Canada West Foundation Blog

By: Michael Holden

“The fiscal restraint that many expected from this budget is more akin to paper cuts than deep wounds.”

The 2012 federal budget was, for all intents and purposes, the first delivered by the Conservative government under majority rule. It was expected to give us our first glimpse at how the Conservatives intend to govern over the next several years. Many assumed that the result would be a fairly dramatic shift toward fiscal conservatism and smaller government. The reality, by contrast, is decidedly middle-of-the-road. The Conservatives have delivered a prudent budget, one that largely fails to live up to the hopes of strong fiscal conservatives, but also largely fails to live up to the fears of their opponents.

To be sure, specific elements of the budget, such as delaying Old Age Security (OAS) and Guaranteed Income Supplement (GIS) benefits until age 67, are bound to attract controversy and spark debate over the coming weeks and months. There are also deep cuts in some areas, among them foreign aid and the CBC. However, the budget also contains several initiatives that are either welcome or overdue (eliminating the penny leaps to mind). But in the final analysis, while the budget itself is a thick document, filled with a wide range of initiatives, this is, on the whole, a cautious and incremental plan. This is true especially considering initial expectations that the budget would pare back government spending in a big way.

In terms of the priorities outlined in the budget – once again called an “Economic Action Plan” – there is a clear emphasis on measures aimed at promoting economic growth and job creation. In particular there are several programs and initiatives that are recognizable as clear priorities for western Canada. These are discussed further below.

Budget Overview

As expected, the budget established an accelerated timeframe for eliminating the deficit and restoring fiscal balance, primarily focusing on the expenditure side of the equation. In last year’s budget, the deficit for the current year was expected to be $32.2 billion, a figure amended in November to $31 billion. Owing to a combination of resurgent revenue growth at the end of the year, spending restraint and lower-than-expected interest payments on the national debt, the deficit for this year is expected to be $24.9 billion. Moreover, the federal government now plans to balance the books in four years (2015-2016), one year ahead of the schedule laid out in last year’s fiscal plan. In fact, barring an unexpected downturn in economic fortunes, the budget will most likely be balanced within three years.

One of the big items that everyone was waiting for in this budget was news on the extent to which the government would be cutting program spending in the years ahead. This is the part of the budget where, depending on their point of view, people will be either the most disappointed or the most relieved.

Although many of the details still have to be ironed out, the federal government announced that its review of department spending will yield ongoing savings of $5.2 billion per year by 2016-2017. This total represents about 6.9% of the spending that was subject to the review process, but only 2% of overall federal spending. In addition, about 19,200 federal government jobs will be cut, about one third of which will be through attrition.

While these cuts represent real reductions for individual departments and agencies, it’s important to keep in mind that, in the aggregate, they are based on spending levels that have grown dramatically in recent years. Since the first Conservative minority government in 2006, federal spending has increased by 38.7%, while the federal public service expanded by 15.3% (adding more than 60,000 jobs in the process). When viewed in that context, the proposed budget cuts do not exactly suggest a broad-scale withdrawal of the federal government from the public arena.

In addition, other components of federal spending, like transfers to the provinces and to persons, will be rising throughout that period. Old age benefits are the obvious exception, but those changes don’t even begin to kick in until 2023. As a result, the overall effect of the government’s spending restraint will not be a decrease in total program expenditures as much as a slightly lower rate of growth over the forecast period.

Specific Programs and Initiatives

For the most part, the federal government’s fiscal plan delivers on the expectations set out in the Canada West Foundation’s pre-budget commentary. Perhaps most notably, it includes a commitment to modernize the regulatory system for major project reviews with the goal of a “one project, one review” approach. This approach is designed to reduce duplication, the administrative burden on businesses and the timelines for approval. While the specifics are still to be determined, this is a welcome development for western Canada, provided that it does not result in an abdication of government responsibility in the area of environmental stewardship.

The budget also contains measures aimed at job creation and addressing labour shortages in western Canada. These include some modest reforms to the Employment Insurance program, an enhanced youth employment strategy, hiring credits for small businesses and improvements to the Temporary Foreign Worker Program. The budget also mentions improvements to Canada’s immigration system, focusing on economic migrants that meet the labour needs of specific provinces and territories. However, there are few details on what that might mean.

Perhaps most significant for the West is new money for First Nations infrastructure, education and measures to improve training and incentives for the on-reserve Aboriginal population to enter the labour force. In its various consultations and roundtable discussions, the Canada West Foundation has heard repeatedly from western Canadian business and policy leaders that more needs to be done to improve living conditions on reserves as well as to improve Aboriginal participation in the workforce. In contrast with the aging population generally, the Aboriginal population is young and growing quickly. As such, they represent a significant, relatively untapped resource of labour in the West. On this issue, the measures contained in the 2012 budget represent a step in the right direction.

As we looked for in our pre-budget commentary, the 2012 budget also targeted spending cuts to specific areas and avoided cross-the-board measures that might have penalized effective or valuable programs. To be sure, there were few details, as usual, offered in the budget as to which exact programs would be affected by the plan, and as noted earlier, some will be unhappy about the areas that were targeted relatively heavily. But in general, the spending cuts reflected a gradual reshaping of government priorities and not a thoughtless chopping exercise.

The budget also emphasized measures related to innovation and research. This focus was signalled widely in advance of the budget, but the approach taken differed from the norm of recent years. Productivity improvements in Canada have been much sought-after, but elusive as previous government initiatives like lower corporate taxation and tax credits failed to deliver on that promise. With this budget, the government has signalled that it is changing tack. In a “Back to the Future” kind of way, there appears to be a return to more direct government involvement and incentives for high-risk venture capital and business innovation. While this type of direct involvement was (and still is) derided as the government getting into the game of “picking winners and losers,” the initiatives proposed in the budget echo many of the suggestions that we heard from business and policy leaders during our most recent series of Honourable James A. Richardson Roundtables this past autumn.

Another recurrent theme was a continued focus on trade and accessing new markets. In a sense, the budget offered nothing new on the subject; it mostly just restated the government’s recent accomplishments and highlighted the various trade- and investment-related initiatives currently underway. Although there was no new money for trade (in fact, foreign diplomacy and aid received disproportionately heavy cuts in funding), this budget signals that international trade remains a high priority for this government.

