Wednesday, August 12, 2009

Where Are the Shovels, the Jobs, the Stimulus?

So while the Conservatives are running helter skelter, promising this and promising that, the only thing flowing is a lot of hot air.

The money is just not getting out.

The Liberal infrastructure critic, Gerard Kennedy, has been tracking the situation, and plans to produce a full report by the end of the month.

However, even without the report, the latest job loss figures pretty much validate that the stimulus is not creating jobs, and the good news about economic recovery may have to be put on hold to reflect this.

Where are the shovels, the jobs, the stimulus?
The Toronto Star
Aug 12, 2009
Carol Goar

Because no one else is doing it, Liberal MP Gerard Kennedy and his staff of four are attempting to track the $12 billion in new infrastructure funding in the government's January budget.

Their research is not complete, but Kennedy estimates that between 15 per cent and 25 per cent of the money has actually flowed. The rest has been promised, approved, allocated or announced – but municipalities don't have it.

Following the money isn't easy. Ottawa has 16 different infrastructure funds in play. Conservative MPs have announced a blizzard of local projects this summer.

Even when a project has been authorized, municipalities still have to negotiate contribution agreements with Ottawa and their provincial government.

The federal finance department says 80 per cent of the stimulus is "already implemented." But that means the money has been committed, not delivered. Infrastructure Canada, which disperses the funds, has not released any figures on how much has gone out and where it is being spent.

To cut through the confusion, Kennedy is contacting every municipality that applied for funds and asking how much it has received.

Toronto, Montreal and Vancouver have yet to see a cent. Smaller communities, especially in Nova Scotia and British Columbia, have fared better. Surprisingly, most municipalities in Alberta are still waiting.

"The government is going to underspend its target, there's no doubt about that," the Liberal infrastructure critic says.

He also has concerns about what is being built. "We could be paying for a lot of shoddy stuff and sprawl. They (the Conservatives) know they'll never be held to account."

One complaint that has cropped up repeatedly is that contractors are jacking up prices, knowing municipalities have little bargaining power. To qualify for federal funding, work must be completed by March 2011.

While collecting his data, Kennedy has been thinking about what kind of infrastructure policy the Liberals should take into the next election. He can't speak in specifics because he hasn't presented his proposals to the party, but he outlined some of his priorities in an interview last week.

He believes federal infrastructure funding should serve two primary purposes: to make Canada's cities more sustainable and to renew the quality of life in northern and remote communities.

This would make Ottawa less open to proposals to widen highways and accelerate road-building in urban areas and more open to proposals to find new uses for public buildings in towns struggling with depopulation.

He thinks the gas tax fund, through which Ottawa transfers a portion of its gasoline tax revenue to the municipalities, should be the principal vehicle for distributing infrastructure money.

The Conservatives did add $1 billion to the fund in January's budget, but Kennedy would like to have seen most of Ottawa's infrastructure funding delivered that way. As well as being more efficient, he points out, gas tax transfers allow municipalities to use federal money intelligently, rather than coming up with hasty proposals to take advantage of on-again, off-again infrastructure programs.

He would like to break the link between infrastructure spending and political pork barrelling.

It is hard to blame Canadians for being cynical, Kennedy admits. For generations, politicians have used capital projects to reward their friends and pay back voters who supported them. "We need to convince Canadians we can use their money to make their lives better."

He hopes to release his cross-Canada tally by the end of August. Kennedy knows voters will question his motives. He has a vested interested in discrediting the government, after all. He hopes skeptics will do their own scouting. They won't find many shovels in the ground or jobs openings for unemployed construction workers.

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