"White elephants for a new generation"
KONRAD YAKABUSKI
Globe and Mail Update
The Turcot interchange in southwest Montreal is a remnant from a more confident era, when concrete and cars equalled progress and Expo '67 epitomized the promise of Canada's then-premier metropolis.
Today, the 42-year-old monstrosity that rises as much as 30 metres above abandoned rail yards is a dilapidated eyesore whose advanced state of decomposition has thousands of risk-averse Montrealers taking the long way home simply to avoid driving on or under what remains a pivotal road link.
For years, Quebeckers bemoaned the decrepit state of their roads with a shrug of the shoulders. But the collapse of a suburban Montreal overpass two years ago, killing five, turned their resignation into indignation. A subsequent public inquiry showed it wasn't just their imagination: Chronic underinvestment in the province's transportation infrastructure had left Quebec with the most substandard roads and viaducts in Canada.
With the inquiry's damning report in hand, it didn't take long for Jean Charest's minority Liberal government to announce an infrastructure program to double annual spending to build new roads, overpasses, schools and hospitals and repair existing ones.
In all, the government last year promised $37-billion in direct infrastructure spending between 2008 and 2013 – including $1.5-billion on replacing the Turcot interchange – and a similar amount in capital spending by Hydro-Québec over the next decade.
Mr. Charest's first announcement of the current election campaign was to pledge an additional $4-billion in infrastructure spending by 2013, holding himself up as the saviour of the provincial economy in a time of crisis. Building all those roads and hydro dams, he vowed, will create 100,000 jobs over five years.
Rather than a plan to make Quebec recession-proof, the Liberal Leader's economic strategy is a sobering reminder of the limits of infrastructure spending as a short-term stimulus – though Stephen Harper promised more of the same in yesterday's Throne Speech.
By the Quebec Finance Ministry's own calculations, as laid out in last spring's budget, the ramped-up infrastructure program should contribute only 0.2 per cent to economic growth in 2008. When Mr. Charest's ministers talk up the stimulative impact of recent government actions, it's not infrastructure spending they should mention. It's tax cuts – and most of them are federal.
In this month's economic update, the Quebec government acknowledged that all recent federal and provincial stimulative measures would add only 0.4 per cent to growth in 2009.
If Mr. Charest was of the Paul Krugman school – and subscribed to the Nobel laureate's theory of “depression economics†– he'd be decupling, rather than simply doubling, annual infrastructure spending. But even if he could afford a tenfold increase, the Liberal Leader couldn't spend the money fast enough. By the time the shovels were in the ground, the “crisis†Mr. Charest says he needs a majority to solve will have passed. And all that overbuilding would stoke inflation, create a labour shortage, and leave another generation of Quebeckers with a collection of white elephants to regret.
Besides, Mr. Charest's economic strategy already underscores Quebec's continued overdependence on state-led investment. Though it accounts for about 20.5 per cent of Canada's economy, Quebec's share of private business investment has hovered between 15 and 18 per cent for more than two decades.
It would be lower still if the government didn't grease the wheels of every supposedly private investor – two recent examples being Rio Tinto Alcan and Pratt & Whitney – with public largesse. Thankfully, there's no longer an auto maker in the province to bail out.
Short on private investment, the government counts on Hydro-Québec to partly fill the gap. But the best hydro sites have been developed. The projects on the drawing board, representing an additional 4,500 megawatts by 2015, face vastly higher production costs.
The Liberals' much-trumpeted North Plan, aimed at boosting hydro and mining development, is so short on substance it's insulting. Mr. Charest this week promised another 3,500 MW worth of unspecified energy projects – between 2015 and 2035.
The North Plan also projects 4,000 mining jobs over 10 years, but commodity prices, not the government, will determine whether that happens. It won't soon. Breakwater Resources just closed its zinc-copper mine in the Abitibi region while Canadian Royalties just shelved plans for a $520-million nickel mine in Nunavik.
In short, the Liberals have an economic strategy based on roads, dams and mines. How post-industrial. Expo it ain't.
