Basic Urban Infrastructure and Its Community‐Wide Benefits DRAFT REPORT
October 13, 2011
Basic Urban Infrastructure and Its Community‐Wide Benefits Prepared for: Canadian Home Buildersʹ Association Prepared by: Altus Group Economic Consulting 33 Yonge Street Toronto Ontario M5E 1G4 Phone: (416) 641‐9500 Fax: (416) 641‐9501 economics@altusgroup.com altusgroup.com October 13, 2011 DRAFT
October 13, 2011 (DRAFT) EXECUTIVE SUMMARY The Canadian Home Builders’ Association (CHBA) retained Altus Group Economic Consulting (Altus Group) to provide an analysis of the economic, environmental and social benefits of basic urban infrastructure investment on the community. Background The evolution of communities has always been linked closely with the development of common, basic infrastructure. The emergence of cities was coincident with community investment in basic infrastructure systems from at least the time of the Roman Empire. Infrastructure is Fundamental to Community Infrastructure is fundamental. It provides the conditions necessary for urban life. As communities have evolved, so has the scope of basic urban infrastructure. Infrastructure ensures public health and safety, supports local economic development and contributes to the delivery of public services to the community. The benefits of basic urban infrastructure are hierarchical and are based on meeting the hierarchy of needs of residents in a community, from public health and safety, to efficient movement of goods and people, to a broad range of public services including health care, education, recreation, public security, culture and communications. The Benefits from Infrastructure are Overwhelmingly Community‐wide An array of public assets serve the community starting with basic urban infrastructure (such as city roads, fire hydrants, highways, bridges, public transit systems, a water supply, sanitary systems and wastewater treatment), public facilities (such as hospitals, libraries, schools, fire halls, etc.,), and including public amenities (such as parks). Together this public capital becomes a part of the foundation of a community, supporting daily social and economic activities. Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page i October 13, 2011 (DRAFT) The Whole Community has a Responsibility for Infrastructure Investment Every municipality in Canada makes provision for basic urban infrastructure. Provincial governments require this and delegate the necessary authority while also establishing appropriate standards for the performance of basic infrastructure services. Basic urban infrastructure has always been recognized as providing a common good and community‐wide benefits. Broadly, Canadian communities are organized around the provision of the basic infrastructure needed to support them and which benefit all residents. Traditionally, the cost of developing and maintaining such basic infrastructure was seen as a community responsibility, funded ultimately through property taxes. Losing Touch with this Principle has Led to Underinvestment in Infrastructure In recent decades, the inherent relationship between provision of infrastructure and the concept of ‘community’ has become less distinct. This has led to underinvestment in both the maintenance and expansion of community infrastructure and a growing ‘infrastructure deficit’. As new economic and fiscal realities have emerged, particularly in the aftermath of the world financial crisis, there has also been a growing disconnection between communities’ infrastructure needs, and fiscal policies required to underwrite these needs. This has led to contradictions between long‐established public policy principles and the fiscal mechanisms employed by municipalities to meet the costs of basic infrastructure. Approaches to infrastructure financing that are inadequate or inequitable undermine the long‐term viability of our communities. Purpose for this Study In order to address the question of how basic urban infrastructure should best be created and maintained, it is first necessary to revisit the nature of the benefits it provides within communities. This paper addresses that question. Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page ii October 13, 2011 (DRAFT) Key Findings from this Study Well‐functioning basic infrastructure promotes community‐wide public health and safety: 
Good water supply and wastewater treatment systems prevent the spread of communicable diseases; 
Good roadways improve community health by reducing traffic congestion and accidents; 
Adequate community fire suppression infrastructure, facilities and equipments save lives and reduce property damage in fire situations; and 
Well‐maintained health facilities, which themselves depend critically on well‐functioning basic urban infrastructure, are directly connected to the health of the residents in a community. Recent studies and experience such as the Walkerton drinking water crisis and the collapse of an overpass in Quebec, illustrate clearly that when inadequate investment results in massive infrastructure failures, increased mortality, public panic, and a general erosion of public health and safety ensue. Basic urban infrastructure benefits the health and safety of the immediate users, but overwhelmingly, the benefits are felt across the whole community. Public health and safety crises weaken public confidence and disrupt the economic and social activities in the community and lead to economic loss. Investment in basic urban infrastructure generates numerous community‐
wide economic benefits: 
