Don Quixote Note: This is the start of reports that will be used by local municipalities as they are required by law to go to full asset accounting by 2009. A link to the report in the article is included below. This new accounting treatment is simply putting a numerical projection on the infrastructure deficit in each community. There will be an initial panic after the next election as the Politicians try to figure out how they can address providing for replacement of future infrastructure as will be required without huge property tax increases for current taxpayers. Nothing really will have changed except some cost accounting types will present each city with a new mortgage that they must address. Stay tune as this financial scare is unveiled to an unsuspecting public.
-------------------------Tuesday, November 20, 2007 | 5:15 PM ET CBC NEWS
Canada's three levels of government must spend $123 billion to fix the country's creaking infrastructure, says a report from the Federation of Canadian Municipalities. "If serious action isn't taken now, our infrastructure is headed for collapse," said federation president Gord Steeves at a news conference in Ottawa on Tuesday. Steeves, a city councillor in Winnipeg, noted that people are already beginning to take for granted warning signs such as boil-water advisories, potholes and gridlock. The report, Danger Ahead: The Coming Collapse of Canada’s Municipal Infrastructure, was prepared by a research team led by Dr. Saeed Mirza of McGill University’s Department of Civil Engineering and Applied Mechanics. It's based on 85 responses to a questionnaire sent to 166 municipalities.
The $123-billion estimate includes "sub-deficits" for key categories:
- Water and wastewater systems ($31 billion).
- Transportation ($21.7 billion), transit ($22.8 billion).
- Solid-waste management ($7.7 billion).
- Community, recreational, cultural and social infrastructure ($40.2 billion).
Steeves said it shows the decay is accelerating faster than previously thought, as the country's infrastructure was mostly built between the 1950s and 1970s, and has used up 79 per cent of its service life."The cost of fixing this problem will only go up, as will the cost of not fixing it," he said.
Property taxes not enough
The federation wants the federal government to acknowledge the problem and recognize the need for a national plan to fix it once and for all, Steeves said. He added that municipalities lack the resources to tackle the problem, as property taxes alone comprise only 8 per cent of Canadian tax revenues. Louise Poirier, a city councillor for Gatineau, Que., and a member of the federation's board of directors, told the news conference that aside from the magnitude of the costs, municipalities face barriers such as laws that ban them from running deficits.When Steeves was asked if some of the deferred infrastructure spending was the result of poor decision-making by municipalities in the past, he agreed that could be a contributing factor.
But he also blamed the distribution of money through provincial programs that require municipalities to apply for specific projects. Those tend to result in spending on provincial priorities rather than priorities for towns and cities, and sometimes leave large sums earmarked for infrastructure sitting unspent in provincial coffers, he said. He said he thinks the money should flow directly to the municipalities. "We think that the municipal governments are the level of government that are in the best position to determine what their own infrastructure needs are."
Delays cause decay: report
The report said one of the key causes of the rapid decay of infrastructure is that governments put off maintenance during the economic hard times of the 1970s and 1980s."With no maintenance or sporadic deferred maintenance, the infrastructure facility deteriorates very rapidly and with a considerable reduction in service life." In some cases, it's too late to refurbish the decayed structures and they have to be decommissioned, demolished and replaced, adding to the costs. The Federation of Canadian Municipalities, which has 1,600 members, represents the interests of municipalities on policy and program matters under federal jurisdiction.
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