C E O ’ S M E S S A G E
The Road Ahead
Bold changes needed for management and
planning of Alberta’s highway network
If there’s one thing that Americans agree on, it’s that
investing in their highways and infrastructure moves
their economy. And when Americans mobilize resources
to achieve a bricks and mortar objective, they always go big.
President Biden’s proposed infrastructure plan is a jawdropping
$2 trillion wish list. That’s on top of the nearly $2
trillion in COVID-19 relief for individuals and businesses
announced previously. Even if the President is compelled to
temper his request, he’s likely to get Congressional approval
for most of the $572 billion in his plan for core transportation
civil infrastructure in roads, bridges, ports and airports, rail,
transit and vehicle electrification stations.
Meanwhile, Canada is set to be left in the dust. Our federal
government neither grasps economic development priorities,
nor has the competence to deliver on the meagre
amounts announced for infrastructure, preferring to blame
the bureaucracy of provinces for its own inaction. More than
$2 billion of announced federal money is not moving out of
Ottawa, conveniently sitting on the Liberal Government’s
balance sheet. And there’s virtually no additional funding in
the April 19 federal budget for core transportation. Canada’s
infrastructure is lagging and that contributes to diminishing
competitiveness and attractiveness for investment.
We are about to see a labour drain
President Biden’s plan will draw resources and talent from
Alberta, and we are already seeing the impact on lumber and
other material prices. With an eight-year spending plan in
place; favourable risk, tax and regulatory environments; and
a low Canadian dollar, the opportunities for engineering and
construction will bloom in the USA and wither in Canada.
We can’t wait for Ottawa to help us. Alberta must make
its own bold changes for economic recovery. The Alberta
Government can start by making a strong commitment
to its own house. Highways are a provincial government
monopoly. Our primary and secondary highway system is a
$70 billion asset. Yet, Alberta Transportation cannot count
on Cabinet to commit to budgets more than 18 months out.
Even then, if Cabinet decides mid-year to pull back money
By Ron Glen, CEO, ARHCA
from AT that hasn’t been committed by contract, they can.
We’ve seen this many times in the past.
A bold solution
ARHCA is advocating for a real strategy to improve the performance
of Alberta’s highway system. The strategy asks
for provincial commitment by legislation to an appropriate
amount of funding over lifecycle timelines. This will reduce
the risk for contractors investing in the Alberta market of
having the rug pulled out from under them with a change
in government or some other short-term political decision.
One potential solution is to create a new asset management
agency for highways that has a long-term contractual
relationship with government. In return for meeting performance
targets to improve the overall condition of highways,
the agency would receive an annual payment stream protected
by legislation. This would provide the agency with a stable
and transparent multi-year runway for Alberta highway
construction and maintenance. I call this model the Alberta
Highway Trust Corporation. We already have other examples
to draw from right here in Alberta that assure public services
are reliable, publicly accountable and taxpayers benefit from
stable private sector project delivery.
ARHCA has always provided government with solutions
to problems; that’s the nature of construction contractors.
And Alberta has always been a leader, the maverick of
Canadian provinces. Now is the time to rise to post-pandemic
fiscal challenges and adopt bold solutions just as our neighbors
and competitors to the south do. The Alberta Highway
Trust would be able to project a multi-year spending profile,
giving assurance to industry of a predictable long-term horizon.
It’s one way for Alberta to provide certainty and reduce
risk for an important part of the private sector. The bonus
part – all the levers of this project are in Alberta’s hands. n
We can’t wait for Ottawa
to help us. Alberta must
make its own bold changes
for economic recovery.
ARHCA has always provided
government with solutions
to problems; that’s the nature
of construction contractors.
And Alberta has always been
a leader, the maverick of
Canadian provinces.
2 www.albertaheavy.ca