Good Roads recently calculated a municipal infrastructure deficit of $34.7 billion in the road, bridge, and culvert asset classes alone. Although the majority of infrastructure is owned at the municipal level, municipalities lack the requisite revenue tools needed to fund these assets. At the same time, municipalities continue to ameliorate the sophistication of their asset management plans as a result of O. Reg. 588/17: ASSET MANAGEMENT PLANNING FOR MUNICIPAL INFRASTRUCTURE.
The current government has taken a big step in the right direction by doubling the Ontario Community Infrastructure Fund (OCIF) to nearly $2 billion over five years. However, with a $34.7 billion deficit in the road, bridge, and culvert asset classes alone, much more needs to be done. While the municipal infrastructure deficit is a major issue, the reality is that this is but a symptom of an even larger issue: municipal fiscal sustainability.
Good Roads has been advocating for the government to use a public-private partnership (P3) model for municipal bridges. In 2013, Good Roads, the Residential and Civil Construction Alliance of Ontario, and the Ontario Ministry of Transportation conducted the County of Wellington Bridge Study. This report looked at the feasibility of applying a P3 model to smaller projects by bundling them to enhance investment and maintenance of municipal bridge and culvert structures. The study conservatively estimated that this P3 model could achieve 13% to 20% in savings, in addition to the benefits of accelerated construction.
The COVID-19 pandemic has put significant budget pressures on all levels of government. That is why it is imperative that the province find creative and cost-effective approaches to infrastructure projects.
Recommendation: Good Roads recommends that the Ontario government launch a P3 asset bundling pilot program for municipal bridges and culverts by Spring 2023, to realize quicker construction as well as cost savings.
Maintenance projects generate more economic activity than new capital infrastructure projects. They are open to more types of workers, spend less money on equipment and more on wages, and waste less time on plans and permits. Conversely, new capital projects require more funding for non-stimulative purposes such as buying property. In its most recent budget, the current government has pledged $158.9 billion on capital infrastructure of which $25.1 billion over ten years is earmarked to support highway expansion and rehabilitation projects across the province including Highway 413 and the Bradford Bypass.
With a $34 billion municipal infrastructure deficit in the road, bridge, and culvert asset classes alone, it may be more prudent for the next government to take a “fix-it-first” approach. Municipalities, who have developed more sophisticated asset management plans over the past few years, know which assets need to be repaired and at what time in their lifecycle. Without the proper funding tools to maintain them, municipalities are overly reliant on other orders of government to be responsible stewards of these assets. Compounding matters, inflation has caused many municipalities to delay maintenance and rehabilitation projects as the cost of materials continues to balloon.
Recommendation: Good Roads recommends the province develop a fix-it-first infrastructure funding program to both stimulate the economy and shrink the municipal infrastructure deficit.