By
Pace Law

Infrastructure Modernization in Canada: Time For Innovation

February 1, 2013

Hon. Gerry Weiner – Pace Immigration: Among the news stories that received prominent coverage in 2012 were the decisive steps the Harper Government has launched to reform Canada’s immigration system and the critical need to finance the repair and modernization of the deteriorating local infrastructure in Canada. While these stories may seem unconnected, using innovative strategies to achieve the former may actually help solve the latter.
From falling pieces off the Gardiner Expressway in Toronto, to broken water mains and collapsing roads in Ottawa, to the collapse of the Ville Marie Tunnel in Montreal, to blunt warnings from the Premier of Alberta, the need for infrastructure renewal is a situation that must be addressed. While all levels of Government and the Federation of Canadian Municipalities (FCM) have acknowledged the critical need for action, what’s lacking is a funding strategy to address what FCM has estimated as a $170B funding deficit required over the next 30 years.
Current federal contributions to local infrastructure are insufficient to meet this daunting challenge. To its credit, Infrastructure Canada has launched stakeholder consultations to try and design solutions that don’t cripple local municipalities and burden Canadians with unprecedented local tax increases to ensure their community infrastructure doesn’t crumble around them. Finding a long term, non tax funding source is clearly a desirable strategy and the good news is that it may be available through reforms to the immigration system.
Immigration reform is a multi-faceted, complex issue but, fortunately, Citizenship and Immigration Minister Jason Kenney has clearly immersed himself in the myriad details of how our system works and how…and why…it doesn’t. The Department has launched extensive public consultations and the result has been a host of much needed changes with more on the way.
The announced reforms also include a deliberate effort to increase the economic benefit to Canadians arising from immigration. This will be done through a variety of reforms including a modernized skilled worker selection so that the people approved possess the workplace skills required by the Canadian marketplace and that they are proactively matched with Canadian employers.
Another area of intended reform is an overhaul of the entire immigrant investor program where the goal is to maximize the economic benefit to Canadians. Canada is not alone in this modernization as other Western countries, such as the U.S. and Australia, are taking similar steps for like reasons.
Hopefully, the reforms will include a targeted investment program with enhanced investor screening that supports defined Canadian economic priorities like financing infrastructure modernization. The Program could also help finance new infrastructure projects like the announced Detroit-Windsor Bridge or the contemplated twinning of Highway 63 to Alberta’s oil sands.
Such a program could see foreign high net worth individuals invest $ 5 million each into designated municipal infrastructure projects put forward by Canadian municipalities and pre-approved by Infrastructure Canada. The funds would be secured by a municipal bond carrying a competitive rate of interest and guaranteed over a 30-year life span, both in terms of interest and principal, by the federal government.
There should be defined rules and timelines for processing, citizenship acquisition, private sale and redemption of the bonds as well as forfeiture upon breach of conditions. The entire program should also be self financed and transparent.
There is clearly an unprecedented need for a non tax funding strategy to address the infrastructure deficit in Canada. Fortunately, there is an equally unprecedented opportunity to achieve this goal through the modernization of the current immigrant investor program.
These kind of “win-win” situations are relatively rare in public policy involving expenditures so hopefully, 2013 will see Minister Kenney announcing such a specialized infrastructure investment program. Canadians will be well served if he does.
Gerry Weiner is a former Canadian Minister of Citizenship and Immigration who introduced the investor immigrant program and who now works as a Special Advisor to Pace Law Firm in Toronto.
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