Money talks, but national transportation strategy
creates movement
Experts discuss the need for a comprehensive, clear vision for transportation policy
By ALLY FOSTER |
Thursday, 09/24/2015
Political parties are promising big bucks to transportation and infrastructure improvements in the
lead-up to the election, as well as in advance of the Dec. 24 release of David Emerson’s report
reviewing the Canada Transportation Act. But experts caution that simply throwing money at
developments will not be enough, and that parties should prioritize strategy and innovation over
cash-trumping assurances.
At an early-morning transportation policy briefing in Ottawa, hosted by The Hill Times on Sept.
22, panelists emphasized that Canada’s channels of moving goods and people locally, crosscountry, and internationally are key to economic growth, and require a national, multigovernment strategy that explores under-utilized opportunities.
In the penthouse of the Delta City Centre hotel, fittingly gazing out over a sunny panorama of
rush hour traffic snaking along the Ottawa River, and construction on the new Ottawa light rail
confederation line, four panelists discussed the way forward for transportation policy.
Nick Mulder, a senior associate with government relations firm Global Public Affairs, told the
audience that transportation and infrastructure has tumbled down the list of government priorities
in the past decade.
The Canadian government has “lacked a strategic focus” in its approach to funding a broad,
effective transportation system, said Mr. Mulder, a former deputy minister at Transport Canada.
He added that transit productivity is not growing as it should be.
The federal government has “to have a more strategic plan and a longer-term vision,” he said.
“The three main parties all have transportation in some ways in their platforms, but most of it …
has to do with infrastructure, broadly defined.”
What parties are promising
The Conservatives have pledged $5.3-billion a year for provincial and municipal infrastructure
funding under the New Building Canada Plan. They’ve also committed a New Public Transit
Fund, for which they would dole out $250-million in 2017, $500-million in 2018, and $1-billion
a year after 2019.
The NDP has committed to a one-cent increase to the current 10-cents-per-litre gas tax that the
federal government invests in roads and other core infrastructure. This would create an additional
$1.5-billion a year in gas tax transfers to municipalities. The party also says it will develop a
more comprehensive transit strategy with provincial-level governments, along with $1.3-billion
annually over 20 years for municipal public transit.
The Liberals have suggested using “alternative sources of capital,” such as pension fund
investments, to bolster infrastructure funding as well as holding annual mayors’ meetings in
Ottawa to talk transportation and infrastructure issues.
The Green Party focuses primarily on rail investments, vowing to reinvest in national railway
systems, increase productivity, expand VIA Rail service nationally, and increase federalmunicipal partnerships on light-rail improvements.
All cash, no vision
As Mr. Mulder points out, there’s “a lot of billions” being promised, but “the problem with it is
that … there’s no reference to marine, there’s no reference to air, there’s no reference to really
improving the function of gateways.”
Mr. Mulder said variety is needed in parties’ transportation agendas, such as: a highway trust
fund to improve highway conditions across the country, processing passengers much faster in
airports, as well as decreasing the financial burdens currently placed by the federal government
on Canadian airports, airlines, and flyers.
The World Economic Forum’s 2013 Travel & Tourism Competitiveness Report ranked Canada
first out of 140 countries for its air transport infrastructure, and yet, placed Canada near the
bottom, at 136, for its ticket taxes and airport charges.
Lastly, he suggested that VIA Rail should be broken up, remote services should be disbanded,
and transcontinental services should be used for tourism.
Keeping Canadian jobs
Patrick Leclerc, CEO of the Canadian Urban Transit Association, also spoke at the briefing and
agreed that Canadian parties seem to be giving transportation a great deal of attention while
campaigning, but are not communicating a strong vision. During the most recent election
leaders’ debate on the economy, the phrase ‘public transit’ surfaced 12 times, he said.
“There’s a clear realization now that public transit is not a local issue—it’s more than that—the
impact is national,” he said. “We’re seeing billions in public transit [investment] every year …
but we don’t have a clear direction.”
A national agenda with jurisdictions assigned to various levels of government should be
established, he said. Mr. Leclerc also pointed out that Canadian manufacturers and suppliers are
global leaders in transit production. For example, Canadian companies are responsible for 70 per
cent of North America’s urban bus market.
However, the U.S. Senate approved a transportation bill in July, which proposes to increase the
buy-America requirements for transportation equipment from 60 per cent to 70 per cent, putting
many high-value Canadian jobs at risk.
“We need to engage with our U.S. counterparts on that to find innovative and practical solutions
… to keep these high-quality, high-paying jobs here in Canada.”
Smarter spending
Panelist Mario Iacobacci proposed an idea for a more effective transportation strategy: create a
mechanism to ensure that funds are being spent on infrastructure projects that have the most
merits in terms of basic business sense.
Mr. Iacobacci, director of economics at AECOM, a global engineering and architectural
company, told the audience that the federal government is a big spender on infrastructure, but
added, “Are they spending in the right places?”
Mr. Iacobacci argued that all infrastructure projects are not created equally, and explained that
some initiatives provide a high return; not just in terms of money, but also addressing issues like
congestion, productivity and environmental sustainability benefits.
“There are other projects … that cost billions of dollars, where taxpayers are losing 40 to 50
cents on the dollar, because if you look at the underlying business case, it’s not there,” he said.
“The benefits don’t cover the costs.”
The government should have an official mechanism in place to choose the best projects, he said,
adding that the New Building Canada Plan—a roughly $80-billion, 10-year funding commitment
from the federal government—is largely distributed by population. Mr. Iacobacci argued that a
bigger component of that plan should be based on merit, which means selecting projects that
provide the most tangible returns to Canadians.
Lost potential
Mr. Iacobacci also emphasized that freight is not the only way to move large amounts of goods
across Canada. “We live in a country that is surrounded by oceans … and we have these things
called the Great Lakes that comes right into the North American heartlands.”
The basin is home to more than 100 million people, yet “the lakes are being used less and less to
carry goods and traffic. Does that make sense?” he questioned.
But while some experts say railways receive a big slice of the transportation attention pie,
Michael Bourque, president of the Railway Association of Canada, said some rail services are
struggling and should be considered for government assistance.
Short line railways are “at a crucial juncture in their history” as they can only afford to spend
about 12 per cent of their revenues on infrastructure, he said during the panel discussion.
Large railways typically invest about 20 per cent into maintaining or improving their own
networks.
As a result, these shorter routes are not able to grow, innovate, or invest in increasing their speed
to add more value to customers and the Canadian economy.
He reminded listeners that short lines compete with trucks, which are subsidized “by roads,
bridges and other highway infrastructure,” funded by tax dollars.
Railways are, for the most part, expected to cover the costs of their own infrastructure.
“We’re going to have to level the playing field and start to invest in that critical infrastructure …
which would benefit in lower congestion, lower pollution, lower greenhouse gases and [more]
capacity for the future,” he said.
Eliminating silos in transit talk
While panelists at the briefing each provided their own unique recommendations for
transportation policy, including investment in rail systems, public transit, forgotten methods like
internal shipping, an emphasis on tourism and support for air travel, as well as a focus on
funding merit-based infrastructure projects, Mr. Leclerc made an assertion that seemed to cut
through every speaker’s background and professional hopes.
“We’re really tackling transportation in silos. We’re talking about freight, and then we’re talking
about commuter rail, and light rail. Then buses, and then transit,” he said. “But that’s not how it
works. If we really want to have a vision for the future, we need to look at it in a very
comprehensive way.”
At this, every panelist nodded.
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The Hill Times