Public infrastructure in Canada
A new release from Statistics Canada on infrastructure finds that:
In the public sector, infrastructure is primarily concentrated in schools, hospitals, roads and water mains. In 2002, about one-third (34%) of assets were devoted to transportation in the public sector, unchanged from 1970. About 26% were devoted to recreation, culture and education, 13% to health and social protection and 11% to waste, water, sewage and energy distribution.
… In the public sector, the ratio of infrastructure capital to total GDP has fallen dramatically, from over 35% in the 1970s, to about 20% in 2002.
This is perhaps not surprising given warnings at the municipal level about the state of public infrastructure in Canada, and the “infrastructure deficit” that has accumulated.
One interesting add-on to this is a study that came out of Statscan in 2004 that found:
The marginal benefits of public capital are positive in all industries. The magnitudes of
these benefits, which can be interpreted as a measure of producersâ€™ â€˜willingness to pay,â€™
varies considerably across industries and over time. We observe that the average of
marginal benefits across all industries is about 17 cents for every dollar increase of public
It is often assumed that tax cuts are the only way to boost productivity in Canada, despite some shabby empirical evidence that they would indeed do so. And yet a 17% annual return seems pretty good to me as a public investment comparator.