There were also some policy issues on which, in our view, the budget was disappointing or disappointingly silent. As noted above, in spite of the fact that trade and market access are stated priorities of this government, financial support for foreign affairs and diplomacy was cut. In addition, the budget includes no significant new measures or financial support relating to environmental protection, conservation, curbing greenhouse gas emissions or renewable energy. There was also disappointing silence on the subject of a Canadian energy strategy. Finally, there were no significant new funds for urban or trade-related infrastructure. While the federal government has made significant investments in this area in recent years, there remains a large infrastructure deficit in many parts of the West.

As a concluding note, it seems appropriate to devote a final thought to bidding adieu to the much-maligned penny which will cease to be minted in April, and stop being distributed later this year. Over the years we’ve all complained about the space pennies take up, we’ve gotten into trouble in school for flicking them at classmates, we’ve thrown them in fountains, used them for ill-advised science experiments and we’ve refused to pick them up when they lie alone and half-forgotten on the street. And now they will be no more.

Goodnight sweet penny. No longer will you fool me into thinking I’m rich based on the thickness of my wallet. May flights of angels sing thee to thy rest.

By: Casey Vander Ploeg, Senior Policy Analyst

Rural towns in the West are sleepy little affairs, and the small southern Alberta town in which I grew up is no different. There were, however, two occasions when the local hum-drum was broken, and believe it or not, both brouhahas involved infrastructure. The first was whether a new sportsplex arena should be built to replace the community rink that had burned to the ground in a spectacular cataclysm on Halloween in 1975. The second came about in the mid-1980s, and was all about whether the town’s gravel roads should be paved.

Most of the talk turned on whether the town could really afford the infrastructure. What was largely ignored was whether the town could afford to maintain those assets into the future.  That’s the bigger and more important question—especially when it comes to pavement.

Road infrastructure is quite unlike other forms of municipal infrastructure in at least three ways. First, roadways have a relatively short life-span—about 25 years depending on usage. Because time is so unforgiving, ongoing maintenance is critical. If it is postponed, the need for rehabilitation and replacement arrives much quicker and with a much heftier price tag. In A Capital Question (Canada West Foundation 2003) we noted that if preventative maintenance costs $1 per lane-kilometre, then renewal or rehabilitation is $80 and reconstruction or replacement is $250.

Second, a lot of the infrastructure owned and operated by municipalities is invisible. It’s buried under the ground.  Not roads, streets, bridges, and sidewalks. All of that is visible to the eye, and if you happen to look past it, the jarring sensation of that pothole is sure to inform your lower back.

Third, roads and related infrastructure comprise a huge chunk of the infrastructure liability. The capital budgets of the seven big western cities show that, on average, about 40% of all unfunded infrastructure over the next 10 years involves roadways.  The figure is about 25% in Vancouver, Edmonton, and Calgary, but rises to 50% in Winnipeg, and a whopping 70% in Regina.

Building and repairing roads involves big money. But, new technologies being developed and tested in western Canada are working to relieve some of that “sticker shock.” One such example is PSI Technologies, a Saskatchewan-based company dedicated to building better roads through innovation and technology. The company started-up in 1998 with the goal of bringing science to road construction, a process that PSI President and CEO, Curtis Berthelot says hasn’t changed much since the 1940s.

PSI employs what is known as “mechanistic” or “scientific design and assessment” for road beds and pavements, and uses tools like ground-penetrating radar and modern physics to help determine what needs to be done and where it needs to be done. The company has also developed new ways to recycle waste products such as broken pavement and crushed concrete, and use them as lower cost but highly effective aggregates in the road building process.

These technologies were recently tested in Saskatoon through an initiative called the “Green Streets” project, which was funded with help from Communities of Tomorrow and the City.  The goal of the pilot was to see whether various waste products could be processed into aggregate for road construction, if they could be handled and laid down with existing road-building equipment, and if they could meet the rigorous engineering specifications for new roadways.

In March 2010, Saskatoon City Council was handed a report on the project. It concluded that the technologies had been proven out. Significant savings were reported—savings that would allow the City to repair 30% more road surface at the same time that structural integrity was improved, less energy was used in construction, and less material ended up in the local landfill.  The report predicted that Saskatoon could become the first municipality in Canada to find all of its road aggregate in the form of recycled materials.

It’s always good news when a policy challenge can be overcome in ways that are environmentally and economically sustainable, and that also results in lower cost and less expenditure of tax dollars.  That type of good news also tends to spread quite quickly. The “Green Streets” project and the work of PSI is drawing a lot of attention from groups like the American Society of Civil Engineers (ASCE), in their study “City of Saskatoon’s Green Streets Program”, and the Transportation Association of Canada (TAC), in their reports “Sustainability Case Review of Using Recycled Aggregate in Road Structure” and “Crushing and Processing Reclaimed Concrete for City of Saskatoon Rehabilitation of Road Structures”.

As it rightly should.

By: Jim Burpee

Electricity is fundamental to maintaining prosperity and meeting the needs of Canadians.  From hospitals that Canadians depend on for health services, to home appliances, to personal electronics and communications—reliable electricity that is available on demand has never been more critical.

The renewal of Canada’s electricity infrastructure

There is currently no greater challenge to the electricity sector than investing in new and innovative infrastructure to renew our existing system, accommodate load growth, and meet the needs of our customers.  Electricity infrastructure must be reliable and capable of handling a diverse range of fuel supply and demand options, including wind generation and smart grid technologies.  The industry needs governments and communities to partner in and support these efforts to ensure a reliable and sustainable electricity system for generations.  This means timely approval of new projects, better investment conditions, and greater acceptance of electricity infrastructure by stakeholders and the general public.

The Canadian electricity sector understands that it must address our infrastructure challenge in a sustainable manner.  Sustainable development that encompasses environmental, societal, and economic impacts will be a cornerstone of the industry’s strategy for replacing existing electricity infrastructure and building new infrastructure.  The electricity sector in Canada is working to continuously improve its performance on sustainability, and is committed to minimizing any adverse environmental, social and economic impacts. This can be accomplished through investments in innovative technologies and ideas; working in partnership with employees, Aboriginal Peoples, stakeholders, and communities; and maintaining a reliable electricity system for Canadians.

Electricity and the economy

Electricity is a fundamental driver of the Canadian economy.

Electricity constitutes almost one-quarter of all the energy used by Canadians. In most applications, there is no viable substitute.  A reliable, cost-effective and sustainable electricity supply is vital for economic growth and to the future prosperity of our country.

