By Casey Vander Ploeg
In the Leader-Post, StarPhoenix
April 22, 2013
Saskatchewan is Canada’s “Land of Living Skies” and the province is certainly taking its place in the sun these days. Consider the 2013 budget released a few weeks ago. In all likelihood, that budget will see Saskatchewan posting the strongest fiscal results of any province. What’s more, the fiscal outlook is not coming at the expense of investments in Saskatchewan’s infrastructure.
This is good news because infrastructure—if it is done right—boosts economic growth.
The budget proposes $850 million in capital investment for 2013-14, which is an 8% increase over the $790 million budgeted last year. In the last six years, Saskatchewan has pumped $6 billion into infrastructure—an average investment of $1 billion annually. To put that amount in context, the province invested an average of $300 million annually for most of the previous 20 years.
Dollars aside, the real encouraging thing here is how Saskatchewan is emerging as one of Canada’s leaders on the infrastructure front.
In 2011, the province committed to sharing one percentage point of the provincial sales tax with municipalities for local infrastructure. The City of Regina has played host to two major national infrastructure summits, and is also home to Communities of Tomorrow, a non-profit group working to lever innovation in infrastructure provision. Saskatchewan’s Plan for Growth, released by the Premier in October 2012, outlines six priorities the province will pursue to grow the provincial economy.
The first priority on that list? Infrastructure.
Along comes budget 2013. “Growth comes with challenges,” said Finance Minister Ken Krawetz. “One of the biggest challenges of growth is making sure we have the infrastructure we need for a growing economy.”
Those are more than words for Minister Krawetz, who went on to announce a new Treasury Board Crown called SaskBuilds.
The new Crown’s mandate is to prioritize the infrastructure needed in the province and identify the best way to get it built. This mandate is critical because you need to build the right infrastructure, in the right place, at the right time, in the right way, or you are better off not building it.
In a recent study published by the Canada West Foundation titled “At the Intersection: The Case for Sustained and Strategic Public Infrastructure Investment,” we urged governments to maintain a high level of investment in public infrastructure because sustained and strategic investments in public infrastructure increases productivity and boosts economic growth. Of course, the key word here is “strategic.”
Being strategic is not easy, but the SaskBuilds mandate sets it and the province on the right course.
To make it all happen, SaskBuilds will have to fully embrace innovation. Innovation is key because resolving Saskatchewan’s infrastructure challenge—a challenge it shares with every other province—is going to take a lot more than tinkering with the status quo.
The search for workable infrastructure solutions must go beyond the traditional approaches of the past and incorporate fresh ideas. To the extent that SaskBuilds pushes the innovation envelope, it can show the way for the other provinces.
To enhance its prospects for success, SaskBuilds should keep three things in mind.
First, it is important for the new agency to avoid a culture of timidity. Neither should its role be narrowly restricted to facilitating public-private partnerships (P3s). The infrastructure innovation menu is long and continues to grow. Countries around the world are experimenting with a plethora of innovations such as digitization and trenchless technologies.
On the financing front, community bonds, tax incremental financing and local option infrastructure levies are just a few examples of innovative ways to finance infrastructure projects.
Second, SaskBuilds should not ignore the value of refurbishing existing infrastructure. Renewal can be even more economic-enhancing than sexy new builds.
Third, a clear focus for SaskBuilds must be to identify and pursue the projects that hold the most promise to boost productivity and enhance the provincial economy over the long-term, even if the politics of infrastructure pushes toward other less strategic or economically-beneficial investments.
SaskBuilds is another example of the West’s penchant for policy innovation. Infrastructure is an issue that will not be going away soon, and the need to reinvest in public assets runs into the trillions globally. There is a tremendous market out there for new approaches to big infrastructure problems, and it would be great to see SaskBuilds emerge as a leader in that market.
Casey Vander Ploeg is a Senior Policy Analyst at the Canada West Foundation. The Canada West Foundation is the only evidence-based think tank with an exclusive focus on the policies that shape the West’s quality of life.