Creating Jobs by Building the Communities We Need for the Future
Whether we live in an urban or rural, small or large municipality, we require our local governments to build and maintain infrastructure for clean water, wastewater facilities, roads, as well as bridges. Our communities need public transportation systems. We depend upon community centres, libraries, immigrant settlement houses, recreational facilities, social housing and co-operatives, parks, cultural centres, and elder care and child care facilities.
Well over half of all infrastructure in the country is the responsibility of municipalities. It would cost $12 billion each year for the next ten years to fix crumbling municipal infrastructure. To meet the outstanding transit needs of communities, we would need another $8 billion each year for five years. Many other municipally based public institutions also need significant financial support.
Around the world, governments are looking for ways to confront the current economic crisis. Because Canadian governments chose to cut taxes during the “surplus” years, municipalities are now ill-equipped to deal with the crisis. Major investments are now needed to support communities, reduce unemployment, and decrease inequality.
At the same time, high unemployment continues to threaten our communities. Despite a very modest economic recovery, the national unemployment rate is expected to stay above 8% through 2010 and 2011. Many of the new jobs being created are low-paid and insecure. Government support for job creation must continue.
One important way the government can strengthen the Canadian economy is to support basic infrastructure investments. Informetrica Ltd. calculates that $1 billion invested in basic municipal infrastructure creates 11,500 jobs, half in construction and half supplying mainly Canadian-made goods and services. The job-creating impact is more than double that of tax cuts.
The 2010 federal budget confirmed that the infrastructure program will expire in 2011. The Canadian Labour Congress had called on the government to build on existing stimulus measures and to launch, in partnership with the provinces and municipalities, a major multi-year public investment program. This program would create jobs now, promote our environmental goals, and build new “green” industries for the future.
No to Public-Private Partnerships (P3s)
Two years ago, the federal Conservative government decided to create a new Crown Corporation called PPP Canada Inc. tasked with creating public-private partnerships (P3s) across the country. All large-scale projects under the federal Building Canada Fund would have to demonstrate that the P3 option had been “fully considered.”
“Traditional” infrastructure projects are based on the assumption that the private sector designs and builds the project, while governments finance, maintain, and operate the public infrastructure. Public-private partnerships (P3s) allow the private sector to profit from financing, maintaining, and operating the infrastructure. After 30 years or more, the worn-out project reverts back to the public sector for renewal.
Since the economic crisis began, the inability of private consortia to secure funding has demolished one of the central arguments used to defend P3s. As Moody’s, the credit rating firm, said in its January 2009 Report on Canadian PPPs, “there is a potential for P3 projects to be increasingly unable to show value for money, meet affordability tests, or even complete their funding.”
The weaknesses of P3s have been magnified because of the lack of private credit and the global financial crisis. Still, the federal government remains committed to finding ways to hand our public infrastructure over to the private sector.
A national commitment to public infrastructure
The deepening economic crisis is hitting communities hard. Canadian municipalities require stable funding for rehabilitation and replacement of all classes of infrastructure. Canada has no national transit funding program. We have pressing environmental issues to confront. While we need an immediate economic stimulus, we also need long-term, multi-year funding of public infrastructure.
We must call on our local governments to choose public reinvestments and economic renewal that is sustainable, equitable, and democratic. Our local governments should sign contracts that require training, recognize prior learning and experience, and facilitate the entry of women and new immigrants into jobs created by infrastructure projects.
By building and rehabilitating public infrastructure, municipal governments can help create jobs. Quality infrastructure can house the services that communities in crisis need. Good infrastructure can help strengthen social inclusion in hard economic times. As our communities are rocked by global recession, investments in public infrastructure help our communities strengthen democratic control, develop local economies, get women and men back to work, and build sustainable environments.