Entries in infrastructure (8)

Wednesday
Aug102016

Let's not miss Opportunity Drive on infrastructure

Strong infrastructure to move our goods = a strong economy.

Canada is the second largest country in the world with 9.985 million km2 to its credit.  The vastness and
geographical variety across the country and from province to province are what make Canada unique; are a source of pride to Canadians', are an economic driver, and yet present a constant challenge.  

98% of businesses in Canada are categorized as small business.  These businesses have products that need to get to market, to other businesses and to consumers in their own communities, and they need the
infrastructure to do it, stay competitive and reach their growth potential.  

As found in the provincial Ministry of Transportation (MTO) Freight Guidelines, “freight movement plays a major role in the provincial economy, generating large revenues and supplying jobs for hundreds of thousands of employees. According to Transport Canada, in the year 2011, trade between Ontario and the United States amounted to over $284 billion. 38% of Ontario’s economy comes from freight-intensive industries. In that same year, Ontario led Canada in exports to countries other than the United States, with approximately $40 billion in goods exported. Ontario’s economy is multi-faceted, ranging from farming to manufacturing to 21st century knowledge economy businesses. All  of these depend on the movement of freight in some way.”

The MTO defines freight movement as “the transportation of goods by road, rail, air, water and even pipeline. It includes: the movement of raw natural resources; the movement of refined goods for manufacturing, like steel, or auto parts; and the movement of finished products for markets like furniture or food products.”

It’s why businesses and business groups such as the Peterborough Chamber of Commerce are advocating loudly for infrastructure, to be precise - trade-enabling infrastructure.  Trade-enabling infrastructure is roads, rail, and waterways that can move the goods our businesses produce and receive the goods that are needed to keep local economies moving forward.

Infrastructure funding was a large part of the 2016 federal budget, and it’s been said that Ontario and Canada are approaching a crucial infrastructure juncture in that much of the built infrastructure from post World War II (roads, bridges, etc) is reaching the end of life and requires a major overhaul.  With tens of
millions in projects required in the City and County of Peterborough alone, never mind across the country, and the limited ability of municipalities to responsibly foot the bill, it is imperative that policies and programs are developed to provide focused, timely and innovative solutions.   

Next month chambers of commerce and boards of trade will be gathering at the Canadian Chamber of Commerce AGM to make suggestions to government around various issues including infrastructure
and how to power forward the Canadian economy.  One way is a coordinated infrastructure strategy that incorporates all of the tools in the toolkit, including all levels of government and the private sector, uses funding models, is consistent in its application and recognizes the importance of all modalities: road, rail, water and air. 

There is a lot of ground to cover to move goods in Canada.  We need to be at the leading edge of
infrastructure innovation in order to meet and conquer our challenges and ensure Canada is ready to move the world through our borders. 

Thursday
Jul072016

How infrastructure drives our economy

The importance of solid built infrastructure to our economy cannot be ignored.  Earlier this week, the Minister of Infrastructure Bob Chiarelli joined our MPP and Minister of Agriculture, Food and Rural Affairs Jeff Leal in Peterborough County to announce a top-up fund for small, rural and northern municipalities.  

In announcing the program, which will be distributed as part of the Ontario Community Infrastructure Fund (OCIF), the Ministers spoke to how roads and bridges are critical pieces of ensuring a strong economy.  The challenge is the cost of repairing the current infrastructure to ensure our economy moves forward.  

“Peterborough County has about $75 million in infrastructure repair needs,” said Warden J. Murray Jones, while Mayor Daryl Bennett emphasized the need in the City.   

The top-up application component will allow municipalities to submit proposals for specific infrastructure projects.  This application-based funding is aimed at allowing smaller communities to bring their total OCIF funding up to $2 million over two years to ensure all communities have opportunities to address larger, critical infrastructure projects.  

“By expanding the OCIF, our government has shown municipalities that we are committed to working with them to address critical infrastructure needs in their communities through predictable, stable funding,” said Jeff Leal, Minister of Agriculture, Food and Rural Affairs and MPP for Peterborough.  