For example, the August 2003 blackout in Southeastern Ontario and the North-eastern United States contributed to a 0.7 percent decline in Canada’s gross domestic product (GDP) during that month, along with a net loss of 18.9 million work hours.  This example illustrates the importance of electricity reliability, both to the economy and to the quality of life of every Canadian.

The current economic downturn, while potentially causing a reduction in power consumption in some provinces in the short-term compared to forecast needs, is not expected to substantially affect long-term requirements.  Despite the shift nationally from an industrial economy to a more service-oriented economy, economic and population growth continue to create new demand for electricity every day.  Although household appliances have become more energy efficient, the number of electrical devices per household continues to grow.  While business and industrial processes have gained efficiency, computing and Internet technologies have created new and growing forms of electricity demand, such as server farms and data centres.  Plans to electrify traditionally fossil-based technologies, particularly in the transportation sector, will result in further increases in electricity demand.

Current policy challenges and opportunities

The Canadian electricity industry will continue to push for greater conservation efforts and the development of a conservation culture as we move forward with modernizing Canada’s electricity infrastructure.  Regardless, Canada will still have to invest in new infrastructure to keep pace with growing demand and aging generation, transmission and distribution infrastructure.

While the industry works to modernize the grid, there is an opportunity for governments to establish a policy framework to encourage adoption of innovative technologies with the orderly turnover of existing generation assets.  However, the continuing uncertainty surrounding climate change mitigation policy represents significant risk to this modernization exercise.

In 2010, Canada submitted its 2020 emission reduction targets under the Copenhagen Accord, aiming for a 17 percent reduction in emissions compared to levels recorded in 2005.  Canada intends to contribute to the G8 goal of attaining global emission reductions by 50 percent in the year 2050.  In an effort to make progress towards such aspiring goals, the Canadian government is enacting a sector-by-sector approach aligned with the U.S.

On August 27, 2011 the proposed Reduction of Carbon Dioxide Emissions from Coal-Fired Generation of Electricity Regulations was published in the Canada Gazette Part I.  The proposed Regulations are, in essence, a coal-fired generation shutdown policy.  Unfortunately, there are unintended consequences of this regulation.  Namely, as a result of the lack of alignment with provincial requirements, there is a lack of flexibility for compliance, along with an unachievable performance standard. The federal government has provided the industry with few options for coal replacement.

Canada’s electricity sector is currently composed of over 80 percent non- CO₂ emitting electricity generation, while the remaining non-emitting sources contribute to approximately 2 percent of total global Greenhouse Gas (GHG) emissions and 16 percent of Canada’s overall GHG emission levels.  Today, coal remains a key component of Canada’s diverse energy supply, accounting for as much as 15 percent of electricity generation.

Further development and use of conventional and new clean forms of energy, as well as carbon capture and storage in certain regions, can play a significant role in maintaining diversity of generation and decreasing environmental impact.  It is essential that new transmission interconnections be built to transport electricity from remote generation facilities, particularly related to renewable energy. However, governments must create policy conditions that support these investments and partner with industry on new technological solutions.

Despite continuing national, regional, and international policy uncertainty on climate change, the electricity sector is pursuing significant investments in new generation options—including large hydro, clean coal, and renewables—to reduce its overall carbon footprint.  Some of the new hydro clean-energy projects include the proposed 900-megawatt Peace River Site C facility in British Columbia, the 200-megawatt Wuskwatim facility in Manitoba, and the 3,074-megawatt Lower Churchill (Gull Island and Muskrat Falls) generation project in Labrador (we should include the Ontario Lower Mattagami project as well).  The industry is also pursuing Carbon Capture and Storage (CCS) technologies, particularly in Western Canada.  These projects include the Boundary Dam CCS demonstration project in Saskatchewan, and Keephills 3 CCS project in Alberta.  The industry is also investing in wind generation, which currently accounts for 5,265 MW of installed capacity.  These investments, along with various government programs, will have a tremendous impact on the overall electricity supply options and GHG emissions.

The Canadian electricity industry faces numerous challenges and opportunities; however, we are determined to meet them with the support of stakeholders, including governments at all levels.  It is imperative that governments, including the federal government, create the right policy conditions to support innovation and change.

We look forward to working with all stakeholders to ensure Canadians continue to receive reliable, sustainable and cost-effective power in the years ahead.

Jim Burpee

Jim Burpee was appointed President and Chief Executive Officer of the Canadian Electricity Association (CEA) in February 2012. As President of CEA, Mr. Burpee acts as spokesperson on issues of national concern to the electric utility industry.

Mr. Burpee has a long history with the electricity industry both in Canada and globally. He worked for Ontario Hydro and its successor company, Ontario Power Generation (OPG) for over 31 years. He worked in a senior executive capacity for over half that time in a number of roles, including having responsibility for all of OPG’s non-nuclear generation fleet, Energy Markets, and Corporate Development. He also has three years of senior executive experience in Ontario Hydro/OPG’s nuclear generation business at both Bruce and Pickering Generating Stations. His prior industry experience also includes having served on the Board of the Canadian Electricity Association as a Director from 1993 to 2008, including one year as Chairman.

Most recently, Jim served as Chief Executive Officer at Bridge Renewable Energy Technologies Inc., a company which marketed Biomass Gasification Electricity Systems primarily in the developing world.

Jim graduated from the University of Toronto with a BASc in Mechanical Engineering. He is a member of Professional Engineers Ontario and the Institute for Corporate Directors.

By: Larissa Sommerfeld

Pipelines, robocalls and economic angst seem to be dominating headlines these days. Yet, there’s an important topic that’s missing from the limelight—water.

Everyone knows that water is essential to our survival and our way of life. What would our national sport be without the ice? But how often do we make the connection between healthy ecosystems and a strong economy?

Not often enough. As economic development in western Canada continues to ramp up, it’s critical that we’re as mindful (if not more) of our water and the broader environment as we are our economic prospects.

Across western Canada, water is integral to a wide range of economic activity including fisheries, shale gas development, irrigated agriculture, oil sands development, and potash and uranium mining.

Yet, there’s a sleeping water policy giant that will be waking up in due course. Climate change, extreme weather, increasing demand for energy, food, commodities, decreasing water quality (often due to effluent discharge and agricultural run-off), depleted sources, mindless water consumption, aging infrastructure, and the drainage of wetlands are all placing immense pressure on our water supplies. If we don’t start mitigating these strains, we’ll have some real trouble on our hands.

