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 producers’ ‘willingness to pay,’
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
capital.

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.

2 comments

  • Canada’s Boreal Forests filter aquifers and protect land from flood damage amounting to a service of $10-$70 billion annually, free of charge. Global Warming has unleashed the Mountain Pine Beetle upon the boreal forest. If you assume a 25% chance the entire forest will be lost for a few decades and no time-discounting (there are many other services forests provide), this is single-handedly a $400 billion infrastructure charge.

    And the thing is, Global Warming hasn’t really started yet. The Mountain Pine Beetle is a very minor effect. The economics Conservatives use is broken. A good rule of thumb is that any costed GDP has at least 10x as much uncosted capital at its base (is it just an irony that we spend 1/10 of our lives employed?).
    The above Stats Canada conclusion is that taxes should be steepened to pay for more public infrastructure (with some needed prioritizing as a $100 billion annual deficit can’t be made up for from income taxes alone in any politically realistic scenario). Yet misses entirely where we really derive our aquifers from.
    If the goal really is to kill future civilians and hasten armageddon they way Canadian and American governments are acting towards via retarded environmental platforms, I’ve some creative ideas to add to the mix.

  • I’ve learned pines succumbed to MPB still protect soil from eroding for the most part. So my cost estimate above is likely 3-4x too high.
    Also, on some other thread here I mentioned Canada could be a health care provider model. On that same day the Newfoundland breast cancer fiasco was publicized and Japan announced they are taxing companies whose employees don’t exercise.
    Upon reading the Green Party of Canada’s health care platform, I chuckled to myself how naive it is to assume healthy eating and fitness alone can guide a health platform. But the Western countries that successfully reign in sugar and fast food industries, will probably wind up being the ones able to deliver sustainable health care.
    This seems divorced from the subject header, but jurisdictions able to keep citizens unportly, will be the ones able to install this $300 public health infrastructure at every hospital bed and save further taxpayer dollars: http://www.care-mates.com/blog/?p=146

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