Canada needs to invest in trade infrastructure
By Martin Charlton Communications
The world needs what Saskatchewan produces, but producing these commodities is not enough.
We have to get our goods to other countries and doing so depends on having an effective system of infrastructure to move commodities through Canada and beyond its borders.
Further developing and maintaining an infrastructure system that supports trade is important for Canada’s economic future. Moving goods to and from other countries makes up two-thirds of this country’s income (as compared to just over a quarter for the U.S. and 45 per cent for Australia, according to World Bank figures.)
Today, many Canadians are learning about the supply chain vulnerabilities of this country with news headlines about empty store shelves, flooding in B.C. and truck blockades at the border.
Others saw it coming for more than 10 years and are now stating what they believe is necessary to ensure Canada has a strong trade infrastructure system.
“This is a lost decade for investment in export capacity – equipment, facilities and the public infrastructure necessary to produce and transport goods to global growth hot-spots,” said Peter Hall, the former chief economist for Export Development Canada. “What we are seeing right now is a lack of ability to grow because of that missing investment.”
A new report by the Canada West Foundation (CWF) titled From Shovel Ready to Shovel Worthy: The Path to a National Trade Infrastructure Plan for the Next Generation of Economic Growth could be a starting point to ensure Canada doesn’t continue to miss out. The report was released publicly in mid-May.
That report explains how Canada got to this point and describes what would be a better way forward. John Law is the lead author of the report. He is a senior fellow at CWF and a leader in Canada’s transportation and infrastructure sector.
Law has a played a significant role in the development of national and interprovincial transportation policy, serving in a number of senior positions in industry and government including as president of the Transportation Association of Canada (TAC), chair of the Canadian Council of Deputy Ministers responsible for Transportation and Infrastructure, founder and chief executive officer of Saskatchewan’s Global Transportation Hub, and deputy minister of the Saskatchewan Ministry of Highways and Infrastructure.
It is not just those in this country who are noticing and questioning Canada’s infrastructure, Law writes in the report. Confidence in the reliability and competitiveness of Canada’s trade infrastructure has been slipping in other parts of the world, according to international surveys.
Canada was the only country in a 2021 analysis by the European Court of Auditors where major transportation projects are not planned as part of a national long-term strategy. That analysis described how Canada doesn’t effectively coordinate what projects proceed, which means projects with lower returns on investment are being selected. This country also has no system for monitoring the performance of projects after they are done to see what improvements can be made in the future. It describes Canada’s way of planning infrastructure as “a big risk to future prosperity.”
Saskatchewan people continue to hear announcements about private businesses increasing their production in order to meet the world’s needs. A number of canola processing plants have been announced in the last two years. Potash mines, including those owned by BHP and K+S, are moving ahead with plans to increasing their production. Then there is the new development for resources in this province, including lithium, helium and more.
“Canada’s economy depends on the ability to access world markets which includes the transportation of goods through road, rail, ports and pipelines efficiently and dependably,” said Chris Dekker, the president and CEO of Saskatchewan Trade and Export Partnership. “As a landlocked province, Saskatchewan is particularly impacted by trade corridor issues. The CWF report captures the existing and growing infrastructure challenge and outlines a tangible path toward the next generation of economic growth.”
Moving from spending to investing in Canada’s trade infrastructure requires moving away from putting money towards projects ready to be built and moving towards a plan that invests in infrastructure that supports the movement of goods and people in an efficient and effective manner.
Paying to complete projects that are picked because they are ready for construction to begin is what is meant by shovel ready. Instead, projects that are shovel worthy are those that have been determined to be able to produce a maximum return on the investment made in them and can increase supply chain competitiveness.
For every $1 invested in trade transportation infrastructure, the GDP boost is $1.30, often in the same year. This is one of the messages being shared by Chris Lorenc, the president of the Manitoba Heavy Construction Association, who also serves as president of the Western Canada Roadbuilders and Heavy Construction Association (WCR&HCA), as he promotes this report’s importance.
The WCR&HCA helped initiate the report, but it has been endorsed by a number of associations and organizations concerned with the current investment, the lack of coordination and planning on a long-term strategy and the state of the federal trade corridors fund. There have been numerous stakeholders involved in the preparation and release of the report.
In addition to circulating the Shovel Worthy report to stakeholder partners and political offices, the WCR&HCA is working with CWF and the Canadian Construction Association to get the report in front of and seriously considered by the federal and provincial governments.
They want governments to know that shovel-
worthy projects – those that make Canada more competitive – are what belong in a national plan that has a long-term view and is always being updated. That plan is how Canada can return to its place in the top 10 of global trade infrastructure rankings, which is needed to restore the confidence of Canada’s trade customers.
“As a trading nation, Canada’s success is closely linked with the strength and competitiveness of our multi-modal transportation systems and key trade corridors. Saskatchewan and the West produce much of what the world needs,” said Shantel Lipp, president of the Saskatchewan Heavy Construction Association. “There are established best practices from other jurisdictions that can help us create a new national framework, without having to re-invent the wheel, we just need to look at their success and build upon it.”
By pulling out the best features of national infrastructure plans developed by Canada’s competitors and combining those features with Canada’s own infrastructure programs that have been successful – such as the Asia-Pacific Gateway and Corridor Initiative and the Regional Transportation Assessments done by Transport Canada, Canada can more quickly get up to speed than it would be able to starting from scratch.
Having such a plan – which can be referred to when spending decisions are being made – is how Canada can also make sure that it gives serious consideration to challenges posed by climate change and ensure harm to marginalized communities is prevented or at least handled well.
There are seven points the report makes about how to build Canada’s first national plan for trade corridor infrastructure. They are:
Define Canada’s national trade corridor network to put all levels of government and industry on the same page.
Bring the private sector to the table as an ongoing contributor of sophisticated supply chain expertise and front-line operational experience to complement the best features of public-sector policy.
Apply criteria of national significance
to guide the planning process and
Develop an “evergreen,” decades-long pipeline of national infrastructure projects.
Undertake regular assessments of infrastructure projects in relation to established criteria.
Begin a new forward-looking approach to the collection of data and use of forecasting and modelling tools.
Coordinate the communications of domestic infrastructure working groups and aggressively share progress on the above recommendations with industry and foreign customers.
The Shovel Worthy report concludes by stating that Canada’s network of trade corridor assets, which includes highways, railways, ports and airports, connects this country to global trade. Quality trade infrastructure is key to enabling Canada’s trade-dependent economy and makes a national plan necessary if the country’s economy is to continue to grow.
The report, it says, is just the starting point to see that national plan be developed in order for Canada to again be considered trustworthy and dependable as a trade partner. That plan will not only improve efficiency, but also help Canada address climate change shock and anticipate trade changes. The plan must consider local strengths and priorities by keeping regions involved in national planning.