CANADA

A major policy change

Ottawa will spend billions on public works

GLEN ALLEN October 5 1992
CANADA

A major policy change

Ottawa will spend billions on public works

GLEN ALLEN October 5 1992

A major policy change

Ottawa will spend billions on public works

The small community of Sussex in southcentral New Brunswick lies at one of the most congested highway junctions in the nation. The mining and dairy-farming centre of 4,100 people is situated on the mostly two-lane Trans-Canada Highway, the province’s and the region’s major highway. Sussex also marks the starting point of Highway 1, another largely two-lane thoroughfare that leads southwest from the Trans-Canada to Saint John and then to St. Stephen, the region’s principal exit to the United States. Says Sussex Mayor Kenneth Friars: “The traffic through here is incredible. It’s not safe and the roadway is deteriorating.” For years, Sussex town council has lobbied the federal and New Brunswick governments to widen the highways—efforts that may soon be rewarded. As revealed earlier by Maclean ’s, Ottawa is poised to announce a huge federal-provincial public-works project that would lead to spending of up to $28 billion over 10 years. At least $2 billion of that will be spent in New Brunswick—and will include widening both the Trans-Canada and Highway 1 to four lanes. Said Friars: “If it happens tomorrow it won’t be too soon.”

About $14 billion will be spent on a coast-tocoast upgrading of 24,500 km of the national highway system. The sum may double if Ottawa decides to include in the program funding

for a fixed-link bridge from New Brunswick to Prince Edward Island and other improvements to the nation’s transportation infrastructure such as repairing and upgrading airport runways. The massive spending would be a bold attempt to stimulate Canada’s recovery from a severe recession—while marking a sea change in the federal Conservatives’ policy of spending restraint. It could also play a role in the constitutional debate. The program may be announced before the Oct. 26 referendum—and promoted as concrete evidence of the benefits of national unity. But, said Harry Gow, vicepresident of the transportation lobby group Transport 2000 Canada, who is opposed to the plan: “This is political pump priming.”

Liberal transport critic John Manley made a similar observation. “I have no doubt that this has everything to do with the referendum—or a future election,” he said. But he added, “I can’t criticize them for doing something that we have been urging them to do.” Provincial officials, who with their federal counterparts have been planning the program since 1987, also insist that an upgrade of the nation’s deteriorating highway system is long overdue. And they say that a recession is the best time to begin. For one thing, the project could create as many as 150,000 man-years of employment over a decade, with huge spinoff benefits. For another,

B.C. Transportation Minister Arthur Charbonneau says that there are bargains to be had. “The contractors are hungry,” Charbonneau added. “We will get more built per dollar. Now is the time to do it.”

Proponents of the program point out that there will be other benefits, as well. According to a 1989 federalprovincial study, improved roads could reduce by 160 the approximately 4,000 highway fatalities that occur every year. As well, the report noted that an enhanced highway system would give a boost to Canada’s tourism industry by promoting travel within the country as well as from the United States. It would also help Canadian businesses by improving access to markets both within Canada and the United States. And better highways would result in reduced transportation costs, which the report said would increase “the competitiveness of Canadian industries.” Says Fred Morley, a senior economist with the Halifax-based Atlantic Provinces Economic Council: “If this had come a couple of years ago, we probably wouldn’t be in this stalled recovery. The bang for the buck for this stuff is almost immediate.”

For the federal government, the highway program certainly represents a left turn. Ottawa traditionally has not paid for highway con-

struction, although it covered 50 per cent of the cost of building the Trans-Canada Highway and is responsible for the building and maintenance of highways in national parks. And, since coming to power in 1984, the federal Conservatives have repeatedly emphasized the need for fiscal restraint in their war on the national deficit. As recently as Feb. 25, when he tabled his 1992-1993 budget, Finance Minister Donald Mazankowski declared: “Governments do not have the capacity to inject massive stimulus into the economy.” Mazankowski did leave the door open for highway improvements. But, he said bluntly: “We cannot get out of a hole by digging deeper.”

That position has clearly changed. Maclean ’s has learned that the program will apply to highways that are identified as being “of national significance.” While those 24,500 km in highways represent less than three per cent of Canada’s total road network, they still carry more than one-quarter of all traffic in the nation. Included are 5,500 km in British Columbia, 4,900 km in Ontario, 3,600 km in Alberta and 2,900 km in Quebec. These roads will undergo improvements ranging from simple resurfacing to widening and rebuilding. In addition, 800 of the network’s 3,500 bridges will be repaired or rebuilt.

Maclean ’s has also learned that British Columbia, Ontario, Alberta and New Brunswick would each require improvements costing about $2.2 billion. For Quebec, the estimate is $1.4 billion and for Nova Scotia about $880 million. Saskatchewan and Manitoba would each require about $660 million, while Newfoundland’s costs would be about $330 million and Prince Edward Island’s $100 million, with $700 million for the Yukon and Northwest Territories.

Still, critics say that the project will entail

additional costs of another kind. Gow, for one, says that an improved highway system may result in further cutbacks to Canada’s threatened rail system. Declared Gow: “What this will do will be to provide severe competition for

the railways. People will start looking at how cheap it is to move stuff over all these free highways and start forsaking the railways. And environmentalists are telling us that we need to get our atmospheric emissions under control. This highway diet does us no good.” Added the Liberals’ Manley: “The government also ought to be looking at levelling the playing field between the trucking mode and the railways,” he said. “Railways are getting hammered by the competition from the United States and by the trucks. I think there are some good reasons why we want to preserve a national railway freight system.”

But for proponents of the project, the benefits clearly override any drawbacks. Provincial government sources told Maclean’s that Ottawa and the provinces are still attempting to reach agreement on funding. The provinces, they say, want the federal government to cover 65 per cent of the bill; Ottawa wants to split costs equally with the provinces. But there is another stumbling block: governments have yet to decide on how to raise the money involved. Still, most of the participants are anxious to have an arrangement finalized in time for an announcement before the Oct. 26 referendum. And for a federal government looking for Yes votes in the coming weeks, making political use of a public-works bonanza—one that will eventually take place anyway—will clearly be hard to resist.

GLEN ALLEN

LUKE FISHER