Infrastructure and Ontario's magical thinking

May 1, 2014

1-minute read

The government’s commitment to infrastructure emphasizes the need to take the politics out of transportation infrastructure planning, but the announcement itself is larded through with traditional Ontario infrastructure politics.

It talks about listening to the advice of experts, but reasserts its support for the widely condemned extension of Toronto’s subway further into Scarborough.

It talks about the need to invest in infrastructure in Ontario’s major urban areas as a boost to economic development, but it proposes to allocate infrastructure dollars based strictly on population.

That may be the right political answer, but it is a denial of the premise of the whole program.

Of greater concern is the government’s default to magical thinking when it comes to funding for transportation infrastructure.

All of these billions are going to be pumped into improving public transit, and Ontarians won’t have to pay anything.

No increased gas tax.

No increased sales tax.

No increased corporate tax.

Nothing.

Instead, the budget talks about earmarking some of the gas tax, some of the sales tax and little bits and pieces of other taxes to one or the other of its two infrastructure funds. As if the earmarked money wasn’t already fully committed in the current budget and, indeed, is a critical part of the government’s deficit reduction strategy.

And speaking of magical thinking, the government continues to talk about public private partnerships as if the private partners provide the services at no cost to the public.

More ominously, the government continues to talk about “monetizing” public assets as if the loss of the revenue streams generated by these assets is just a detail that can be ignored.

And as if Ontario’s sad experience with complex public private partnerships like Ornge and the gas plants had never happened. The government talks about unlocking the value of government assets as if the case has been made that selling or loaning public assets to the private sector will actually generate more than the revenue foregone.

That case has not been made.

Economist Hugh Mackenzie is a CCPA Research Associate.

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