My latest column in Business in Vancouver:
Hard to dig Ottawa’s shovel-ready spending
A lot of money is suddenly going to be spent on “shovel-ready” infrastructure. The question is: what kind of hole are we digging?
There’s a battle underway for the hearts and budgets of the decision-makers to shift spending priorities.
Some argue to go green, others for more traditional approaches. One pretty good indication of who prevails will be the comparative amounts spent on new roads and bridges versus transit and alternatives.
Will government continue facilitating more of what we’ve been doing for the last half century: high-energy, low-density development designed around the car and truck? There’s a huge constituency in favour – an alliance that in the 1920s called itself “Motordom.” Auto clubs, car dealers, vehicle manufacturers, road builders, truckers and transportation departments – they’d prefer the world to unfold as it has: more pavement, more cars, more economic activity, more car dependence.
At this time of writing, it doesn’t look all that promising for those calling for more public transit, alternative energy solutions and less sprawl.
“Obama gave highway officials much to hope for,” wrote Jon Norquist of the Congress for the New Urbanism, “when he called his plan ‘the largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s.’ … The bill (for transportation spending) makes a relatively small investment in transit ($8 billion) and trains ($1 billion), while mostly passing the buck – or 30 billion bucks, to be precise – to state transportation departments and their long lists of back-ordered highway projects.”
Apparently, those most likely to get the money for shovel-ready projects are those who own the shovels.
We’ve been there before. To spend vast amounts of borrowed money to build more roads and bridges to extend suburbia is to take a giant bet similar to the one taken with the last round of borrowed money. The subprime market ballooned on the expectation that various versions of the McMansion and SUV were available to all and could be leveraged with cheap money in a perpetually rising market.
It began to collapse when the run-up in oil prices undermined the confidence that it could all be paid for.
The shovel-ready strategy assumes the point of the stimulus packages is to get back to business as usual, as though the economic meltdown had nothing to do with our way of life, only our way of financing.
To fund the kind of infrastructure that exacerbates urban sprawl makes a host of unrealistic assumptions, mainly that there will be no disruptions or volatility in the oil market so great as to induce shortages. It assumes we can effectively address climate change or not worry about the consequences. It assumes that in the face of such threats there will be no technological problems we can’t overcome, that we can do it overnight and that we will have a secure supply of affordable energy with which to do it.
That’s a bet, in light of recent experience, we won’t likely win. The real question is not whether projects are shovel-ready but whether they’re shovel-worthy.
Speaking of unfortunate investments, a thought on the Olympic Village.
Some critics think the city took on too much risk in southeast False Creek. Consider, then, the council of 1972, which decided to proceed with a real-estate play a little further to the west, using city-owned lands to develop a city-planned megaproject suitable for families with children, built on polluted soils next to an industrial sewer on an inner-city site, at a time when people were decamping to suburbia. And they kept ownership of the land.
That council was led by an investment firm founder named Art Phillips. It was the risk that launched the redevelopment of False Creek and led to the Vancouver we know today. •