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Canada Pushes $7.5B in Infrastructure Stimulus

Thursday, October 8, 2020

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Recently, Canadian Prime Minister Justin Trudeau announced that the Canada Infrastructure Bank would be launching a C$10 billion ($7.5 billion), three-year infrastructure plan to boost renewable energy initiatives, create jobs and recover from economic downturns experienced by the COVID-19 pandemic.

During the plan’s announcement, Trudeau was accompanied by Infrastructure Minister Catherine McKenna and Michael Sabia—the former chief executive officer of provincial pension fund Caisse de Depot et Placement du Quebec—who was named chairman of the CIB in April.

The Plan

According to Bloomberg, the CIB was created in 2017, with a federal funding budget of $35 billion for revenue-generating infrastructure projects that are in the public interest and attract private capital.

However, various reports criticize the CIB, claiming that the government has struggled to make good on the 12-year spending program. Currently, the CIB is working to name a new CEO for the bank in coming weeks.

Blue Planet Studio / Getty Images

Recently, Canadian Prime Minister Justin Trudeau announced that the Canada Infrastructure Bank would be launching a C$10 billion ($7.5 billion), three-year infrastructure plan to boost renewable energy initiatives, create jobs and recover from economic downturns experienced by the COVID-19 pandemic.

Through a new strategy, the Canadian government plans to commit $10 billion over three years through a new CIB Growth Plan, which is projected to create 60,000 jobs across the country.

“By investing in infrastructure, we are strengthening our communities and ensuring good jobs for today and in the future,” said Trudeau. “We will continue to do what it takes to support Canadians through this crisis, safely get our economy back up and running, and get people back to work.”

The Growth Plan plans to invest in five major initiatives:

  • $2.5 billion for clean power to support renewable generation and storage and to transmit clean electricity between provinces, territories, and regions, including to northern and Indigenous communities;
  • $2 billion to connect approximately 750,000 homes and small businesses to broadband in underserved communities, so Canadians can better participate in the digital economy;
  • $2 billion to invest in large-scale building retrofits to increase energy efficiency and help make communities more sustainable;
  • $1.5 billion for agriculture irrigation projects to help the agriculture sector enhance production, strengthen Canada’s food security, and expand export opportunities; and
  • $1.5 billion to accelerate the adoption of zero-emission buses and charging infrastructure so Canadians can have cleaner commutes.

Additionally, the plan will allocate $500 million for project development and early construction works in order to accelerate the delivery of CIB-invested projects.

The plan’s announcement is part of the government’s campaign to create over one million jobs to rebuild from the pandemic, and its more than $180 billion commitment to invest in new infrastructure across Canada.

While the plan has been praised by Trudeau, McKenna and Sabia, John Gamble, President and CEO of Canada's Association of Consulting Engineering Cos. noted to Engineering News-Record that the plan lacked larger construction investments in ports and transportation—key sectors in keeping long-term economic growth.

The Canadian Construction Association also noted on the plan, stating that it was a “promising step” but that it would need to seek more “urgency” in regard to the flow of funds and project management.

Sabia countered the criticism, stating that money would “move out quickly” and that the plan was “very real, very concrete.”

Other COVID-19 Infrastructure Plans, Progress

Back in June, United States House Democrats introduced a $1.5 trillion infrastructure bill calling for an increase in funding for road and bridge repairs, in addition to funding for clean drinking water.

Titled the Moving Forward Act, the infrastructure bill is aimed at providing:

  • $100 billion for broadband;
  • $100 billion for low-income schools;
  • $100 billion in funding for public housing;
  • $70 billion for clean energy projects;
  • $30 billion to upgrade hospitals;
  • $25 billion for drinking water; and
  • $25 billion for the postal service, among others.

Although the plan was ready to move forward for voting prior to the July 4 recess, Democrats hadn’t yet outlined how the bill would be paid for. House Speaker Nancy Pelosi (D-California) has pointed out though, that with the Federal Reserve approval to keep interest rates near zero, “there's never been a better time for us to go big.”

Forbes reported at the time that COVID-19 had caused unemployment claims to reach 1.5 million, lower than its peak of 6.9 million in March, but brings the total number to 45 million. While the legislation is hoped to be passed, as Trump has been pushing for an infrastructure bill, some suspect that it will hit obstacles moving forward with Republicans in Congress.

Last month, the Associated General Contractors of America released its state-by-state employment data analysis, which found that while jobs have still mostly declined year over year, 31 states have added jobs between July and August. The new annual figures detail how the COVID-19 pandemic has undermined demand for construction projects after a strong start to the year, according to the organization.

