On February 21st, 2017, Dr. Kevin Quigley gave the following presentation to the Senate’s Standing Committee on Transport, Infrastructure and Communities on the subject of infrastructure planning in Canada:
“Good morning, Madam Chair.
Thank you to the committee for inviting me.
I’m before the committee today to talk about infrastructure planning from my position as an academic and researcher focused on infrastructure and risk governance.
Infrastructure spending on transportation, energy, and telecommunications, for example, is not always the sexiest topic, noted John Ivison, but historically these investments have changed our society. Indeed, new technologies offer similar promise. Infrastructure investments in wireless technologies, high-speed commuter trains, and driverless cars, for example, will not just accommodate the needs of future communities—they will shape them.
But this is largely an expression of hope over experience. In fact, many infrastructure projects fall short of expectations. They run late and over-budget. They are incremental, not transformative. The decision-making process is opaque, and policy decisions are not well coordinated. Infrastructure projects are subject to considerable market, popular, and interest group pressures, which influence the outcomes.
Market pressures will emerge due to fluctuations in economic forecasts and competition over available capital and between different technologies. There’s also a disparity between large urban areas and everyone else. While some well-populated regions have considerable transportation infrastructure, less populated areas of the country simply don’t have the population or means to build the transportation infrastructure they need.
There are also market failures, which governments should address. Climate change and security concerns, for example, cannot be justified in a private sector cost-benefit analysis. There are also popular pressures. How to pay for the infrastructure will raise controversy on the role of user fees and tolls, and on the role of the private sector in managing, financing, and, in some cases, owning the infrastructure.
These aren’t strictly market considerations. They are normative ones. People don’t like tolls and user fees, and they look with distrust at P3 arrangements, despite the opportunities they might offer. Moreover, there is always popular pressure to create new infrastructure. Maintaining assets gets less attention despite the cost, and retiring assets can be unpopular despite the savings. Regrettably, our political arrangements can limit co-operation between parties, districts, and orders of government.
Here are some suggestions.
First, we need to get better at regional planning: longer term, more nimble, and better coordinated. For example, New Zealand has a 30-year infrastructure plan. Canada has no such plan. Longer-term planning opens up the opportunity for markets and policy entrepreneurialism, seizing opportunities as they present themselves. It also encourages better coordination between the private sector, government agencies, and all orders of government, taking trade, security, and environment into account.
Second, we need better public engagement and education. We need to build communities that people want to live in. Infrastructure investments are not strictly economic investments carried out by large and at-a-distance multinational corporations. There is an aesthetic aspect. We must also be confident that people will use the technologies we are introducing, which may be a challenge in certain demographics. At the same time, people need to understand the trade-offs and choices between hockey rinks and commuter rail.
Third, we need better asset management. This requires better data collection and more research capacity. Here, Canada is falling behind the U.K. and Australia, which have established multidisciplinary research centres of excellence that don’t yet exist in Canada. We should support a research network that includes researchers in computer science, urban planning, public economics, trade, security, environment, and so on.
Finally, we also need clear accountability and transparency with respect to the decisions, and reasonable performance measures. This is particularly so due to the high-level distrust of P3s. Interestingly, according to polling data, people trust small and medium-sized enterprises more than they do government and the finance sector. The government should build on this by including SMEs in its planning.
Ivison notes that infrastructure is not the sexiest topic, and I agree. This is what concerns me most: that its failure to capture the popular imagination in today’s media culture means that it might be overlooked. In fact, as we know, infrastructure spending can be in the billions, it can take years to plan, and, for good or for ill, we will all have to live with the outcome for generations. It’s worth trying to get it right.
Kevin Quigley, 2017