: Ontario’s Long-Term Report on the Economy
Chapter 5: Addressing Ontario’s Infrastructure Gap

Introduction

Public infrastructure is critical to Ontario’s global competitiveness and the quality of life every person enjoys. Well-functioning infrastructure boosts productivity and supports economic growth through lower business costs. Fast-growing urban areas will particularly benefit from infrastructure investments.

Since the 1980s, Ontario’s infrastructure has been under stress. Underinvestment, aging infrastructure and growth needs led to a gap between actual and needed infrastructure. Greater highway congestion, schools in disrepair and outdated hospitals were the result.

Infrastucture investments create jobs and growth

The Province responded to this gap by investing more, investing smarter and building better. Ontario is investing $32.5 billion over two years to create jobs and lay the foundation for economic growth. The recently completed $30 billion ReNew Ontario plan, along with the Growth Plan for the Greater Golden Horseshoe and Building a Better Tomorrow Framework, provided a blueprint to transform public infrastructure investments. These investments in transit, green energy, hospitals and schools promise to help improve Ontario’s competitiveness and enhance quality of life.

Benefits of Infrastructure

A wide range of benefits

Infrastructure has a wide range of benefits, including a positive impact on productivity. New or rehabilitated infrastructure promotes efficiency by lowering business costs. For example, reduced congestion lowers transportation costs.

Over time, the productivity of private capital is enhanced by public infrastructure investment, which increases its rate of return, leading to more business investment. Infrastructure that improves quality of life can also attract mobile, highly skilled workers, which further spurs economic growth.

Public Infrastructure Boosts Productivity

Statistics Canada research findings suggest a $1 investment in public infrastructure lowers business costs by an average of 11 cents in Canada. The gains tend to be greater for industries such as manufacturing, transportation and retail, which rely more heavily on public infrastructure for the production of their goods.

Public infrastructure’s contribution to Canadian labour productivity averaged 0.2 percentage points per year from 1962 to 2006, accounting for an average of nine per cent of labour productivity growth during this period.


Infrastructure Gap

Infrastructure needs changing

The current infrastructure challenge is in part the result of the aging of the massive stock of infrastructure built through the 1950s and 1960s. This stock is nearing the end of its useful life and, like an old car, it is expensive to repair and replace. In addition, Ontario’s infrastructure needs are changing. Infrastructure has a long life and must meet the needs not only of today but also of tomorrow. An aging population, climate change, new technology, population growth and an expanding economy add to the need to revitalize and expand Ontario’s infrastructure.

Chart 1, bar graph: Per-Capita Change in Ontario’s Public Infrastructure

Investment Needs

In a 2006 study, the Residential and Civil Construction Alliance of Ontario estimated the cost to rehabilitate the province’s public infrastructure would be $19 billion. Furthermore, it found future expansion and replacement costs of roads, electricity, hospitals and transit could be as high as $6 billion to $7 billion each year. This is in addition to the requirements for sewer and water, education facilities and social housing.

In the fall of 2008, the Provincial-Municipal Fiscal and Service Delivery Review put the cost of bringing municipal infrastructure into a good state of repair at $22.4 billion, with an additional $3.7 billion investment needed annually to meet current and future needs. Municipal infrastructure accounts for nearly half of the Province’s public infrastructure stock.


Working to Close the Infrastructure Gap

Investing for the future

The government has already made — and is continuing to make — significant contributions towards eliminating the infrastructure gap while helping to address future needs.

Chart 2, bar graph: Ontario Infrastructure Growth Outpaces that of the Rest of Canada

Completion of ReNew Ontario

Infrastructure investment plans

In 2005, the government introduced a five-year, $30 billion infrastructure investment plan called ReNew Ontario. ReNew Ontario marked the introduction of multi-year infrastructure planning, allowing partners to plan their investments better. A year earlier, the Province also released the Building a Better Tomorrow Framework, providing a smarter way to build major projects through alternative financing and procurement. In 2006, the government introduced the Growth Plan for the Greater Golden Horseshoe, to build smarter communities in Ontario’s fastest-growing region. These plans resulted in significant improvements in public-sector investments in infrastructure.