It is essential to productivity growth in a community; 
It reduces traffic congestion and save billions of dollars for the economy because people and goods can move efficiently; 
It supports economic development in a community by facilitating the exchange of goods and services; 
It provides directly supports economic development through construction and related spin off jobs; 
It promotes private business investment; and Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page iii October 13, 2011 (DRAFT) 
It improves functioning of the labour market by improving the regional accessibility and reducing commute time. Basic urban infrastructure has significant community‐wide environmental benefits: 
A well‐maintained water supply, storm water and wastewater treatment systems reduce water leakage, aiding water conservation and prevent degradation of water resources; and 
A well‐functioning transportation system mitigates traffic congestion, reducing automobile emissions and air population. A solid infrastructure base supports a wide array of community facilities and amenities, which, in turn, are critical for a community’s social and cultural development, including: 
Helping the communities accommodate an aging population; 
Promoting regional agglomeration; and 
Supporting community safety and security. Conclusion Well‐functioning basic urban infrastructure is a fundamental element of the community. Infrastructure ensures public health and safety, supports local economic development and contributes toward the delivery of public services to the community. The benefits of basic urban infrastructure, therefore, are overwhelmingly community‐wide. Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page iv October 13, 2011 (DRAFT) TABLE OF CONTENTS Page EXECUTIVE SUMMARY ................................................................................. i 1 INTRODUCTION AND DEFINITIONS ............................................... 1 1.1 Background ..................................................................................................................... 1 1.2 Definitions ....................................................................................................................... 1 2 THE ROLE OF BASIC INFRASTRUCTURE IN URBAN DEVELOPMENT ........................................................................................ 3 3 HEALTH AND SAFETY BENEFITS OF BASIC URBAN INFRASTRUCTURE .................................................................................. 7 4 ECONOMIC BENEFITS OF BASIC URBAN INFRASTRUCTURE ................................................................................ 10 5 ENVIRONMENTAL BENEFITS OF BASIC URBAN INFRASTRUCTURE ................................................................................ 20 6 SOCIAL AND CULTURAL BENEFITS OF BASIC URBAN INFRASTRUCTURE ................................................................................ 23 APPENDIX A: DEVELOPMENT POLICIES ON PUBLIC INFRASTRUCTURE APPENDIX B: RECENT INCIDENTS INVOLVED WITH INFRASTRUCTURE FAILURE APPENDIX C: BIBLIOGRAPHY Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page v October 13, 2011 (DRAFT) 1
INTRODUCTION AND DEFINITIONS The Canadian Home Builders’ Association (CHBA) retained Altus Group Economic Consulting (Altus Group) to provide an analysis of the economic and social benefits of basic urban infrastructure investment on the community. 1.1
BACKGROUND Infrastructure is fundamental. It provides the conditions necessary for urban life. The benefits of basic urban infrastructure are hierarchical and are based on meeting the needs of residents in a community, from that necessary for public health and safety, to that needed to support the movement of goods and people, to a broader range of public services including health care, education, recreation, public security, culture and communications. In order to address the question of how basic urban infrastructure should best be created and maintained, it is first necessary to revisit the nature of the benefits it provides within communities. This paper addresses that question. Well‐functioning infrastructure is a fundamental element of viable communities. Infrastructure ensures public health and safety, supports local economic development and contributes toward the delivery of public services to the community. The benefits of infrastructure, therefore, are overwhelmingly community‐wide. 1.2
DEFINITIONS The government owns a wide array of public assets, ranging from city roads, fire hydrants and water system to community centres, hospitals and schools. This report discusses public assets within the context of three major categories1: 
Basic Urban Infrastructure: A group of public assets that are provided by the municipality and other orders of government to deliver transportation, water and sewage treatment services to the local community as basic urban infrastructure. This includes city 1
In addition to these three categories, there is quasi‐public infrastructure, including telecommunication systems and the electricity grid. Although generally considered public assets, a large portion of the investment is from the private sector such as telecommunication firms and public utility companies. Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page 1 October 13, 2011 (DRAFT) roads, fire hydrants, highways, bridges, public transit systems, water supply, sanitary systems and wastewater treatment. These assets are essential to the basic function of a community and vital to the daily life and health of local residents. 