If western Canada is going to continue to be a great place to live, we need to constantly be thinking one step ahead. Our economic activity in the natural resource sectors (energy, potash, uranium, agriculture and aquaculture) is projected to grow in the coming decades. This is great news for our economy, but only if we become even better stewards of our water. The time is now for water to take priority on the policy agenda, up alongside energy, health and education policy—before we get to a breaking point.

Water allocation (of which addressing Aboriginal water rights will be key) will be one of the most challenging policy issues in the years ahead and there’s no beating around the bush—it will have to be addressed because water is a necessary component of the western Canadian economy. Canadian author Marq de Villiers once said that “the trouble with water is that they aren’t making any more of it.” We’ve got to protect what we have, not only to keep our ecosystems healthy, but to sustain our economy as well. We have a finite supply of water so it makes sense to find ways to maximize how it’s used so it can meet the increased demand with the same amount of water. This is something we should all care about because our livelihoods depend on it.

Read more about water and economic development in our new report, Stress Points: An Overview of Water and Economic Growth in Canada.

By: Michael Holden, Senior Economist

On March 29^th, the Conservative government will bring forward what effectively amounts to its first budget since it won a majority in the House of Commons last spring. There are several reasons to expect this particular budget to be significant. For one, it will be the first delivered by the Conservatives free from the constraints of a minority Parliament. In addition, the budget is expected to include more specific details on how (and over what time period) the government plans to eliminate the deficit.

Finally, since the current government is early into its mandate, the budget provides an opportunity for it to set its agenda over the next several years and put its stamp on the future direction of the country. Governments in the past have frequently adopted more controversial policies early in their mandates so that voters have as long as possible to forgive and forget before the next election.

In a general sense, the expectations surrounding this budget are pretty clear. The government will take steps toward eliminating the deficit focusing heavily (or exclusively) on the expenditure side of the equation. No new taxes are expected, nor is there expected to be any rollback of previously-announced corporate tax cuts that kicked in this past January. There have also been broad hints about changes to Old Age Security (OAS) eligibility and a renewed focus on international trade and fostering innovation.

What is not known is the nature or the severity of the program spending cuts. We do know that since it was first elected in 2006, the current government has not exactly been “conservative.” Due in large part to its economic stimulus package in 2009, federal program spending has increased by 36.7% since the 2005-2006 fiscal year and the federal civil service has expanded by about 15.3%. Not including federal Crown corporations, there are more federal government employees today than even before the Jean Chretien Liberal government took the reins in the early 1990s.

With that in mind, there are a few things that the Canada West Foundation is anticipating in the budget.

Better-than-Expected Results in 2011-2012

In its last budget, the federal government projected a deficit of $32.3 billion for the 2011-2012 fiscal year. That figure was later amended to $31.0 billion in the government’s annual November fiscal update, as lower-than-expected program spending was more than enough to offset sluggish revenue growth and the addition of a $1.5-billion risk adjustment buffer to guard against the effects of global economic uncertainty on the bottom line.

Barring a major year-end spending spree in March, however, the actual deficit for the current fiscal year will almost certainly be much lower. The deficit was projected to decrease only slightly compared to last year (from $33.4 billion to $31.0 billion) but the government is well ahead of pace. Through the first three quarters of the year (April to December 2011), the federal deficit stands at $17.7 billion, a considerable improvement over the $27.4 billion deficit over the same period last year.

There are two directions the federal government could go with this increased fiscal flexibility. It could accelerate its deficit-elimination schedule and balance its books a year or two earlier than currently planned (in 2016-2017). Alternatively, it could use that flexibility to lessen the severity of anticipated cuts to program spending. Some combination of the two is also possible.

Prudent Economic Forecasts

On a related note, we look for the government to continue making its budget projections based on cautious economic and revenue growth assumptions.

During Jean Chretien’s tenure as Prime Minister, Finance Minister Paul Martin attracted some criticism because his economic- and revenue-growth forecasts were so conservative that the Liberal government regularly posted much better year-end budget balance figures than were initially projected in their budgets. For a few years this was a bit of a novelty as governments historically had tended to over-promise and under-deliver in their deficit-fighting efforts. By the end of the Chretien-Martin era, however, pundits were clamouring for more accurate budget forecasts, because year-end numbers were consistently so much better than budget forecasts.

Returning to this era of under-promising and over-delivering would not be such a bad thing. While worries over sovereign debt crises in Europe and the sluggish US economy have eased somewhat over the past six months, there remains a great deal of global economic uncertainty on the horizon. In this context, small-c conservative growth forecasts would be prudent. 

In addition, understated growth forecasts would allow the current government to capture one of the big advantages enjoyed by the Chretien/Martin approach to budgeting. By regularly underestimating revenue growth, the Liberal government of the time was able to avoid the pressure to increase spending that comes when governments announce that their fiscal situation is actually pretty good. The moment a government announces that it has billions of dollars left over after fulfilling its spending commitments, you can guarantee that there will be a clamour of voices with all sorts of ideas about how that money should be spent. This is not to say that many of those ideas are not worth supporting. Rather, it is extraordinarily difficult for a government to announce that it has excess revenues without at the same time creating enormous political pressure to spend those revenues or to decrease taxes accordingly. This can result in decisions being made on the fly rather than being carefully considered as part of a long-term plan.

Simplification of the Tax System

The Canada West Foundation has long argued in favour of a simpler tax system. The recent trend, at the federal level at least, has been for the addition of boutique tax credits aimed at specific segments of the electorate: tax credits allowing tradespeople to write off their expenses on tools; credits for arts and sports programs for children; employment tax credits and so on. Every year it seems that the forms get longer and more complex. We don’t suggest going to the simplified tax scheme proposed here, but an increase in transparency would be welcome.

A caveat to this statement is that we have no position on whether taxes should be higher or lower. Too often people get swept up in ideological debates which focus entirely on the tax side and ignore the expenditure side completely. It is important to remember that taxes are the means by which governments provide services to their citizens. All else being equal, we get what we pay for: lower taxes means fewer or less comprehensive government services and higher taxes mean the opposite. Now there are all sorts of arguments one could make about how efficiently governments use their revenues and about how much easier it is for government to grow than to contract. But in our view, the appropriate level of taxation is the lowest one possible which provides Canadians with the goods and services they want, while also allowing governments the policy flexibility to pursue appropriate social and economic objectives for the long-term prosperity of the country and also ensuring that Canada is an attractive place in which to do business. In other words, we need the taxes to afford what we want and need, not to blindly raise or lower those taxes without a specific, and compelling, reason for doing so.

