Behind the Report: Infrastructure Governance in Canada

Developed by the Future of Infrastructure Group (FIG), Infrastructure Governance in Canada is a first-of-its-kind report, outlining seven fundamentals for creating strong markets and community impact through infrastructure. Today we are joined by John Allen, Executive Director of FIG to discuss the key objectives and findings, and how the report can be used by all levels of government to deliver infrastructure projects with the greatest benefit.

What were the objectives of the report?

While infrastructure involves timelines that can run over five years, ten years, or longer, political cycles are much shorter. For a country like Canada with a federal system of government and powerful cities, elections occur frequently. As federal, provincial, and municipal levels of government all have significant power over infrastructure, any change in government or leadership can put years of work on planning or procurement - as well as funding - at risk.

The main objective of the report was to explore how governments can help the infrastructure sector reach its potential by providing stable annual spending, certainty around project timelines, and confidence in the project pipeline. It also aims to help build internal government capacity, and enable industry to do the same, so together we can deliver more projects on time and on budget.

The report provides the foundation for good governance and encourages consistency around project priorities if there is a change in government.

Why is it particularly timely?

With infrastructure and clean energy investment ramping up in the United States, Canada needs to create an inviting environment for companies to bid on and deliver infrastructure projects. The country is making historic levels of investment while also grappling with inflation, labour pressures, and a booming homebuilding market, so there is a real need to drive efficiency and value.

With regular elections and changes in government, it is important to lock in good habits. Governance and good process don’t tend to win votes, although when those processes fail - and impact a project - it can be very damaging for governments and leaders. New governments tend to focus more on new project announcements, so often it is only after a few years in office that they start exploring ways of improving how to better plan and deliver infrastructure.

For example, publishing a long-term pipeline is probably one of the most helpful and effective ways a government can provide clarity and certainty to the market. This may not be immediately obvious to a new minister, so by highlighting it as a fundamental we hope governments will take note sooner and build on what is already there.

The report identifies seven fundamentals of good infrastructure governance at federal, provincial, and territorial levels. What are they and how can they create a foundation for stronger, more competitive infrastructure?

The seven fundamentals are:

1. A long-term infrastructure plan: A ten-year plan that outlines overall objectives and maps out infrastructure needs based on economic, social, and environmental goals
2. Evidence-based project selection: A transparent approach to selecting projects, using evidence and clear, comparable metrics
3. A published project pipeline: A publicly available, regularly updated list of projects spanning whole-of- government, ideally all levels within the same jurisdiction
4. A specialist infrastructure agency: A centre of excellence to plan, procure, and / or deliver projects and support other departments
5. A project delivery roadmap: Guidance so government project managers can ensure consistency and best practice at every stage from planning through to operations and maintenance
6. An infrastructure sector charter: A set of commitments to work together with industry to create a more innovative, productive, and collaborative infrastructure sector
7. A digital commitment: A clear commitment to move away from paper to digital tools at every project stage from design to operations and leverage the value of data collected, as well as insights for future planning and delivery.

Collectively, these fundamentals encourage a more stable level of investment and enhance market certainty. They help ensure projects are selected on merit, provide the greatest benefit to communities, and use the best tools and processes so projects have a better chance of being delivered on time and on budget.

What findings have you found most important or insightful?

Governments are currently facing inflationary pressures alongside a desire to both deliver on promised projects while also showing they are being prudent with taxpayer money. This has led them to look more holistically at the functioning of the market, including governance.

There appears to be a movement toward more widespread adoption of some fundamentals, which is encouraging. Alberta recently passed the Infrastructure Accountability Act and created the province’s 20-Year Strategic Capital Plan. British Columbia published its Major Infrastructure Projects Brochure, listing all public sector projects in the province over CAD50 million. And this year, Manitoba released its first Multi-Year Infrastructure Investment Strategy. Quebec also became the first province to produce a plan specifically designed to help the sector succeed.

Did you find any examples of all seven fundamentals being applied?

Quebec is the only province with all seven fundamentals in place. We also identified Quebec as leading the way on several fronts for how those fundamentals are structured. The province’s long-term plan spans 10 years and is updated annually, with a focus on state of good repair, and is based on steadily growing, stable annual budgets. Quebec is also the only province to have a plan to work together with industry to build capacity and drive innovation, and it is leading the way in the use of digital tools. 

Alberta has six fundamentals in place, and Saskatchewan has five, while some provinces have none available publicly. Except Quebec, no government has looked at developing an infrastructure charter for industry. That is, something similar to the construction accords developed in New Zealand and Scotland to create conditions where companies and governments can work better together. Given the long-running challenges with projects quickly becoming adversarial, this is an area that could have an oversized positive impact.

How can governments facilitate knowledge sharing and collaboration?

In this report, we based our assessment purely on what was publicly available. Transparency provides huge value in terms of market confidence and in sharing knowledge between governments. This can spur more dialogue between jurisdictions and provide wider access to some of the work that has already been done, so it can be built upon and raise the bar across the country.

There is a big opportunity for provinces to collaborate around infrastructure governance as the challenges faced are common across the country, and beyond. Different government agencies and ministries do talk but it is mostly ad hoc, so a more formalised approach would help them share the load when it comes to building systems and processes that underpin stability and certainty.