Economists foresaw this possibility last winter. They warned the government that infrastructure spending is a slow-acting remedy for a moribund economy.
Social activists were wary, too. They argued there were faster and more effective ways to stimulate economic activity, such as extending employment insurance benefits to the 955,000 jobless Canadians who have no coverage, investing in health care, increasing the national child benefit or increasing the GST tax credit.
Any of these measures would have spurred consumer spending and got employers hiring.
But using federal dollars for infrastructure has two powerful political advantages. It gives taxpayers something tangible for their money. And it allows cabinet ministers and government backbenchers to fan out across the country, announcing local projects.
So Finance Minister Jim Flaherty made infrastructure building the centrepiece of his 2009 budget, promising "massive investments" in shovel-ready projects, ranging from municipal sewers and water lines to high-speed trains.
Six months have passed. Fewer than 1,000 infrastructure projects are underway. (Toronto alone submitted 500 proposals.) And the funding runs out in 20 months.
Friday, July 24, 2009
The reviews are in