There were high hopes when Prime Minister Justin Trudeau unveiled plans in 2015 to more than double spending on infrastructure across Canada.

On paper, Massachusetts stands to reap a multibillion-dollar windfall when a federal infrastructure bill finally passes, as looks increasingly likely after last week’s “bipartisan” deal, with money to shower on everything from bridge repairs to high-speed rail.

But if Canada’s experience with priming the public work project pump is any indication, passing that $1 trillion bill could prove to be the easy part, which is truly saying something given the months this group of Democratic and Republican senators have spent hammering out an agreement in the Capitol.

Appropriating massive amounts of money for infrastructure is one thing. Getting that cash into “shovel ready” projects that have nailed down all their federal, state and local permits – and are ready to roll – can be another thing altogether, a look at the experience of our neighbors to the north shows.

There were certainly high hopes when Prime Minister Justin Trudeau unveiled plans in 2015 to more than double spending on infrastructure across Canada. Trudeau’s Liberal government made infrastructure a central plank in its campaign to spur the economy, create jobs and get Canada moving again after years of Conservative rule.

It was not unlike what we are seeing with President Joe Biden’s new administration, which has made revamping the nation’s infrastructure the centerpiece of its plans for the future.

Trudeau’s government pledged to spend $143 billion over 12 years, a sum comparable to the $1.2 trillion infrastructure plan being hammered out by moderate Republican and Democratic lawmakers in Washington, a group that includes Sen. Mitt Romney (R-Utah) and Sen. Joe Manchin (D-WV). (Multiply that number by nine – Canada has roughly a ninth of our population of 328 million – and you get about $1.2 trillion.)

Struggle to Spend

But keeping that pledge has proven harder than Trudeau or his allies in Canada’s Parliament probably bargained on.

The Trudeau government struggled from the start to meet its spending objectives. By 2017, barely a year into the new massive infrastructure program, the parliamentary budget office was reporting that spending was falling behind schedule.

It’s a problem that has only festered and grown. This spring, Canada’s Auditor General Karen Hogan released a report warning Trudeau’s infrastructure plan has fallen chronically behind on its spending targets and may not meet them by 2028, when the 12-year program is supposed to wrap up.

Roughly a quarter of the spending planned for the first three years was delayed, the report found.

And if that wasn’t bad enough, a companion effort by the Canadian government to entice the private sector to pump dollars into public infrastructure projects has proven to be a big flop.

The quasi-public Canada Infrastructure Bank debuted in 2017 with high hopes of using a core of public dollars to leverage hundreds of billions in private investment. But the bank succeeded in inking only a few deals, and somewhat belatedly at that, with nowhere near the kind of volume and investor interest boosters had predicted.

Lessons to Learn

So, what lessons can we take from Canada’s struggling infrastructure campaigns?

The size and complexity of Canada’s federal bureaucracy is likely one of the culprits here, with 34 different departments and agencies in charge of doling out infrastructure dollars. In the plan’s first year in action, roughly a third of these departments failed to spend a single dollar, the parliamentary budget office reported.

Given the federal bureaucracy in Washington is many times the size of its Canadian counterpart, that’s hardly an encouraging sign for our own infrastructure hopes on this side of the border.

But the Canadian permitting process for major projects has also been fingered by executives in the construction and engineering sectors as a big part of the problem.

Federal environmental reviews in Canada of major projects are daunting and can take years, with contentious relations between the government and First Nations further complicating matters.

A three-tiered system for paying for projects, involving city, provincial and federal officials, can also drag out the negotiations on major projects.

Here again there are some uncomfortable parallels, especially when it comes to major infrastructure projects in Massachusetts, which can face a brutal and time-consuming state and local regulatory approval process.

But as important in the infrastructure project snags we’ll see here in Massachusetts are the NIMBY homeowners, abutters and others who are often so successful jamming up the works when it comes to major projects of all kinds, with endless lawsuits and loud complaints and intensive pressure directed at local and state officials.

Shovel ‘Ready’?

A study by a pair of professors from Yale Law School and George Washington University found that the cost of building a single mile of federal highway, adjusted for inflation, tripled over the more than three-decade rollout across the United States of the interstate highway system.

Scott Van Voorhis

And the biggest increases in costs came in states like Massachusetts where there were big jumps in both income and home values.

Needless to say, projects that see big cost increases are also usually subject to major delays as litigation and endless regulatory reviews drag on.

Things are somewhat looking up for that $1 trillion infrastructure deal in Congress, with last week’s announcement on a deal by a bipartisan group of senators providing a badly needed boost.

But as Canada’s experience shows, the biggest challenges may lay ahead when it comes time to finding so-called shovel ready projects to funnel money into. And that could prove difficult indeed here in the Bay State.

Scott Van Voorhis is Banker & Tradesman’s columnist; opinions expressed are his own. He may be reached at sbvanvoorhis@hotmail.com.

Infrastructure Bill Passage is Just the Start

by Scott Van Voorhis time to read: 4 min
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