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TRAN Committee Report

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Supplementary Opinion and Recommendations

The Liberal government promised deficits of no more than $10 billion a year in order to make investments in infrastructure.[1] The government has failed to uphold this promise. Not only is the government producing deficits much greater than $10 billion a year, it is not spending the money it committed to on infrastructure. The Parliamentary Budget Officer (PBO) reported in March that roughly one-quarter of the funding the government allocated for infrastructure from 2016-17 to 2018-19 will lapse.[2]

Furthermore, the Liberal government promised that no money intended for infrastructure would be allowed to lapse, and that any unspent infrastructure money would be transferred in to the Gas Tax Fund before each fiscal year end.[3] This promised has also not been fulfilled.

The government’s failure has already had negative effects on the Canadian economy. In Budget 2016, the government projected that Phase 1 infrastructure investments would lead to incremental GDP growth of 0.2% in in 2016-17, and 0.4% in 2017-18.[4] Due to the government’s failure to uphold its own infrastructure promises, GDP growth and corresponding job creation have not materialized. According to the PBO, Phase 1 only increased GDP by 0.1% in each of fiscal 2016-17 and 2017-18, and only increased the number of jobs by between 9,600 to 11,100 over the past year.[5]

The government’s inability to deliver on its infrastructure promises has also had another negative effect. Commute times for Canadians are getting worse. Daily commute times continue to lengthen, despite people living closer to where they work. Last November, Statistics Canada reported it now takes GTA residents one hour and eight minutes to commute every day, up 3.7 per cent from 2011, despite the fact that the average distance between home and work decreased from 14.8 kilometres to 14.6 kilometres. Across Canada, it now takes Canadians 52 minutes each day to get to and from work, up 3.1 per cent from 2011. These longer commute times mean time and money wasted, lost productivity and increased GHG emissions.[6]

Clearly, the government must do a better job in delivering on its infrastructure commitments. To that end, the following recommendations are made:

  1. That the government either uphold its promise to transfer, before each fiscal year end, any unspent money into the gas tax fund, or explain why this promise is not going to be implemented.
  2. That the government update the projections it made in Budget 2016 regarding the number of jobs and economic growth created because of federal infrastructure spending.
  3. That the government ties its infrastructure spending to measureable outcomes, such as daily time spent commuting.

[1] Real Change – A New Plan for a Strong Middle Class, Liberal Party of Canada, 2015, p. 12

[2] Budget 2018: Issues for Parliamentarians, Parliamentary Budget Officer, Ottawa, March 15, 2018, p. 1

[3] Real Change – A New Plan for a Strong Middle Class, Liberal Party of Canada, 2015, p. 14

[4] Budget 2016 – Growing the Middle Class, Department of Finance, Ottawa, 22 March 2016, p. 49

[5] Status Report on Phase 1 of the New Infrastructure Plan, Parliamentary Budget Officer, Ottawa, March 29, 2018, p. 2

[6] The Daily, Journey to work: Key results from the 2016 Census, Statistics Canada, Ottawa, November 29, 2017