Government Program Spending

The federal government has already stated that it will not touch transfers to the provinces as part of its move toward balancing the budget. The size (and growth rate) of federal transfers for health and social services has already been determined for the next decade or more. Similarly, the pool of funds for the equalization program is set to increase each year, tied to the growth of the national economy.  While we have some concerns about the specifics of these programs and some of the interprovincial equity issues that could result from the distribution of those funds, those concerns are not part of the budget discussion itself.

In terms of direct program spending, however, the federal government has already signalled that it intends to find billions of dollars in “savings” under its “deficit reduction action plan savings target.” What this means, exactly, is anyone’s guess at this point, but the specifics of this plan should be included in the forthcoming budget. What is clear, however, is that after years of rapid spending growth and a hiring spree that has seen the creation of more than 60,000 new federal government positions (including in the military) since 2004, there are cuts on the way.

Given the huge increase in federal government spending in recent years, there is certainly some room for modest fiscal retrenchment. There are, however, a few things we would not like to see. First of all, the budget should not take the easy way out and impose across-the-board cuts on departments. Doing so carries the risk of penalizing effective programs by providing them with fewer resources to accomplish their objectives, while allowing less effective or redundant programs to continue on. A more difficult, but ultimately more valuable, exercise would be to use program spending cuts as an opportunity to revisit past government programs and to refocus efforts on initiatives that are demonstrably effective at enhancing economic and social welfare in Canada. Second, the budget needs to walk a fine line between returning to fiscal balance on the one hand, and not undercutting the still-fragile economic recovery on the other. The Canadian economy grew at a relatively modest 2.0% in 2011. A dramatic cut in federal spending could further weaken the economic outlook for the current year.

A better approach would be for the government to back-end-load its spending cut commitments. This means that the government should set out a deficit-reduction plan that sees relatively modest cuts to program spending this year (and possibly next), allowing the economy time to find its footing. When conditions are more robust, the Canadian economy will be in a better position to absorb the impact of more severe cuts to federal spending.  

Environmental Review Process

It has been suggested in the lead up to the budget that the federal government is looking to streamline the environmental assessment process for resource development. While this move is guaranteed to spark outrage in some circles, we are cautiously optimistic. The Canada West Foundation supports the idea of a streamlined review process: one that eases the administrative burden on businesses and reduces the time it takes to get shovels in the ground on approved projects, subject to the condition that the standards to which businesses are held are not compromised as a result.

Many people believe that expediting the review process, or handing the responsibility to the provinces, will result in less due diligence or a patchwork of environmental standards across the country. Some will undoubtedly suggest that a shorter process is, in fact, a backdoor attempt to lower standards, skirt environmental regulations and run roughshod over due diligence.

Without detailed information on the specifics of the federal government proposal, we cannot comment on those anticipated criticisms. We look to the budget to provide some of that information. To be sure, laxer environmental standards are a risk if the spirit of the matter is violated, but we do not accept the view that fixing the review process will necessarily result in lower standards or that it represents an abdication of environmental stewardship on the part of Canadian governments. A longer review process does not make a better review process.

Michael Holden will be in Ottawa on budget day and will prepare a post-budget analysis. Media inquiries can be directed to Rachael Strathern, Communications Team Lead, at communication@cwf.ca or (403) 700-9535.  

By: Larissa Sommerfeld

This coming Saturday will mark the completion of a long and drawn out race for the leadership of Canada’s New Democratic Party.

Does water policy fit into the platforms of its leadership candidates?

It doesn’t seem top of mind for Thomas Mulcair or Brian Topp. Both candidates appear to have mentioned water policy only in the context of larger environmental policy, and don’t have any detailed positions posted on their websites. So called “wild card” Nathan Cullen deems himself a “radical” for standing up for the environment, so it’s probably safe to assume that water would be central to his policy agenda. And Peggy Nash and Paul Dewar have been more passionate about the subject and believe that a national water strategy is needed.

The development of a national water strategy isn’t a partisan issue in the policy community. In fact, groups from all sides of the spectrum (from the Canadian Water Resources Association and Pollution Probe to the Canadian Chamber of Commerce) have been calling for the development of a national strategy to ensure Canada is in the best position possible to stand ground against water challenges due to climate change and rising demand stemming from increased economic activity (e.g., the running of LNG terminals on the West Coast would require massive amounts of energy which would come from hydroelectricity). However, a national strategy wasn’t mentioned in the 2011 NDP election platform, nor does it seem to be getting much attention now.

The water debate is more focused on bulk water exports. In January 2012, Paul Dewar stated he would ban bulk water exports, which is in-line with the official NDP position. Dewar has spoken out about Thomas Mulcair, a former Liberal and Minister of Environment in Quebec, stating “I hope that the position he had before with the Liberal government, which was in the past, is in the past, and that his position will be the party position….” The position Dewar is referring to was Mulcair’s desire to open up a debate on bulk-water exports from Quebec to the US. His position was highlighted in a clip posted by the Liberal Party of Canada.

This will certainly be something to watch. The favoured candidates are Mulcair and Topp, both of whom don’t seem to have water on the brain. If either of them are elected, water as an issue might fall out of the NDP periphery and the push for a national water strategy—which most water policy experts agree is something that’s needed—may rest solely with the Liberals (who are very active on the water file) and the Green Party’s Elizabeth May.

By: Michael Atkinson, President, Canadian Construction Association (CCA)

There is little doubt about the need for safe, reliable, and efficient core infrastructure, both for the safety of Canadians and the competitiveness of the Canadian economy.

The Canadian Construction Association, which represents the non-residential construction industry, has worked diligently to ensure that infrastructure remains a key policy consideration for the federal government.  We believe it is critical to continue building partnerships with government leaders, industry, and other stakeholders to promote the importance of infrastructure investment—both now and in the future.

Over the past three years, all orders of government have invested considerable funds into infrastructure improvements, launching a worthy and long overdue national effort to modernize Canada’s infrastructure systems.  However, much more is still required in order to complete the modernization process, ensure these assets meet 21^st century standards, and that they will adequately serve the needs of Canadians for years to come.

The Canadian Construction Association has long championed the cause that adequate infrastructure funding is economically critical to maintaining Canada’s competitive advantage.  With projected strong growth in the resource and energy sectors, it will be imperative that Canada possesses an adequate and efficient system of infrastructure to support economic growth and investment, and help Canadian businesses remain globally competitive.

