The great enabler

Infrastructure. A great Canadian (a Nova Scotian, in fact) asked me more than a year ago why more was not written about the value and importance of infrastructure, and suggested I make it the subject of one of these opinion pieces. I thought what you are now thinking—this is about roads and bridges and airports, that sort of thing. I missed the point completely and therefore dismissed it for too long as unimportant. What a mistake!

I first went to China in 1992. The four airports I used in that visit no longer exist. No, I am not talking about additional runways or new terminal buildings. I am saying brand new airports have replaced them! When was the last time a new major airport was built in North America? Of course, this alone is not what is responsible for China’s record growth, a record unequaled in the history of the world. But it is infrastructure in all its various forms which has laid the foundation for that growth. It includes all the transportation assets which are the back bone of a modern economy (roads, high speed rail, public transportation systems in the urban cores), but it also extends well beyond that: telecommunication capabilities (China has 700-million mobile phone users), widespread internet access, connectivity at all levels. The less obvious infrastructure is the planning apparatus within government which conceives and details the growth of these assets years in advance. It includes the growth of the banking sector without which the building of small businesses into larger ones would not be possible. It reaches to the regulatory system which must contemplate the rapid growth of the economy and ensure there is some rule of law to govern the emergence of new sectors.

This didn’t happen by accident. This involved a massive effort, great foresight and the intelligent spending of hundreds of billions. China is our competitor. They want to be better than us in everything we do and believe we are good at, from education to health care to the technology sector. And they are engaged in pursuing a plan to do just that.

How are we responding? Not very well. The building of pipelines to the west coast to allow Alberta oil to be shipped to Asia is bogged down in native rights issues and arguments by B.C. regarding the relationship between environmental risk vs. reward. Meanwhile, oil production in Alberta is being discounted by some $30 a barrel (at the rate of 1.5 million barrels a day) thanks to the inefficiency of our transportation assets, including access to the refinery sector in Texas. No utility is even considering the construction of a new nuclear power plant in North America because the regulatory approval process can last up to 10 years and cost a billion dollars without any certainty permission will ever be granted. Meanwhile, how many new nuclear power plants do you think are under construction in China?

Want to build a new bridge over the Hudson River outside New York to replace one about to fall down? How about a new bridge in the transportation corridor between the U.S. and Canada, the subject of the largest flow of commercial traffic between our two countries? They’re bogged down in environmental and legal battles or turf wars between those who want a private sector component and those who only want the public sector design/ construction/ownership formula. There is no single authority, not even our prime minister or the president, who can overrule such nonsense and say “this is a national priority, we must get on with it.”

I am not advocating for a dictatorship. I am, however, for a widespread realization that our competitor is making huge inroads, progress we are years if not decades away from being able to replicate. They are growing at eight per cent; we are hoping desperately to grow at three per cent.

Thomas Freidman, the wellrespected NY Times columnist, is promoting an enormous investment in telecommunications infrastructure in the U.S., to provide over 100 times the average bandwidth currently enjoyed by U.S. households. That’s vision and foresight—trying to contemplate the future and plan to both enable and profit from it.

Another example, closer to home, was the Nova Scotia government carrying out preliminary geological survey work on the Scotia Shelf. This was then made available to the oil companies, which resulted in agreements from two (Shell and BP), to commit a further $1.5 billion in exploration activity. Such examples illustrate the sort of thinking in which we need to be engaged.

Infrastructure is a huge enabler. It is the difference between investing money, which we are not good at, versus spending money, which unfortunately we are too good at.

Let’s hope folks can grasp that difference and get on the investing bandwagon.

John Risley
About John Risley

John Risley, president of Clearwater Fine Foods Inc., regularly engages in policy debate as a member of the World Presidents' Organization, the Chief Executives Organization and as a director on the Board of the Canadian Council of Chief Executives.

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