Over the next three years, $670 million will be invested in the fund.  Infrastructure and the gap associated with the needs versus the ability to fix have been highlighted as a barrier to success for business. A recent report by the Ontario Chamber of Commerce identifies that about half of the infrastructure gap is accounted for by road and bridge assets.  The report encourages the government to spend infrastructure dollars wisely and on projects that are considered trade enabling, from roads and bridges to rail and ports. 

The announcement comes at an opportune time.  Last week Stuart Harrison and I joined a tour of two large operations in Havelock-Belmont-Methuen Township: the ethanol plant and quarry owned and operated by Drain Bros. and the Unimin mine.  Both are doing really neat innovative projects with their businesses.  In the case of Drain Bros. they have found and/or developed uses for many of the materials or by-products so that there is little wasted in their processes.   

Unimin is planning a modernization of its plant to increase efficiency and capability of producing their product, nepheline syenite.  

These types of infrastructure announcements help municipalities ensure that roads and bridges are in good working condition so that companies such as Drain Bros. and Unimin can grow, reach new markets, and offer jobs in their communities.   

Wednesday
Jan062016

The messy necessity of infrastructure

Expect to hear a lot about infrastructure in 2016.  And with good reason. Canada, its provinces and municipalities are facing an infrastructure crisis on several levels.  Some of the challenges include identifying the need for new infrastructure projects, finding the money to repair the current inventory of built infrastructure, and determining how to finance new infrastructure projects.  Politically, the infrastructure plight has not gone unnoticed.  In their 2015 provincial budget, the Ontario Government announced a $130
billion 10 year infrastructure plan and during the 2015 election campaign, the Trudeau Government pledged $10 billion in deficit spending over the next three years on infrastructure projects.  

While we wait to see how those promises will be fulfilled, there’s no doubt that the condition of our built infrastructure of roads, highways, sewers, bridges, rail, ports and land border crossings has an impact on the ability of businesses in every corner of the province from -Peterborough to Ottawa to Thunder Bay, Sarnia and the GTA- to get their goods to market.  The business perspective on this issue is straight forward: solid infrastructure in our communities, across our provinces and at our border crossings is imperative to a successful economy.  

The Peterborough Chamber of Commerce and about a dozen other Ontario Chambers, led by the London Chamber of Commerce, took this issue to the national stage at the Canadian Chamber Annual General Meeting.  There over 300 delegates representing chambers of commerce, boards of trade and the business community across the country voted in favour of expressing, with one united voice, the significance
of infrastructure investment to the business community and the everyday lives of Canadians.

The research that went into building a case for a long term, stable commitment to infrastructures gives us a good overview of the infrastructure deficit in Canada:

 

  • Infrastructure spending in Canada as a percentage of GDP declined annually from 3% in 1960 to 1.5% by 2004
  • Around the world the average long run expenditure on infrastructure is 3.8% of GDP per year (just to maintain the current infrastructure inventory in Canada would require 2.9% of GDP per year)
  • A recent Mowat Centre study shows the federal share of spending on infrastructure has declined from 31% to 10% over the last 50 years

 

The result is a dramatic shift of infrastructure responsibility to municipalities.  According to the Mowat Centre municipalities now account for 67% of all infrastructure spending, which is up 38% from 1961.  The impact is shocking and very real as Peterborough County Warden J. Murray Jones pointed out in his speech to the Rotary Club this week,“With only so much money in the coffer and numerous roads and bridges in need of repair, Jones said it's hard to make that money stretch” (Peterborough Examiner, January 5, 2016.)  The County
estimates that over the next 10 years $135 million will be needed to maintain existing road and bridge infrastructure.  And while municipalities seek federal and/or provincial funding, they still have to come up with matching grants, or half the funding. 

The Canadian Centre for Policy Alternatives (CCPA) says the cumulative effect of underinvestment over the past 50 years means Canada is missing out on $145 billion of infrastructure.  

Current programs designed to mitigate the pressure of infrastructure needs include the Building Canada Fund, the Green Infrastructure Fund, the GST rebate for municipalities, and the permanent Gas Tax Fund, which is indexed at two percent.  However, even with provincial programs on top of the aforementioned federal programs, a funding divide still exists.  