For the Canadian construction industry, this will require infrastructure investment that is built on a long-term and sustainable model that addresses key characteristics.

One of the most important and fundamental characteristics is that investments address the long-term needs of the Canadian economy and the Canadian population. As opposed to making reactionary investments in Canada’s infrastructure system, we should be following a sustainable plan based on the current and future needs of the country.

It is also imperative that any infrastructure program be clear in its purpose.  This means identifying key goals to ensure both progress and accountability.  Any infrastructure investment must be for a defined and distinct reason.  Coupled with meeting the long-term requirements of the Canadian economy, this goal-setting will help keep any future planning on track and on target.

At the same time, any sustainable infrastructure investment will have to involve the private sector if we are to meaningfully address funding needs.  With the inability of governments to finance and maintain infrastructure at the pace of its decline, it is becoming increasingly important to involve private-sector partners with new and innovative funding models.

This requires a “de-politicization” of infrastructure investment programs.  Oftentimes, infrastructure investment is reactionary and short-term.  Sustainable investment in Canadian infrastructure will have to come from a long-term program that is immune to changes in political priorities or to the governing party.  It should not be viewed as a program linked to a particular group, but rather, as a program fundamental to the economic and social well-being of the country.

Further to this, a long-term and sustainable infrastructure investment program should not be adversely affected by economic cycles, inflation or public sector fiscal concerns.  This may mean shifting funding away from traditional property or excise taxes toward user fees and income or sales taxes.   Regardless of the ultimate funding mechanism, a sustainable infrastructure program must be built—and built to last.

As well, the program must be self-perpetuating, and not dependent on renewed grants, authorizations, or successive commitments and contributions.  That said, future infrastructure plans, and particularly the funding options, will need to remain flexible.  Given the size of the Canadian landscape, and the varying needs of the different regions across Canada, it is very important that any plan and priorities fit the unique regional needs of the country, rather than a one-size-fits-all approach.

We understand the importance of infrastructure investment both for the economy and Canadian society.  Should the infrastructure deficit continue to grow, it will become increasingly clear that new ideas and policies will be required to help overcome this important issue.   But with a clear and long-term infrastructure plan, a more sustainable solution can be developed for Canada’s future.

Michael Atkinson

Michael Atkinson has been President of the Canadian Construction Association (CCA) since March of 1993.  He joined CCA in 1981 as a Staff Officer responsible for standard industry practices and documents. In November 1982, he was appointed Secretary to the Canadian Construction Documents Committee, a position he held until 1993.

Michael has emerged as a leading specialist in the area of standard construction practices in Canada and is highly regarded for his knowledge of the Canadian construction industry.  His more than thirty years of experience with the Association has included every aspect of senior government relations, procurement and industry promotion regarding construction in Canada.

Born in Toronto and raised in Ottawa, Michael attended the University of Ottawa where he obtained a Bachelor of Arts Degree (Pre-Medical) in 1975 and a Bachelor of Laws Degree in 1979.  He was called to the Ontario Bar and admitted to the Rolls of the Supreme Court of Ontario in 1981.

He is a member of the Federal-Industry Real Property Advisory Council, the Editorial Advisory Board of the Daily Commercial News, the Industrial Security Advisory Board, the Construction Law Section of the Canadian Bar Association, and the Law Society of Upper Canada. He is a former member of the Editorial Advisory Board of the Construction Law Letter, the CORCAN Advisory Board, and the Board of Directors of the Canadian Council for Public-Private Partnerships.

By: Dr. Roger Gibbins

At a late February meeting in Halifax, the Winnipeg Consensus Group (WCG) pulled together over 60 participants from think tanks, ENGOs, industry and government to discuss how to maintain momentum for a Canadian energy strategy. Many of the participants had been present at previous WCG meetings in Winnipeg (2011) and Banff (2010), and thus the Halifax gathering provided an opportunity to assess progress to date, and additional progress that might come out of the Forum of the Federation and Ministerial meetings slated for Halifax and Charlottetown, respectively, this August and September.

The Halifax participants agreed that a good deal of progress had been made over the past three years, that the notion of a Canadian energy strategy had moved from the distant margins of national conversation to the very centre. However, they also agreed that more work has to be done in order to maintain momentum in the face of reluctant government buy-in, particularly on the part of the federal government. To this end, more has to be done to broaden the geographical reach of the conversation, and to expand the range of participants to include municipalities, First Nations and a wider array of energy industries.

Here, the Halifax group recognized the need to proceed along two fronts, the first of which is an intergovernmental strategy focused on the upcoming meetings of premiers and energy ministers. At the same time, there was support for a non-governmental strategy that would, in effect, hold the feet of governments to the fire and prevent the development of a Canadian energy strategy becoming lost in the swamp of intergovernmental relations. How the second strategy might be financed, and how the two strategies might be integrated, were largely unanswered as the meeting closed.

Conference participants also had the chance to review informally the detailed policy work that has been done by the Energy Policy Institute of Canada (EPIC) and the carbon pricing subcommittee initially organized through the WCG. Appreciation of EPIC’s work was combined with the awareness that EPIC plans to disband by the end of the summer, creating some uncertainty as to how the EPIC hole might be filled, or indeed if there will be a hole to fill. Work by the carbon pricing group reinforced the conclusion reached at the Banff and Winnipeg meeting that carbon pricing must be a component of a Canadian energy strategy, that it is an indispensable part of the connective tissue between the energy and climate policy files.

Finally, there was some discussion at the Halifax meeting about whether a Canadian energy strategy is best conceived as an end in itself, or as a means to other ends that, to this point, have not been clearly articulated. There was some concern that the storyline for Canadians needed further development, and that Canadians were being approached too much as consumers and too little as citizens.

In summary, the Halifax meeting demonstrated that interest in a Canadian energy strategy is alive and well, and that the country has become increasingly engaged in the energy conversation if not fully convinced about the need for a Canadian energy strategy. In short, a lot has been accomplished, but now is not the time to lay down our arms and declare victory.

One Comment

One of the needs that can be addressed in pursuit of a national energy strategy has to be the development of a time scale for thinking and decision-making that is appropriate to exploiting finite, and ultimately irreplaceable, hydrocarbons and to the scale of transition to a clean energy system.

It has been horrifying to see the economic adjustment panic and the latest lemming-charge to natural gas completely derail some of the emerging integration of clean electricity/climate action/future economy discussions.

