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June 1, 2009

Federal infrastructure funds fail to yield results, MP says

The following is an excerpt from a letter circulated to the media by Liberal finance critic John McCallum, MP for the riding of Markham-Unionville.
Four months ago, Finance Minister Jim Flaherty tabled his 2009 budget, promising immediate, urgent stimulus with the words: “Canada is in recession today. Measures to support the economy must begin within the next 120 days to be most effective.”

It’s now 120 days later, and the only result the Harper Conservatives can point to is a record deficit of at least $50 billion. No job creation. Next to no construction underway on their announced infrastructure projects. A deficit never before seen in Canadian history. And all this mere months after predicting a surplus and no recession.

Far from creating or maintaining “close to 190,000 Canadian jobs” as promised in the January budget, nearly 350,000 Canadians have already lost their jobs during this recession.

Four months after promising $4 billion in emergency economic stimulus spending, the government continues to stall, making re-announcements with no job creation commitments and no details on when money will flow or when projects will start.

The Canadian Press did a recent examination of a dozen key infrastructure projects that were promised in January’s budget and found little work is actually underway, even as the construction season is well underway. Two international bridges in Ontario border cities, for example, won’t even see construction tenders go out until next month.

The government adopted a flawed, politically biased application-based approach to infrastructure funding, despite having an alternative process at their disposal.

As proposed by the Liberals and passed by Parliament, using the existing gas tax transfer would have immediately allocated infrastructure dollars to communities on a per capita basis.

The Conservatives should have learned from their failure to get nearly $3 billion in infrastructure spending out the door in good times, flowing only five percent of this funding to communities desperate to fund public transit, roads and bridges. Instead, they showed their preference for pork-barrel politics by directing disproportionately more infrastructure funding to Conservative ridings.

Meanwhile, grim economic news keeps coming. Personal bankruptcies have risen steadily since this government came to power in 2006, spiking by 50 per cent in December 2008.

They also continue to tune out calls for more investments in science and research. One one of the best ways to stimulate the economy is to invest in the jobs of tomorrow.

John McCallum is the Finance Critic for the Liberal Party of Canada and former chief economist of the Royal Bank

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