disruption," the report card said.

"Roads, municipal buildings, sport and recreation facilities and public transit are the asset classes most in need of attention."

It's worse than that. According to this year's Canadian Chamber of Commerce report, the infrastructure gap extends well beyond the difficulty in getting from point A to point B.

It's also crucial to adapt to climate change, as Canada's roads, rails, ports, shorelines and structures are subjected to warmer average annual temperatures and wilder weather with vicious wildfires, floods and storms.

The infrastructure gap also includes the need to upgrade other key elements that keep Canada's economy functioning and the country together not just physically but electronically – through electricity grids and the information highway.

While the chamber report finds that 96 per cent of Canadians now have broadband access at speeds of at least 5 megabits a second, there are still physical gaps in coverage because Canada is so large.

Upgrading information infrastructure can be a physical challenge in a country as large as this. But with cloud-based computing and artificial intelligence quickly advancing in the economy, fast, affordable wireless access is becoming more important every year, and it's going to cost money to improve.

"Low or no bandwidth results not only in lost productivity, but it stifles data innovation and prevents businesses from taking advantage of all the new opportunities of economic activity migrating online," the chamber says.

Market forces are not sufficient to bring reliable, high-speed connectivity to these communities, it says, and public investments and incentives are needed to continue improving the reach of Canada's digital infrastructure.

How can Canada address the challenge of closing an infrastructure gap that is wide and deep and often plagued by political and jurisdictional rivalries and turf wars? One response has come from the federal government, which has established a Canada Infrastructure Bank that proposes to invest $35-billion into projects such as public transit systems, trade and transportation corridors and green infrastructure projects.

"It's a good model to pursue and we're supportive," says Brian Kingston, the Business Council of Canada's vice-president for policy, international and fiscal issues.

But it's going to require even more than deep federal pockets, he and other experts say. Other measures will be needed to reduce traffic, for instance.

"People respond very well to price," says Prof. McKellar of York University. "I'd look at pricing mechanisms to get some of those vehicles off the road."

Governments need to get over their aversion to imposing road tolls and congestion charges for those who choose to drive into downtown cores, Prof. McKellar explains. It would also be helpful if money collected from such charges were applied directly to infrastructure projects rather than going to general revenues, he adds.

Mr. Kingston says it would also be helpful to organize more carefully what needs to be done most urgently to improve infrastructure, because the to-do list can be so daunting. "We need a pipeline of priority projects so we can focus on what to do over the next 10 years," he says.

Governments should look more objectively at how to fund infrastructure projects through public-private partnerships, or P3s, Mr. Kingston adds. It's true that there have been cases where these have proven unpopular because of excessive cost or difficulty with particular partners, but the general track record for P3s delivering infrastructure improvements successfully is better than many people think.

"By some measures, Canada is considered a world leader in P3s," Mr. Kingston says.

We need to be imaginative and forward-thinking, too, Prof. MacKellar adds. A changing economy can bring infrastructure needs that people didn't expect.

For example, 20 or 30 years ago, conventional wisdom held that in the information age, fewer people would work in downtown cores because they could connect on computers and mobile devices. Instead, the cores of Toronto, Montreal, Vancouver and other cities have filled up.

"The reason people group downtown isn't so they can talk to each other on cellphones, it's so they can collaborate," he says. Ensuring that they can do this effectively requires new types of infrastructure thinking, for example doing more to connect mass transit with "last mile" travel via taxi, ride-sharing or, perhaps soon, in driverless cars.

Similarly, infrastructure needs may be different as the technologies that feed the economy change. Driverless cars will still need roads to travel on, for example, but if people simply summon a robo-car from a pool of available vehicles, should cities still be building parking lots?

Interact with The Globe