In a recent discussion with a colleague we speculated that it may actually be the two-path energy strategy that China seems to be pursuing that may emerge as a world leading example!

Canada has some opportunities to be a world leader in the future energy economy, but I am deathly afraid that we will wait and buy it all from China!

The polarization around the tarsands and Enbridge pipelines etc provides an easy signal that a strategy could have more political flak attached than kudos. How do we turn the wasteful campaigns into a more common long-term vision? Can we have some national event without being hijacked by interests, fundraising or political positions. This is “so Canadian”. We are wasting an extraordinary opportunity. As the NRTEE and senate committee have said, it is unbelievable that Canada would allow its development of an energy strategy to be defined by its biggest customer.

By: Casey Vander Ploeg, Senior Policy Analyst

Solutions to policy problems seldom enjoy unanimous, much less unqualified, support. The “Penny Tax” is no exception. In this final segment, I respond to the critics.

Criticism: The infrastructure deficit is fictitious.  It compares what “is” spent (observable) with what “ought” to be spent (unobservable). Many infrastructure “needs” are really “wants,” “whims,” or “dreams.” The Canada West Foundation has not defined infrastructure and has no sound analysis to show a deficit. (See National Post, December 6, 2011 and Business in Calgary, November 2011). 

Response: In A Capital Question (2003), New Tools for New Times (2006), and The Penny Tax (2011), Canada West defined infrastructure, developed a detailed taxonomy of municipal infrastructure, and placed various estimates of the infrastructure deficit in context using objective data. We also noted huge strides being made in measuring infrastructure needs based on advances in public asset management. For example, the City of Edmonton has developed a rigorous methodology to inventory all of its assets, measure their age and condition, and then determine when, where, and how much investment is needed. The “ought” is being objectively measured. There is also anecdotal evidence—from bridges cracking apart in Saskatchewan to the numerous road collapses in Quebec. While denying the problem dispenses with the need for a solution, it flies in the face of the evidence and a consensus that infrastructure is an issue right around the globe.

Criticism: The claim that property taxes are an inadequate source of revenue for municipal infrastructure and that municipalities need more federal and provincial funding is becoming a tiresome refrain.  Property taxes are appropriate for municipalities and are less harmful than other taxes. Federal and provincial grants are undesirable because they muddle accountability. Municipalities should employ more user fees and better pricing, and as a second-best alternative, user pay taxes like those on fuel, amusement and hotels. (See National Post, December 6, 2011 and Winnipeg Free Press, February 17, 2012). 

Response:  Every tax has both advantages and disadvantages.  A diverse tax regime allows the weaknesses of one tax to be offset by the strengths of other taxes.  But in Canada, the property tax is the only substantial tax open to municipalities. Because property taxes seldom keep pace with economic and population growth and the tax cannot generate revenue from visitors who use city services and infrastructure, grants are necessary. Around the world, local governments that rely heavily on property taxes also rely heavily on grants.  If our cities are to be restricted to the property tax, then grants must follow. If grants are to be ended, then the local tax regime needs to be diversified. And, such diversification must go beyond user pay taxes with a narrow tax base and limited revenue-generating capacity. I’m very much in favour of pricing and user fees, but not all infrastructure can be funded through user pay.

Criticism: A local penny tax is a “bad” idea and “difficult” to implement.  There is “no way” the federal government wants to collect different GST rates in each city. (SeeGlobal Edmonton, September 28, 2011). 

Response: This is not an argument.  Rather, it is assertion and speculation. The federal government is not on record in this matter. What’s more, we live in a digital age with massive computing power. This should eliminate a lot of the difficulty in managing a diverse local tax regime. In the US, localities have many different taxes and differing rates of tax. This has not proven unmanageable. Such “difficulties” used to be trotted out against road tolling. Technology (e.g., electronic toll collection, global positioning systems, in-car transponders) has addressed these concerns.

Criticism: Shoppers will drive out to “low-GST” or “no-tax” towns to shop. (See Global Edmonton, September 28, 2011).

Response:  This too is mere speculation. First, there are ways to address such concerns, such as applying the tax across the broader city-region. Second, the problem may be overstated. With a small 1% tax, a shopper making a $1,000 purchase faces a local tax differential of $10.  Will a shopper really spend two hours on the road and burn $15 on fuel to save $10?

Criticism: The proposal will result in too many plebiscites and this will be too costly. (See Calgary Sun, October 2, 2011 and Business in Calgary, November 2011).

Response:  The Penny Tax proposal does not call for separate votes on each and every infrastructure project, but one referendum every six years on a basket of projects. Since referendums will be held alongside local elections, costs will be kept to a minimum. Democracy does cost money. The last federal election cost almost $300 million. Should we therefore dispense with elections? Of course not.

Criticism: There are not enough safeguards to keep the tax at 1%.  We could see “tax creep.” (See Calgary Sun, October 2, 2011 and Business in Calgary, November 2011).

Response:  The penny tax has the strongest taxpayer protection you can find. Not only would provincial enabling legislation cap the rate at 1% but the taxpayers are always in control because the tax is voter-approved. I trust voters.  One of the strongest safeguards with the Penny Tax is that if it generates more revenue than expected, the excess would be rebated to taxpayers through lower property taxes. This is a very transparent and accountable tax proposal.

Criticism: Calling the proposal a “penny tax” is powerful, dangerous, and slick marketing. It’s a “cheap tax grab” and a “very strange proposal.”  It’s being proposed by a “left-leaning” group and is supported by people “associated with professional sports franchises.” (See Calgary Sun, October 2, 2011 and Business in Calgary, November 2011).

Response:  The “penny tax” is a colloquial expression used in the US for local option sales taxes.  As such, the term is accurate. What is not accurate are many of the slogans that critics have thrown out.  A “strange” proposal?  It’s not strange for dozens of US counties and municipalities. A “cheap tax grab?” The tax cannot be “grabbed” by government.  Rather, it must be “granted” by the voters.

Criticism: Critics rail against certain “unpopular” projects—artwork on overpasses, the new $400 million road link to the Calgary airport, the Peace Bridge, Calgary’s Saddledome. If these “unnecessary” projects were left on the drawing board, there would be more money for “essential” infrastructure. (See National Post, December 6, 2011 and Calgary Sun, October 2, 2011). 

Response:  This comment misses one of the greatest features of the penny tax—the fact that both the tax and the projects have to be voter-approved. Projects that cannot earn broad voter support will not go ahead. The process we suggest works to solve the very complaint being made. At referendum time, if you don’t like the projects, then don’t vote for the tax.

