While the Canada-U.S. border might still be as tight as a drum, there’s little stopping government officials looking south for inspiration as Victoria and Ottawa prepare to unveil their respective budgets next week.
U.S. President Joe Biden last month proposed a US$2.3 trillion infrastructure plan that would earmark US$621 billion for roads and bridges, US$174 billion for electric vehicle infrastructure, and US$100 billion for broadband internet.
“I suspect both the B.C. government and the Trudeau government are looking at that U.S. infrastructure proposal and seeing whether there’s some ideas and themes in there that can be incorporated into Canadian and B.C. infrastructure spending,” said economist Jock Finlayson, senior policy adviser at the Business Council of BC.
A common issue facing both provincial and federal finance ministers rests in the current state of the pandemic.
“A couple months ago I’m sure they were thinking, ‘We’re going to present budgets that are going to look past COVID to the future,’” Finlayson said.
“The difficulty, I think, for both governments at the moment is that’s not the world we’re in. It’s too early to be talking about the post-COVID world, or at least to centre the budgets around that. We’ve still got to get through the nightmare that we’re in the middle of.”
That means there might be less budget emphasis on major transportation and infrastructure initiatives – typically the domain of mid-to-long-term thinking – as both levels of government try to navigate short-term economic recovery, he said.
The province’s 2020 budget, released just prior to the pandemic, had $9.2 billion earmarked over five years for various transportation projects.
Meanwhile, Prime Minister Justin Trudeau announced in February the federal government was earmarking $14.9 billion over eight years for transportation projects across the country.
And while the Metro Vancouver Mayors’ Council on Regional Transportation voted more than a year ago in favour of extending the Broadway SkyTrain line to the University of British Columbia, Ottawa’s funds are not tied to any project at this point.
But a March report presented to the Mayors’ Council revealed ridership throughout the TransLink system has only recovered to around 40% of pre-pandemic levels more than a year after widespread lockdowns.
Gary Webster, national leader of KPMG’s infrastructure team, said governments must start thinking beyond the traditional investments in transportation projects.
While most people are accustomed to travelling on transit via fixed routes, Webster said transit-on-demand projects should be taken more seriously.
That could involve the deployment of autonomous fleets of smaller buses that respond to the real-time demand of transit riders using apps, or “public-sector Uber,” as Webster describes it.
Webster said that with less commuting into Vancouver and the rapid transition to remote working, governments need to be bold when considering how people will be moving around the region in the coming years.
“The industry is ready, and I think it’s just a matter of who’s going to take the risk on some of the basic funding and financing. I think governments need to take the first step.”
He doesn’t anticipate any large shipbuilding projects for Vancouver in the upcoming federal budget. But Webster said investments in B.C.’s smaller ports, such as Victoria and Nanaimo, would be worthwhile, as would building out Canada’s 5G network by granting more access to the locations needed for the next-generation wireless grid.
“At this point, I think all eyes are either on this health crisis [COVID-19] and supporting the sectors that have been hurt the most,” said Bryan Yu, chief economist at Central 1 Credit Union. “I don’t think there are going to be any significant announcements on the infrastructure side.”
While big infrastructure plans have generated construction jobs, Yu noted that the industry in B.C. has not been hit hard by the pandemic.
Investments in broadband, similar to what Biden is proposing, may be necessary as people depart large urban centres for more affordable lifestyles elsewhere in the province, he said.
“There is some opportunity I think to create more productivity in other parts of the province where people seemingly are gravitating towards,” Yu said. “Whether or not the government will move in that direction is a whole other question.”
