Multiple projects may create jobs, or only be a short-term economic solution
The recently released Capital Plan for Alberta calls for a 15 per cent increase in infrastructure spending by the NDP government, and while some are hopeful this public spending will help turn the current state of the economy around, others see it only as a short-term solution.
The much-anticipated budget, released in mid-April, promised a total of $34 billion to be spent over the course of the next five years on projects involving schools, hospitals and roads via the Alberta Jobs Plan.
Projects include the high profile Calgary Cancer Centre, which was promised $830 million, although it still remains underfunded almost $500 million. Additionally, there was almost $3 billion allotted for ring road projects in both Calgary and Edmonton.
According to the research of a team of Calgary Journal reporters, there are more than 30 projects either underway or proposed in Calgary with a budget of $1 million and higher, totalling approximately $4 billion. In addition, the proposed Green Line, a light rail transit route connecting south and north Calgary, is expected to cost between $4-5 billion.
However, what has remained murky is how exactly the NDP government will address funding for construction of the Green Line.
Peter Demong, the councillor of Ward 14, admitted to being disappointed that plans weren’t announced clearly during the budget reveal.
He says the city has set aside money to build the massive LRT line, and with the federal government already promising its share, “what we’re really waiting on is the province to say they’re going to put in their third of the project, which will give us enough to do a good portion of the Green Line.”
Brian Mason, the minister of infrastructure and transportation, maintains he is committed to devoting funding to the Green Line.
“We understand the importance of the Green Line in Calgary's transit future, and while there is no line item in the Capital Plan for the Green Line, I'm in talks with Mayor Nenshi to see how we can work together to bring it forward.”
Mason went on to detail the $2 billion the Plan promised to invest in “green infrastructure, including transit.”
The Green Line LRT project is on the priority list of several city councillors, including Shane Keating, the Ward 11 councillor.
“We’re talking about a new transit line which, technically, will eventually cover over 400,000 people and 200,000 jobs within there,” Keating says.
While actual construction for the Green Line may not happen immediately, Keating points out that there are related projects that could begin within the year.
“A lot of the individuals who are unemployed right now are engineers and environmentalists and geologists that would normally work in the oil industry. We could be putting them to work right now doing a lot of the pre-engineering and a lot of the pre-studies for the Green Line if the funds came out much faster than we thought.”
Mayor Naheed Nenshi sees the Green Line as an important long-term goal but, according to a recent Globe and Mail article, immediate infrastructure funding is necessary in order to begin “shovel-ready projects” to stimulate job growth.
Some “shovel-ready projects” may include maintenance and make-work projects like road construction or – in the case of the 1990s economic slump – the refurbishment of NHL arenas.
However, Herbert Emery, a University of Calgary professor of economics, is wary of what he deems quick-fix economic solutions.
“When they’re using terms like ‘shovel-ready projects’ we should all be kind of nervous in what they’re counting as ‘shovel ready.’ What we’re really looking for is some kind of prioritization.”
Emery sees these make-work construction projects as short-term solutions, saying that they simply can’t create the kind of long-term job growth Calgary needs.
“You get short-term jobs out of it, which on the one hand is great, but that project could also be done by a municipality raising its own tax base, if they really thought it made sense,” says Emery.
He says that although politicians can use the economic downturn to lobby for their own agenda, the focus on job creation should instead be “to invest in projects that make sense, so build some highways or bridges that have been on the wish list that will really benefit society.”
Emery believes the answer to bringing about an economic upturn lies in stimulating private sector investment in projects such as building pipelines.
“If you look at the scale of public sector spending on investment compared to private sector it’s like a one-tenth scale.”
He agrees, however, that there is some benefit to increased public spending.
“The public sector is useful for offsetting some of the downturn when the private sector investment comes off, but they just don’t have enough capacity to replace it. “
Coun. Demong agrees that spending on infrastructure is “a short-term solution, what we can do in the short-term to try to make things better while we hope and pray that the price of oil goes up and the private industry will actually integrate itself.”
“We’re simply saying we’ve got a short period of time where there’s lots of people who are unemployed, that prices are cheaper to do stuff now,” says Demong. “It’s not meant to be an economic solution.”
For more information on the Capital Plan announcement, and what local government is planning to do with their allocated funds here in Calgary, visit the Calgary Journal’s in-depth analysis website discussing the upcoming projects here.
Thumbnail photo by Hannah Willinger.
- By Jennifer Dorozio