Infrastructure Ontario

In November 2005, the government created Infrastructure Ontario to help expand and renew Ontario’s public infrastructure. Infrastructure Ontario’s mandate includes the delivery of major infrastructure projects on time and on budget through the use of alternative financing and procurement (AFP).

Alternative financing and procurement transfers construction and other risks to the private sector while maintaining public control and ownership of the assets. Infrastructure Ontario has moved quickly to help renew and expand the province’s health care and other infrastructure, with six AFP projects substantially complete, 22 under construction and another 16 at various stages of procurement.

ReNew Ontario investments in key areas

ReNew Ontario called for the revitalization, modernization and expansion of the province’s public infrastructure and provided for major new investments in areas that are of primary importance to Ontarians, including transportation, health and education. ReNew Ontario was completed in 2009, a year earlier than scheduled. Below are some of the accomplishments under ReNew Ontario.

Expansion of Public Transit

The York Spadina subway extension is under construction and scheduled to enter into service in 2015. The Province has contributed $870 million to the Move Ontario Trust for this project, and for the first time subway service will be extended from the 416 to the 905 region, making travel easier in the Greater Toronto Area (GTA). The project will help to better integrate York University with GTA transit while stimulating redevelopment and intensification between Downsview Station and the Vaughan Metropolitan Centre in York Region.

Congestion Costs Are Significant

In a 2008 study, Metrolinx indicated that, within the Greater Toronto and Hamilton Area, the economic burden of congestion amounted to $3.3 billion for commuters and $2.7 billion in lost opportunities for economic expansion in 2006 alone. Economic, social and environmental costs will more than double over the next 25 years if increasing congestion is not addressed.


Increasing Efficiency and Capacity at Ontario’s Borders

Improving Ontario’s borders

The Let’s Get Windsor-Essex Moving Strategy is starting key infrastructure improvements in the Windsor-Detroit Gateway, increasing capacity at the Windsor border crossing, Ontario’s busiest gateway to the United States.

Borders and Gateways Are Critical

International trade is a major component of the province’s economy and efficient border crossings are critical for exports. Due to the commercial shift to just-in-time inventory management, and Canada’s free trade agreement with the United States and Mexico, there has been a vast increase in Ontario’s trade over the last few decades. In 2008, Ontario’s border crossings carried over $277 billion in trade. The increase in trade, however, has also led to congestion at Ontario’s border crossings. The Ontario Chamber of Commerce estimated that border congestion costs Ontario over $5 billion every year.


Helping to Lower Wait Times

Investing in health infrastructure to reduce wait times

The new construction and replacement of 23 hospitals, the expansion and upgrade of 12 cancer centres, and the expansion of 39 emergency departments will help to reduce wait times and improve the level of care in many communities.

Other highlights include the funding of an additional 100 first-year medical school spaces beginning in 2009–10. This follows the 160 spaces the Ontario government has added over the past four years. The 260 new seats represent a 38 per cent increase in first-year spaces since 2004–05. The resulting stream of new doctors will help to address physician shortages and meet the growing health care needs of an aging population.

Improving Schools

Creating good places to learn

Under ReNew Ontario, the government enabled school boards to repair, rebuild and expand schools across the province through the Good Places to Learn initiative. A total of $4.75 billion has been invested in schools, including $2.25 billion to address school renewal needs. To date, over 15,000 renewal projects are underway or completed in schools across the province.

The government is also providing funding for an additional 15,000 new spaces for university graduate programs province-wide by 2011–12.

New Infrastructure Investment

Unprecedented $32.5 billion investment for future growth

In the 2009 Budget, the Province committed to investing $32.5 billion in public infrastructure over two years. This unprecedented investment is designed not only to create and support jobs — 146,000 jobs in 2009–10 and 168,000 jobs in 2010–11 — but also to lay a foundation for future growth. It includes:

  • Providing $6.9 billion for federal–provincial infrastructure stimulus projects that will be completed over two years. These investments will improve key infrastructure, including roads and transit, colleges and universities, water and wastewater systems, and sport and recreation facilities. Many of these projects are now under construction, creating jobs and enhancing Ontario’s long-term competitiveness.
Transit and Highway Investment

