Federal budget fails on economic growth, infrastructure needs
The Trudeau government’s 2024 budget focused heavily on housing and other social programs but is devoid of investments that would elevate Canada’s trade profile and productivity, MHCA President Chris Lorenc said.
That’s a problem because trade is 65% of Canada’s economy, producing the revenues needed to sustain the funding of our social programs and priorities, Lorenc said.
The budget, presented April 16, focused on spurring construction of housing units and supports to renters. There was some cash earmarked for supporting infrastructure, such as sewer & water. Details on how the funding will roll out is to come.
However, there was no mention of launching a new trade transportation infrastructure program, like the Investing in Canada Infrastructure Program, which is now closed.
The budget references the “ongoing actions” under ICIP and other programs, describing how subscribed funds will be spent through coming years. The budget also references $35 billion through the Canada Infrastructure Bank for infrastructure, including “clean power, green infrastructure, public transit, trade and transportation, and broadband.”
“What we did not see in the budget was urgent attention to necessary investments for our trade gateways & corridors network to repair Canada’s damaged reputation, globally, as a trade partner that can deliver the goods,” said Lorenc, who is also president of the Western Canada Roadbuilders & Heavy Construction Association.
This lack of investment attention is in spite of a World Economic Forum global survey that saw Canada’s rank for trade transportation reliability fall from 10th in 2009 to 32nd in 2019, behind Azerbaijan. That was five years ago, said Lorenc.
Canada’s approach to transportation infrastructure investment has been sporadic – starts and stops – which, economic analysis shows, reduces the full potential return to the GDP. Countries that take a long view with sustained and substantial investment levels in trade transportation infrastructure see much greater returns to GDP.
The WCR&HCA, working with leading national business groups, is pressing Ottawa to support a Canada Trade Infrastructure Program, to work with provinces, municipalities and the private sector on a long-term investment strategy that prioritizes transportation projects that have the highest return to GDP.
“We know that investing in trade transportation has amongst the highest returns to GDP — $1.30 and upwards in the same year of investment – because it boosts trade activity,” noted Lorenc. “Without those revenues returned to governments, we cannot sustain our social programs.”
The Canadian Construction Association issued a release after the budget was presented, also drawing concern to the lack of sufficient focus on infrastructure funding.