To bridge that divide the business community is asking that the federal government:

 

  1. Increase, by at least 20 percent, the funds allocated through the 10-year Building Canada Plan.
  2. Review global best practices in public infrastructure financing, and investigate the feasibility of introducing new public and private financing tools that deliver value for the money invested.
  3. Ensure that investments in public infrastructure are targeted to projects that result in the largest net gains for the economy, and must include strategic investments in Canada’s major economic hubs, gateways, and public transit systems.
  4. Validate the effectiveness of P3 projects to ensure that all parties are able to efficiently manage those projects so that they result in a quality product that is delivered in a timely manner with a reasonable return on investment.
  5. Provide stable, predictable and equitable financing in all projects, including advance notice of available funds, criteria and application process to ensure the projects needed have access to the funds available in a timely manner. 

 

The suggested revenue tools and long term strategy in the recommendations are geared to creating a Canada that is competitive, focussed and reaping the greatest economic benefit for all of its communities. Infrastructure is messy, it’s not very flashy, not cut and dry. Repairs and the building of infrastructure can cause inconvenience to communities and businesses, but in the end, that same infrastructure allows our businesses to thrive, it creates jobs and moves communities forward.

Comment through the "Peterborough Chamber" group of LinkedIn. 

Wednesday
Nov182015

Federal mandate letters reveal government's stance on business

There was great interest last week when Prime Minister Trudeau released the mandate letters outlining the responsibilities and commitments of his new cabinet.  

In truth, the business community can be connected to every ministry of government, however, there are a few including Small Business, Employment, Workforce Development and Labour and Finance that have direct impact.

In the mandate letter to Finance Minister Bill Morneau, Prime Minister Trudeau asks him to “meet with your provincial and territorial colleagues at your earliest opportunity to begin a process to enhance the Canada Pension Plan to provide more income security to Canadians when they retire.” 

“There is some comfort, in that, there doesn’t seem to be a rush to action on CPP as was felt there might be when the Liberals were elected,” says Hendrik Brakel, Senior Director Economy, Finance and Tax Policy, Canadian Chamber. “However, the Canadian Chamber is watching with concern any possible increases to payroll taxes such as CPP as employer contributions act as a tax that makes it more expensive to hire staff, which can depress employment.” 

At the Canadian Chamber of Commerce (CCC) Annual General Meeting in Ottawa last month just prior to the election, the Peterborough and Kingston Chambers of Commerce put forward a policy resolution on reforming the Canada Pension Plan to allow employees the option of contributing more to the plan.  

The CPP discussions could also have an impact on the implementation of the proposed Ontario Retirement Pension Plan (ORPP).  The next opportunity to learn more about the plan will be in December when an economic analysis by the Conference Board of Canada is released.

Meanwhile, the Minister of Employment, Workforce Development and Labour MaryAnn Mihychuk is tasked with, “improving our Employment Insurance (EI) system so that it is better aligned with the realities of today’s labour market and serves workers and employers”.  Included in the seven specific tasks identified are reducing EI premiums and ensuring EI contributions are only used to fund EI programs. 

While that statement seems to be promising, the concern is that workforce training is still considered part of EI programs. That is an issue Brakel also speaks to: “the other major payroll tax, employment insurance, has been pulling in far more money than it was paying out for many years and so it was set to decline from 1.88% to 1.47% in 2017. The Liberals have promised to tax an extra $500 million of revenues from keeping the EI rate at 1.65% in order to pay for additional training. The Canadian Chamber has for a long time been vehemently opposed to using EI premiums for purposes other than funding the insurance it provides.”

The Minister of Small Business and Tourism Bardish Chagger has been asked to work with the Minister of Finance as the small business tax rate reduction is implemented.  This is a previous government promise that the Liberals are keeping.  The small business tax rate will be reduced from 11 percent to 9 percent over the next few years.  Also in the Small Business mandate is a request to work with the Minister of International Trade to ensure that a new international trade strategy is supportive of small and medium-sized enterprises (SMEs), so that they are able to take advantage of government financing and export-oriented supports.  