To date, critics have failed to interact with the substance and essence of the penny tax proposal. Canada West Foundation Senior Economist Mike Holden is bang-on with his recent op-ed entitled “How Biases are Ruining our Public Policy Debates.” Holden argues that:

Increasingly, those who involve themselves in important public policy debates seem to be eschewing critical thought, persuasive argument, and evidence-based decision-making in advancing their positions.  Instead, they resort to fear, ideology, intentional misrepresentation, and pejorative language to mobilize a pre-existing support base against its perceived opponents. The result is that important discussions about how we move forward as a society consist not of people with different views trying to work together to find common ground, but of opponents retreating to entrenched positions, surrounding themselves with like-minded individuals, and refusing to consider alternate points of view. This trend is threatening our ability to form sound, broadly-supported public policy in Canada.”

To date, criticisms leveled against the penny tax idea have been exactly that. One critic asserts that Calgary doesn’t have a “revenue” problem, it has a “spending” problem. (See Calgary Sun, October 2, 2011 and Business in Calgary, November 2011).  Is this really true?

Well, here’s the real story. In 1990, the City of Calgary’s operating expenditure was 3.9% of Calgary’s per capita share of provincial GDP. In 2010, operating expenditure was 3.1% of GDP.  The City of Calgary’s total operating and capital expenditure in 1990 was 4.9%.  Today it is 4.8%.  Is this really a “spending” problem?

So, I too hear a tiresome refrain—the continual reactionary positioning of the anti-tax crowd who want to kill new ideas the moment they arrive, who constantly whine that taxes are too high and growing out of control (not true) and that paying taxes is tantamount to theft (also not true). In a modern industrialized economy, taxes are necessary to fund important public services and infrastructure that are essential to making private investment profitable and productive. And, with that, we are right back to my first point discussed in Part 1.

You may also be interested in parts I, II, and III of the “1¢ Solution to a Billion Dollar Problem” series.

By: Casey Vander Ploeg, Senior Policy Analyst

As a former colony and dominion of the British empire, Canada has inherited a number of practices and traditions that developed and evolved in Great Britain.  Canada’s parliament—based on the Westminster system—is but one example.  A less well-known but not unimportant “hang-over” from Canada’s colonial days is the heavy reliance of our local governments on the property tax as a source of funding.

While the idea of a broad-based and locally-levied sales tax like a penny tax may be somewhat foreign in the Canadian context, the same does not hold for local governments in most other nations.  Local governments in western and eastern European countries, the US, and southeast Asia employ a wide variety of taxes—everything from income taxes, payroll taxes, general sales taxes, and selective sales taxes on specific goods and services.

The International Experience

According to the Organisation for Economic Co-operation and Development (OECD), local governments in the Scandinavian trio of Sweden, Norway, and Finland obtain virtually all of their tax revenue from personal income tax, which also comprises about 70% of local tax revenue in Switzerland.  In Luxembourg, local governments get almost all of their tax revenue from corporate income tax.  Payroll taxes represent over 60% of local taxes in Austria.

Local governments in Hungary get almost 70% of their tax revenue from a broad-based general sales tax, which also generates between 5% to 10% of local tax revenue in the US, Japan, and Italy.  Local governments in most nations also collect at least some selective sales tax revenue, including Canada.  Local governments in Canada get 2% of their tax revenue from selective sales taxes, which are levied primarily on utilities such as electricity and natural gas.  However, these taxes are used much more heavily in other countries such as France, Korea, and Italy.

To be sure, local governments in all OECD nations collect property tax.  But dependence on this tax source varies widely, from a mere 1% of local tax revenue in Switzerland to 90% in New Zealand, 96% in Canada, and 100% in Australia, Ireland, and the UK.  The tax profile of local governments in the Commonwealth of Nations—formerly the British Commonwealth— stands in stark contrast to local governments elsewhere.

Germany—which too is a federal state—is one of the most interesting examples of tax diversity at the local level.  About 50% of all local tax revenue in Germany comes from personal income tax, 25% from corporate income tax, 15% from property tax, 5% from a general sales tax, and 2% from selective sales taxes.

My point here is not that Canada’s local governments be given access to each and every tax source they desire, nor should government necessarily increase taxes.  My point is that there is no fundamental law of the universe that dictates our local governments be so singularly dependent on just one tax source.  Other options are available.  And, allowing voters in a city to decide themselves whether they want to pay a small sales tax to improve local infrastructure is not a crazy idea.

The US Experience

Local governments in 36 US states—counties, municipalities, school districts, and special districts that deliver services across municipal or county lines—are allowed and often do levy some form of general or broad-based sales tax.  In fact, about 22% of all local tax revenue in the US comes from sales taxes.

Most of these taxes are strictly regulated by the state constitution or state legislation, which stipulate the conditions under which they may be used, and the maximum rate that can be levied.  Local governments in Mississippi can only have a general sales tax rate of up to 0.25%, while those in Alabama can levy a general sales tax of up to 8.0%.

The idea of a penny tax for municipal infrastructure takes off from a similar tax used in Oklahoma City to fund recreation and cultural infrastructure, the Special Purpose Local Option Sales Tax (SPLOST) used by local governments in the state of Georgia.

In Georgia, counties and municipalities that wish to establish a SPLOST tax first prepare a list of projects to be funded by the tax.  This list, and a proposal for up to 1% SPLOST, are then put on the ballot at a regularly scheduled local election.  If approved, the tax comes on, the projects proceed, and government follows up with regular reports on the tax, including the amount of revenue collected, the projects completed, and those still in progress.

After six years have elapsed, the tax automatically sunsets—it comes off.  To reinstate the tax, a fresh list of projects must be identified, and another proposal for SPLOST submitted to voters in a referendum.

As noted already, many of these referendums are successful.  And yes, they succeed even in jurisdictions with a reputation for being virulently “anti-tax.”  That includes places like Cobb County, Georgia where the March 25, 2011 SPLOST referendum—passed.

The Canada West Foundation’s research on local finance and infrastructure has been international in scope.  The search for optimal infrastructure funding tools should not be restricted to historical Canadian practice.  There is much to learn and appreciate from the approaches taken in other countries.  A small, local, and voter-approved penny tax is one such innovation that could do much boost our infrastructure investments.

You may also be interested in parts I, II, and IV of the “1¢ Solution to a Billion Dollar Problem” series.