February 1, 2010

Federal finance

Canadian Construction Association turns attention to post-stimulus investment

VINCE VERSACE

staff writer

The federal government must find new ways to fund critical infrastructure investment beyond the lifespan of current stimulus fund programs, says the Canadian Construction Association (CCA).

“The Construction Sector Council has reported that 50 per cent of stimulus funding is going to come this year and we are starting to change our focus to what comes next,” explained Michael Atkinson, president of the CCA.

“Our concern is that when the two-year infrastructure programs lapse, what will be the federal government’s role be going forward to ensure that Canada’s key infrastructure is maintained?”

The CCA has been invited to attend pre-budget consultations this week in Richmond, B.C.

The consultations will explore the effectiveness of Canada’s Economic Action Plan and how it can be both improved and eventually withdrawn.

“Our main message is that we have been very pleased with the use of infrastructure investment as a major theme of the stimulus measures,” said Atkinson.

“We know that the federal government and other governments will be facing fiscal pressures, but we do not want to see mistakes made, like those in the past, which resulted in slashing of capital investments, as a means of balancing books.”

The CCA is also calling for the current $2 billion annual municipal gas tax fund to be doubled to $4 billion and indexed to the cost of inflation.

Atkinson said the federal government could also consider developing a Municipal Infrastructure Bond to create a large pool of capital to fund current and future infrastructure needs.

Addressing the prohibitive cost in construction to upgrade aging vehicles is a stimulus tool opportunity for Ottawa to consider, noted Atkinson.

The CCA estimates the industry’s vehicle turnover rate to be anywhere from 10 to 20 years or more, especially for heavier, more expensive vehicles.

“We think an acceleration of the capital cost allowance for diesel equipment would spur on vehicle purchases and benefit the environment because new diesel engines have emission controls on them,” he said..

“We see that as something that could be another stimulus measure for this round.”

The CCA also recommends that the Knowledge Infrastructure Program be extended until 2014-2015 at an annual funding level of $1 billion, split equally between universities and colleges.

With human resource challenges facing construction, such as an aging workforce, retraining displaced workers, and training and integrating immigrants, colleges still require ongoing modernization.

“We think continued reinvestment will be a key, as we move forward, for industries like ours that have huge labour challenges in terms of not only recruitment but also training,” said Atkinson.

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