March 24, 2008

Statistics Canada releases new infrastructure asset study: “Infrastructure Capital, 1960 to 2003”

RICHARD GILBERT

staff writer

The public sector’s share of total infrastructure assets in Canada has declined since 1970, according to a study released this month by Statistics Canada.

One of the basic conditions for economic growth in all countries is the construction of infrastructure to support production in all sectors of economic activity.

Infrastructure includes public sector assets such as roads, watermains and sewer systems, as well as private sector assets, such as pipelines, rail and power generating facilities.

A recently released Statistics Canada study defines what public and private assets should be considered infrastructure.

The study, entitled Infrastructure Capital 1960 to 2003, states that infrastructure is “a set of fixed structures that have long useful lives, whose creation involves a considerable gestation period, that have no good short to medium-run substitutes, that underpin the production of a flow of services, and for which it is difficult to maintain inventories.”

Given this definition, the public sector accounts for the largest share of infrastructure. However, the study found that the share of the public sector in total infrastructure assets has fallen from 33 per cent in 1970 to 23 per cent in 2002.

Infrastructure capital in both the public and private sector consists of engineering structures and buildings.

In 2003, infrastructure capital in Canada comprised over 58 per cent of total capital.

Engineering structures consist of pipelines, rail, ports, telephone lines, dams, electric generating facilities, roads and sewers. Buildings are used across all industries.

Public investment in infrastructure takes the form of schools, hospitals, roads, sewer systems and water mains.

In the public sector, these assets are spread about equally between engineering construction and buildings.

In the private sector, investment in infrastructure in terms of engineering structures has traditionally been found in a core set of commercial industries such as electric utilities, transportation and communications. More recently, the share in oil and gas exploration has increased dramatically.

Engineering construction accounted for a large portion of assets from 1997 to 2002. In electric utilities it accounted for 72 per cent, transportation 33 per cent, and telecommunications 37 per cent.

In mining and petroleum, it accounted for 80 per cent of all assets.

The share of infrastructure devoted to transportation declined between 1970 and 2002, while the share in mining and petroleum activities rose.

About 19 per cent of infrastructure assets served a transportation function in 1970. This had fallen to only 13 per cent by 2002.

During the same period, the share of infrastructure assets devoted directly to mining and petroleum activities more than doubled from 5 per cent to 11 per cent of the total.

The share of infrastructure assets devoted to electricity edged down from 12 per cent to 9 per cent. Those devoted to communications stayed steady around 2 per cent.

In 2002, about 34 per cent of assets were devoted to transportation in the public sector, unchanged from 1970.

About 26 per cent were devoted to recreation, culture and education, 13 per cent to health and social protection and 11 per cent to waste, water, sewage and energy distribution.

Print | Email | Comment