Hugh Mackenzie
October 2004
This report was made possible thanks to the following sponsors: Alberta Friends of Medicare ; B.C. Health Coalition ; B.C. Nurses Union ; Canadian Health Coalition ; Canadian Union of Public Employees ; National Union of Public and General Employees ; Ontario Federation of Labour ; Ontario Health Coalition
After decades of denial, governments at all levels concede that they face an urgent necessity to
plan for funding the revitalization of virtually all forms of public infrastructure. Whether the subject
is roads, public transit, affordable housing, sewer and water services, schools, colleges and
universities, border crossings or health care and hospitals, the basic facts are similar.
We face a two-dimensional challenge in public infrastructure funding. We must renew
infrastructure that was allowed to deteriorate through deferral of maintenance, especially during
the decade following the 1991 economic recession. We are also challenged to finance future
needs resulting from a number of factors, including changes in population, demography and
income distribution, in part by more stringent environmental and public health standards, and in
part by the capital intensity in the delivery of key public services.
Many governments are now claiming that the public sector’s needs for capital investment have
outgrown our ability to pay now and in the future. Using rhetoric that is reminiscent of the “There is
no alternative” mantra of Margaret Thatcher’s Britain in the 1980s, it is asserted – without a shred
of proof – that the only way to meet our needs for infrastructure renewal is to develop public-
private partnerships that will attract private capital to the financing of public infrastructure.
The facts do not support any of these assertions. Whether we look at infrastructure investment in
general, or at hospital capital in particular, the evidence does not support the assertion that our
needs have outrun our ability to pay. In Canada’s relatively recent history, we have made
investments in public capital greater than those that would be required both to meet current needs
for capital investment and to address the backlog of unmet needs. The need for public capital has
not increased. Rather, funding for public capital has dropped dramatically.