Additionally, the Associated Builders and Contractors published a construction backlog, showing a rebound to 8.0 months in August. While the backlog showed an increased by 0.2 from July’s reading, the report remained a half-month lower than the year prior. This data was according to the ABC’s Construction Backlog Indicator, from an ABC member survey conducted from Aug. 20-Sept. 1.

View all of PaintSquare Daily News' COVID-19 coverage, here.


Tagged categories: COVID-19; Economy; Energy efficiency; Government; Infrastructure; Infrastructure; Jobs; NA; North America; Program/Project Management; Project Management; Upcoming projects

Comment from Tom Schwerdt, (10/13/2020, 12:06 PM)

I wonder if Starlink or other LEO satellite networks can be used for that remote broadband infrastructure. Good for low population density areas - Starlink is in the lead, should have a public beta test within a few months.

Comment from Michael Halliwell, (10/14/2020, 11:23 AM)

I don't think so, Tom. From those I've talked to, even within an hour of a major urban center, most direct satellite internet services in Canada are pretty poor...poor to mediocre bandwidth (as in only slightly better than dial-up levels in many rural areas) and tiny data caps that cannot keep up with online schooling needs at present. Add in atmospheric interference and remote providers, and the actual usable days per month drop due to storms and power outages on the other side of the continent. Realistically, I suspect it will be an expansion of cable, fibre optic and cellular based broadband areas to include more smaller communities.

Comment from Tom Schwerdt, (10/15/2020, 7:47 AM)

Michael, I agree that current geosynchronous satellite internet service is terrible. The next generation of satellite internet is a quantum leap in capability improvement. I'll use Starlink as the example, as it is the most built out. Current geosynchronous satellites are more than 70x further than the first Starlink "shell" (550km vs 36,000km) and 100x further than the additional lower orbit planned shell (350km vs 36,000km) - Throughput, data caps and latency will be massively improved compared to current satellite service. Starlink has been approved by the FCC for a 12,000 satellite network, and to bid for the "low latency" tier of rural broadband buildout. Being much closer makes it easier to "punch through' weather interference. The buildout is going fast - a launch of 60 satellites went up October 6th, the next is scheduled for October 18th. I think they may reach 1,000 satellites by the end of the year.

Comment from Michael Halliwell, (10/15/2020, 11:32 AM)

Tony, I hope so....but I'd question will be whether carriers like Starlink will deploy their LOE satellites where they can provide coverage to rural / northern areas of Canada. Not a huge market (low ROI) and they'd need CRTC approvals, not just FCC.

Comment from Tom Schwerdt, (10/16/2020, 2:49 PM)

Michael - SpaceX has subsidiaries in different countries which have been working on permissions from the local equivalent of the FCC in each country, and Canada is second after the USA on the priority list. They incorporated as "TIBRO" locally (Orbit spelled backwards) in many countries. CRTC has approved a BITS license for TIBRO Canada, but they still need a spectrum license from ISED. Polar coverage is definitely on the list, due to US military interest. Originally it wasn't. Inclination of the current shell is 53 degrees, meaning coverage is best around 53 degrees latitude, so just Southern Canada. Once regulatory approvals are obtained they also need either ground stations deployed or wait til the next satellite update with inter-satellite laser comms. Apparently the test flight prototypes did well.

Comment from Tom Schwerdt, (10/16/2020, 2:51 PM)

Oh, and my friend from Iqaluit in Nunavut is super excited about all this :)

Comment from Michael Halliwell, (10/19/2020, 12:06 PM)

Again, Tom (and don't ask my how that last one auto-corrected to Tony?!?!) I hope it happens and that we have good service and wide area coverage, but I'm not holding my breath. I would suspect that the areas north of the 60th parallel (including Alaska) will get it...especially if the US military has an interest...but for areas between, say, Edmonton, Alberta (~54* N, Canada's most northerly city of 1M population) and Yellowknife or Whitehorse (~61*N) I suspect it'll be still be sparse. The joys of living in the world's 2nd largest country with 1/10th the population of the US and not a lot of that population being north of 50*.

Comment from Tom Schwerdt, (12/28/2020, 9:37 AM)

Michael - since these satellites are all in rapid motion - there will definitely be coverage for those areas. You can't exactly skip areas between two latitudes you cover. Low population areas are actually best for Starlink coverage - you aren't competing with lots of other people. They don't have the bandwidth to cover anywhere close to the potential demand of a medium to large city.

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