Ottawa Sun
Published: Wednesday, January 21, 2009

Haste should not displace prudence

While next Tuesday's budget will contain historic and multi-year deficits, the government is presently swimming in a surplus of stimulus advice. So here is mine.

Both the prime minister and finance minister have repeatedly stated a fiscal stimulus perhaps as big as $40 billion, mostly through infrastructure projects, will dominate and permeate the budget. But this haste should not displace prudence or reasonable caution in the oncoming stampede to identify, fund and construct so-called "shovel ready" projects across the land.

As columnist Greg Weston has noted, the haste to get the trucks and tractors moving so everyone can be happy and confident -- to paraphrase Jean Chretien's musings from the 1993 campaign -- can lead to bridges and roads to nowhere. Examples such as canoe museums, riverfront fountains and bocce ball courts sadly come to mind.

Moreover, the almost messianic zeal with which Canadian leaders of all political stripes have become prime-the-pump, born-again economic Keynesians is a touch troubling. Yes, monetary policy in terms of record-low interest rates has failed to stem the made-offshore-but-affecting-us-nonetheless international credit crisis.

And yes, government intervention through fiscal policy tools complete with temporary deficits are inevitable. But infrastructure spending is not the be-all and end-all.

There is a limit to the magnitude and duration of the economic stimulus achieved through massive infrastructure spending. This isn't the Great Depression with its 30%-plus unemployment where labourers can simply be uprooted and temporarily housed to build the Chateau Montebello or Hoover Dam, for example. In addition, the lengthy list of projects compiled by the Federation of Canadian Municipalities and others will run into real constraints of capacity and supply. Depending on the region, there are only so many trucks and backhoes, not to mention skilled labourers, available.

The bottom line is all three orders of government need to be strategic and ensure the need-to-be-done projects get funded first. And if they consistently keep this focus, then realistically, the nice-to-have projects and boy-wouldn't-that-be-cool projects need not, nor should they, see the light of day. To this end, three simple tests should be employed by our elected officials to separate the worthy from the wasteful.

First, if the project is a slam dunk photo-op, be wary. Ribbon cuttings at bridges to nowhere make for great copy, but fixing our inner-city sewers, improving rural hydro-electric transmission grids, digitizing hospital records, funding promising health-care technologies or research, and building clean water systems on aboriginal reserves are long overdue for consideration, cash and construction.

Next, each project must be intergenerational. If a project does not endure to serve our children who will pay the interest on the deficits, then our politicians must find projects that will. And as citizens, we must hold them to account to do so.

Finally, the projects in question must not only lever and deliver immediate economic spinoff activity, but demonstrably enable future commerce and enhance local quality of life. As for the rest of the budget, the focus on infrastructure projects must be complemented with measures for Canadians who are hurting.

From fixing the EI system to targeted tax relief for lower- and middle-income earners to initiatives to strengthen industries of the future (as opposed to bailouts to sunset companies), there is no shortage of problems that demand innovation, leadership and action next week.