The Canadian Construction Association requested CANCEA to investigate the relationships between transport infrastructure investment levels and the ability of the country to grow exports. The findings were to be presented at the 2022 CCA Annual Conference in Vancouver.
Summary of findings:
Infrastructure Investments and Exports
- Jobs supported by foreign demand is a key driver of job growth in all regions across the country. Every additional $100M infrastructure invested supports: 15,000 jobs; $75M wages and salaries; $170M in export-related GDP activity. Since 2010, Infrastructure investment has not kept pace with goods exports and is now back to 1980’s levels.
- Export related infrastructure investment levels are still well below many other countries, and much more unpredictable. Current total annual investment in transport infrastructure (all road, rail, air, and water) in Canada is about $21B annually, or about 0.9% of GDP.
- To match Australia’s or UK’s percentage of GDP, investment levels would need to be $33 to $40B annually, about 0.17% of GDP; More than four times the expanded total of National Trade Corridors Fund over its entire duration.
- Further, any additional investments should be part of a strategic long term plan. Short term changes in investment levels (highly volatile) diminishes the value a country gets from its infrastructure investments
Infrastructure Investments: International Comparisons
- Infrastructure investments should be part of a strategic long term plan. Short term changes in investment levels (volatility) diminishes the value a country gets from its infrastructure investments.
- While Canadian infrastructure investments have been diminishing against export volumes, the volatility of investment in Canada is the highest amongst its peers:
- 360% more than the average of its peers, 200% more than Mexico, 700% more than the United States
- Indication of no long term investment plan, despite the importance of exports to Canada’s economy
- Volatility also makes investments of total equal value less productive
Further Export Challenges
- Over 30% of businesses report transportation infrastructure as an obstacle to exporting, and in some regions and sectors, over 50%
- Percentage is growing in agriculture, with all regions except Quebec are having increasing difficulty exporting
Download results: CCA Analysis – Transportation Corridors