Northern highways get $648 million for improvements and expansion

  • Construction of the Sheppard East Light Rail Transit (LRT). This new transit line will help increase ridership, improve air quality, reduce travel time and increase access to other transit systems in the Greater Toronto and Hamilton Area (GTHA).
  • Construction of 37 kilometres of dedicated bus lanes in York Region that will provide faster, more reliable service to commuters.
  • Expanding and improving highways, including a record $648 million investment in 2009–10 in Northern Highways. Provincial highway projects include the four-laning of Highways 11 and 69 in Northern Ontario.
  • Southern highway investments include adding high-occupancy vehicle (HOV) lanes on Highway 417 in Ottawa and the Queen Elizabeth Way in Oakville. These and other projects will help reduce congestion and lower business transportation costs.
Energy Efficiency
  • Committing $550 million over two years for a School Energy Efficiency initiative to fund improvements in school infrastructure that will reduce energy consumption and environmental impact while also generating economic stimulus. Another $50 million was committed to install renewable technology such as solar panels and geothermal systems to create a greener energy supply for schools.
Hospital Expansion

Major hospital expansions for better health care

  • Completing more than 10 alternative financing and procurement hospital projects during 2009–10 and 2010–11, including a new hospital at the North Bay Regional Health Centre, major redevelopments at Toronto’s Sunnybrook Health Sciences Centre and Sudbury Regional Hospital, and a new cancer centre in Ottawa. These new facilities will help improve area-wide health care services.

Selected Infrastructure Projects Currently Under Construction

Transportation

  • Highway 17 Gateway Rehabilitation Project, Kenora
  • Third Line Reconstruction and Upgrading, Sault Ste. Marie

Transit

  • Southwest Transitway Extension, Ottawa
  • GO Transit Improvements Across the GTHA

Health Care

  • Redevelopment of Windsor Regional Hospital’s Western Campus
  • Redevelopment of Sioux Lookout Meno-Ya-Win Health Services

Education

  • McMaster University — Centre for Spinal Cord Injury and Cancer Education and Rehabilitation, Hamilton
  • Ryerson University — Image Arts and New Media Teaching and Research Building Renewal, Toronto

Energy

  • Gosfield Wind Project, Kingsville
  • Enbridge Inc. and First Solar Project, Sarnia


Future Needs

Committing to the future

Although progress has been made in addressing Ontario’s infrastructure challenge, more work remains. The Province has made significant infrastructure commitments for the future that will improve Ontario’s competitiveness and help meet future needs including rapid population growth in the GTA and other urban centres.

Infrastructure Challenges Are Not Unique to Ontario or Canada

“Demand for infrastructure is set to continue to expand significantly in the decades ahead, driven by major factors of change such as global economic growth, technological progress, climate change, urbanization and growing congestion. However, challenges abound: many parts of infrastructure systems in OECD countries are aging rapidly, public finances are becoming increasingly tight, and infrastructure financing is becoming much more complex.”

Organisation for Economic Co-operation and Development Policy Brief, January 2008.


Addressing Future Needs

Metrolinx

Strong public transit has many benefits

Public transit is a vital component of the government’s infrastructure strategy. A strong public transit system will help ease congestion on the province’s busy roads and highways. It will improve mobility in urban centres — the areas that are expected to experience the fastest population growth over the next 20 years. It will also provide local businesses with a wider pool of workers and customers, and help make large cities more attractive places to invest. These improvements will in turn help promote productivity, growth and job creation in the fast-growing urban centres.

Delivering a seamless public transportation network

The Province has improved the planning and coordination of public transit in the GTHA by establishing Metrolinx, an agency with a mandate to improve the planning and coordination of all modes of transportation in the region. Metrolinx aims to prepare the GTHA for growth and sustained prosperity through the delivery of a seamless, integrated public transportation network. This network will enable the GTHA to accommodate population growth while reducing congestion on area roads and lowering greenhouse gas emissions. Through its MoveOntario 2020 initiative, the Province is helping to deliver an improved GTHA transportation network by committing more than $9 billion to implement new light-rail transit lines.

Health Care

Ontario is committed to a number of major hospital projects in urban areas that will help address future health care needs related to aging population and growth. Hospitals are planned for redevelopment in a number of communities. Examples include Hamilton (St. Joseph’s Healthcare, Centre for Mountain Health Services), London (St. Joseph’s Regional Mental Health Care – London/ St. Thomas) and Markham (Markham Stouffville Hospital).

