By Jock Finlayson, ICBA Chief Economist
In the last decade, the quality and adequacy of Canada’s public infrastructure has been attracting more attention. Recent high profile “failures” of key infrastructure services in Calgary and Montreal have been front-page news.
Statistics Canada tracks what it defines as the country’s “core public infrastructure,” consisting mainly of transportation and water infrastructure assets. The agency estimated the replacement value of these assets at Cdn$2.6 trillion as of the end of 2022. Of this, transportation infrastructure makes up almost two-thirds (by replacement value) and water infrastructure the rest. Public transportation infrastructure includes roads, bridges and tunnels, public transit assets, and “other” (sidewalks, bike paths, etc.). Water infrastructure is divided into three categories of physical assets: potable water, wastewater systems, and stormwater infrastructure.
Many reports raise concerns about the continued reliability and longevity of core public infrastructure assets. Statistics Canada itself highlights the poor condition of a sizable fraction of the country’s roads, estimating that replacing those “rated as being in poor or very poor condition” would cost $250 billion. Unknown portions of other categories of public transportation infrastructure are also in “poor or very poor” shape. In the case of water infrastructure, over one-tenth of these assets are officially deemed to be in “poor or very poor” physical condition.
It’s important to note that local and regional governments – not Ottawa or the provinces – oversee and own more than 70% of Canada’s core public infrastructure. Specifically, they are responsible for 64% of the replacement value of roads, 76% of that of public transit assets, and 82% of “other” transportation infrastructure. Local and regional governments are also mainly responsible for water infrastructure systems in communities across the country.
B.C. and Alberta
The same Statistics Canada survey breaks out the data on core public infrastructure by province, allowing us to get a sense of the replacement value and the physical condition of transportation and water assets in B.C. and Alberta.
Figure 1 shows the estimated replacement value for various asset categories in the two provinces as of the end of 2022. For B.C., it would cost roughly $180 billion to replace existing roads, $72 billion for bridges/tunnels, and $26 billion for other transportation-related public infrastructure. For water infrastructure assets, Statistics Canada puts the replacement value at almost $110 billion.
Figure 1
Turning to Alberta, the replacement value of roads is almost $150 billion, while that for bridges/tunnels is estimated to be $26 billion. Other transportation infrastructure assets would cost $18 billion to replace. Of interest, replacing water-related infrastructure in Alberta would be more costly than in British Columbia, for reasons that aren’t clear. In aggregate, the replacement value of Alberta’s public water infrastructure assets is north of $155 billion.
What about the physical condition of these public infrastructure assets in the two provinces? In B.C., roads with an estimated replacement cost of $21.6 billion are in poor or very poor condition (equating to 12% of roads based on replacement values), along with some $14 billion of water-related infrastructure assets (13% of the total replacement cost). The situation in Alberta isn’t much different. There, roads with a replacement cost of $25 billion are in poor/very poor shape (amounting to 17% of the total value of this asset category). For water-related infrastructure assets, the comparable figure is roughly $12 billion (8% of the replacement cost for all types of water infrastructure). Despite the well-advertised calamity that befell the City of Calgary’s water system last summer, overall it seems that existing water infrastructure assets are in better shape in Alberta than in next-door B.C.
Cost Escalation
Statistics Canada notes that the cost of replacing road and water systems judged to be in poor/very poor condition jumped by over $100 billion between 2020 and 2022. The upward pressure on costs has continued since then. As a result, the actual cost of replacing the various public infrastructure assets considered in this briefing note is substantially higher today than the figure of $2.6 trillion cited earlier. This includes transportation and water infrastructure assets that are crumbling or are close to reaching the end of their useful lives.