Brakel also identified an interesting point in the Finance Minister’s letter: the creation of a Canadian Infrastructure Bank to provide low-cost financing (including loan guarantees) for new municipal infrastructure projects in our priority investment areas.  “The federal government has a very high credit rating, making this type of financing available will help municipalities,” says Brakel. “The Chamber is very much aware of the need for economic infrastructure and this will support municipalities with their infrastructure needs.”

Further to the commitment of the Chamber Network nationally, heading into the CCC AGM, Chambers across Ontario signed onto a resolution emphasizing the need for infrastructure to be a focus of government. One of the five recommendations is to provide stable, predictable and equitable financing in all projects, including advance notice of available funds, criteria and application processes to ensure the projects needed have access to the funds available in a timely manner.  The resolution was passed by delegates at the AGM.  

By and large, the mandate letters fall very much in line with the campaign promises of the Liberal party.  As the government continues to unfold its mandate and release its throne speech in the first week of December, the Peterborough Chamber will be watching and commenting as necessary to ensure the legislative framework helps strengthen business. 

Comment through the "Peterborough Chamber" group of LinkedIn.

 

Wednesday
Oct282015

What's on the minds of Peterborough businesses?

The stack of issues impacting the business community is growing.  In fact, you could say that 2015 has been a growth year, but not always in a good way.  With all of the issues and concerns that our local businesses must wade through to stay compliant, to plan for their future, to know if their business is moving in the direction they want and whether or not they’re ready to hire, perseverance is required.  Peterborough has seen a number of new businesses open in our downtown and industrial park, and along our two other main commercial thoroughfares, Lansdowne and Chemong. For that, we thank you.  

At the Peterborough Chamber of Commerce we’ve been working with the Chamber network to make sure your concerns are heard at all levels of government.  This includes programs to help bring taxes to a level consistent with other like communities, red tape and regulation, pension plans, workplace insurance, infrastructure needs for transportation of goods, trade deals, and reaching new markets. 

Municipally, we have fought to get the Tax Ratio Reduction Program back into the City of Peterborough budget.  Our partners in this venture the Kawartha Manufacturers Association and Peterborough and the Kawarthas Association of Realtors see the value in the program, which will put Peterborough on a more level playing field with communities like Barrie.

Provincially, the list of areas of concern has grown over the past year.  The proposed Ontario Retirement Pension Plan (ORPP) is still set to come into effect January 2017 on a phased in basis.  Employers would pay 1.9% for each employee to a maximum of $1,643 per year.  Employees would contribute a matching amount. There are some exceptions and the provincial government is currently saying that if the Canada Pension Plan (CPP) is improved upon then there may be no need for the ORPP.  The Peterborough and Kingston Chambers of Commerce successfully presented a policy resolution in Ottawa asking the federal government to allow employees to contribute more to CPP should they choose.  The Canadian Chamber of Commerce will now be able to take that recommendation from the business community to the federal government.

The rate framework of the Workplace Safety and Insurance Board is in the midst of major overhaul.  Some of the changes include the number of rate groups and how a rate is determined.  The Peterborough Chamber was involved in a taskforce examining the issue and submitted a report to the provincial government representing the business perspective.  

Federally, the business community and the Chamber Network are advocating for projects such as Energy East, which will not only be a national job creator but an opportunity to use more of Canada’s natural resources in our own country.  Also on the list is help for innovation investment in new energy technologies, a place in the Trans Pacific Partnership (TPP) deal, and an improved and more open relationship between the business community and rail.

The graphic shows a number of issues the Peterborough Chamber of Commerce is currently working to address through our lobbying and advocacy efforts. If there is an issue you feel we have missed please let us know through  sandra@peterboroughchamber.ca or 705.748.9771 x215.

The mission of the Chamber is to strengthen the business community, speak as one to government, and push for legislative change that allows Peterborough businesses to stay competitive.

Look for our Policy Report Card 2014 under "Lobbying" at peterboroughchamber.ca

Comment through the "Peterborough Chamber" LinkedIn group.