Education

Full-day early learning

Ontario is investing in classroom space to accommodate full-day learning for four- and five-year-olds as part of its plan to build a well-educated workforce. Across Ontario, schools will be initially expanded to accommodate up to 35,000 kindergarten students who will be enrolled in full-day learning in September 2010. The goal is to fully implement the program for all four- and five-year-olds by 2015–16. Building the skills and education of Ontario’s future workforce is a key part of the government’s plan to create a stronger economy.

Pan American Games

Toronto and the Golden Horseshoe region have been chosen to host the 2015 Pan American and Parapan American Games. Hosting the Pan Am Games will create economic activity and drive job creation. The Games will result in much-needed new and updated sports venues, including construction of the Canadian Sports Institute of Ontario, an aquatic centre, an athletic stadium, a velodrome and two 50-metre swimming pools. This investment will leave a legacy of facilities and programs for Ontario’s amateur and recreational athletes. The Pan Am Games will bring 10,000 athletes and officials to Ontario and an estimated 250,000 tourists, providing a boost to Ontario’s tourism industry. The Games will trigger 15,000 new jobs in Ontario, primarily in construction, tourism and event support.

Green Energy Act

North America’s first feed-in tariff program

In 2009, the government enacted the Green Energy and Green Economy Act (GEA) to expedite further growth of clean, renewable energy sources such as solar, wind, hydro, biomass and biogas in Ontario. The GEA introduces North America’s first comprehensive feed-in tariff (FIT) program.

Under the FIT program, Ontario is fostering more renewable energy, including solar and wind power, where generators are paid for the electricity they produce under long-term contracts. As at December 1, 2009, the Ontario Power Authority had received 1,022 FIT applications with about 8,000 MW of potential electricity generation, or more than three times the available connection capacity of 2,500 MW. The OPA is reviewing and verifying these applications and will give priority to “shovel-ready” projects. The OPA also announced that it has started sending out conditional contract offers to the first 700 microFIT applicants.

On September 21, 2009, the Province announced a set of major projects that it had requested Hydro One to immediately proceed with planning, developing and implementing to expand and upgrade Ontario’s power transmission network to unlock significant opportunities for greener, cleaner electricity across the province.

Supporting conservation

Conservation is being supported through initiatives such as expansion of the Ontario Home Energy Savings Program, greening Ontario government facilities and requiring the broader public sector to develop plans and set targets for energy conservation — making energy conservation a goal of the Ontario building code.

Infrastructure Asset Management

The Province is committed to smart, strategic, systematic stewardship of infrastructure — as is evident in its new focus on asset management and long-term planning. It is taking an integrated lifecycle approach to effective investments in infrastructure assets to provide satisfactory levels of service to the public in a sustainable and environmentally responsible manner.

Benefits of Infrastructure Asset Management

“Regular infrastructure maintenance enhances Canada’s productivity, growth and competitiveness, and decreases the costs of repair over the longer term.... better management techniques not only increase the lifespan of infrastructure, but also support the commercial value and export potential of Canadian innovation.”

Engineers Canada, Position Statement, November 2007.


Growth Planning

The Places to Grow Act, 2005 was passed by the legislature as the foundation for growth planning in Ontario. The act enables the development of growth plans for any area of the province.

Current plans established under the act include the Growth Plan for the Greater Golden Horseshoe and the Proposed Growth Plan for Northern Ontario.

A 25-year land use and infrastructure plan

The Growth Plan for the Greater Golden Horseshoe is a comprehensive 25-year land use and infrastructure plan that was released on June 16, 2006. It seeks to foster a robust regional economy based on strong, sustainable and complete communities that are a great place to live, work and play. To achieve this, the plan directs population and employment growth to existing built-up areas to make efficient use of infrastructure and limit urban sprawl.

The Proposed Growth Plan for Northern Ontario was released on October 23, 2009 for public comment. Consultations in the North concluded on December 3, 2009. Written submissions will be accepted until February 1, 2010. The proposed plan sets a 25-year vision that positions the North to compete and thrive in a changing global and green economy. More than 100 actions are recommended to achieve this vision.

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