Governments across Canada are facing severe economic uncertainty caused by COVID-19. It was clear from Ontario Finance Minister Phillip’s budget speech that much of that uncertainty remains for the foreseeable future. Trying to predict what next year will bring is anyone’s guess. However, several realities pre-existed the pandemic and it is important that we seize the predicament we find ourselves in to address them.
If dealing with this pandemic means that governments in Ontario and across Canada have no choice but to continue to produce high deficits, it should also mean that we choose to spend these deficits wisely. That means spending on programs and assets that offer long term benefits for current and future generations. To my mind, infrastructure spending focused on greener, safer and more efficient public transportation offers the best hope of long-term economic recovery and social benefits. That is why I was pleased to see Premier Doug Ford speak so positively about light rail transit in Hamilton recently despite the fact that some of the required financing is still uncertain.
The pandemic is playing havoc with public sector finances and the reality is that the governments’ focus has narrowed. They are spending to protect Canadians’ physical and mental health during this pandemic, to enhance the care we give our seniors, to make sure Canadian families can pay their monthly bills, small businesses survive, and kids are educated. This must remain their priority, for the short term at least. But for the long term we must restart our economy on a solid foundation, and we must do it now.
To be clear, none of this is to say that governments in Toronto and across Canada should be doing something differently. The COVID-19 pandemic has given them an entirely new set of all-consuming priorities which didn’t exist before March, and which in some cases carry huge and open-ended price tags. But as Minister Phillips and his peers across Canada spend to protect us from this virus, we can be ambitious at the same time. We can address the climate impact of single-passenger cars, create thousands of jobs through a better, more resilient public transportation infrastructure, make it easier to go to work, go to school and move larger numbers of people in our rapidly expanding Canadian cities.
To get it done, governments need to pursue more cost-efficient, climate-impactful and rapidly deployed partnerships between the public and private sectors. In this mega-deficit environment forced on us by the pandemic, governments can leverage their spending by inviting private sector partners to participate in financing major transportation infrastructure projects. By getting private partners to risk their own capital, governments can increase the odds of projects being delivered on time and on budget. And we cannot afford delays nor unduly complex commercial structures. These partnerships must be accessible to the largest number of industry players with a model that fairly associates project risks to financial rewards and socio-economic benefits. A report published in 2017 by BCG Consulting found that Canada already had