Public Facilities: This group of public assets includes hospitals, libraries, schools, fire halls, solid waste processing facilities, etc., generally buildings that serve the broader daily needs of local residents; and 
Public Amenities: This group of public assets contains public squares, parks, water fountains, etc. Amenities make life more convenient and enjoyable for local residents and help governments deliver social and cultural services. While these amenities and facilities are not themselves basic urban infrastructure, they depend critically on a community’s infrastructure to operate effectively. Together this public capital becomes a part of the social foundation of a community, providing the necessary resources to support daily social and economic activities. Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page 2 October 13, 2011 (DRAFT) 2
THE ROLE OF BASIC INFRASTRUCTURE IN URBAN DEVELOPMENT Basic urban infrastructure is closely linked to the urban development and fundamental to the formation of modern urban centres. “Infrastructure has a significant positive impact on urbanization.”2 Over the years, society has gradually evolved and progressed with innovation and the implementation of new technologies: a predominantly agriculture society was replaced in the nineteenth
century by an urban industrial society, which in turn has been recently
succeeded by a postindustrial society more dependent on technology,
communications, and specialized knowledge than at any time in the
past.3
Basic urban infrastructure has played a crucial role in these major societal changes: 
During the predominantly agricultural society, there were few major urban centres with well‐built basic infrastructure; 
During the industrial revolution, core infrastructure such as city roads, fire hydrants, water supply and sewerage systems and utilities were built; and 
Over the last several decades, intercity and interstate highways, airports, communication and public transit systems have been the backbone of economic and social development. “Economic development and urbanization could not have occurred without infrastructure creation.”4 Basic infrastructure remains the foundation of urban development. Urbanization is essentially about the pooling resources for better protection and prosperity. Basic urban infrastructure is essential to urban economic development, facilitating the exchange of goods and services within a community. 2
Pradhan, Rudra Prakash, Does Infrastructure Play Role in Urbanization: Evidence from India, Indian 3
Hanson, Royce (Editor), Perspectives on Urban Infrastructure, National Academy Press, Washington, 4
Ibid. Page 5. Journal of Economics and Business, June 2007. D.C., 1984, Page 5. Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page 3 October 13, 2011 (DRAFT) Communities require investment in basic urban infrastructure. City streets, fire hydrants, water supply and sewerage systems, and utilities are needed as urbanization occurs. Without basic urban infrastructure, viable cities simply do not exist. The benefits from essential infrastructure are overwhelmingly community‐wide. Infrastructure ensures public health and safety, supports local economic development and contributes toward the delivery of public services to the community. The benefits of basic urban infrastructure are hierarchical and can be categorized into four areas based on the hierarchy of needs of residents in a community, from the primary needs for health and safety to the higher‐order needs for social and cultural activities (see Figure 1): 
Health and Safety; 
Economic; 
Environmental; and 
Social and Cultural. Figure 1 Benefits of Public Infrastructure
Social
& Cultural
Environmental
Economic
Health and Safety
Source: Altus Group Economic Consulting
These benefits from basic urban infrastructure are overwhelmingly community‐wide, not limited to particular individuals. For example, a Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page 4 October 13, 2011 (DRAFT) newly constructed highway not only benefits commuters who drive on the highway, but also affect the whole community through: 
Cutting the traffic at other parts of the transportation system and reducing congestion and traffic accidents; 
Reducing automobile emissions and improving air quality with public health benefits across the community; 
Facilitating economic growth, creating jobs and attracting new business investment; and 
Increasing the access to community facilities such as recreation centres and amenities. Community infrastructure requirements are met not simply by investing in new basic urban infrastructure, but also by ensuring proper repairs and maintenance are undertaken on existing infrastructure. Without adequate repairs and maintenance, aging infrastructure will fail to function properly with a loss in public welfare across the community. A construction association in Ontario warns that if the repairs and maintenance are inadequate over a long period, it “can only lead to negative consequences that will adversely affect public safety.”5 Most municipal governments recognize clearly the importance of repairs and maintenance to infrastructure in their long‐term development plans. For example (For more details, see Appendix A): 
Toronto: “The City’s water, waste water and storm water management infrastructure will be maintained and developed to the city‐building objects…by a) providing adequate facilities to support new development and maintaining the infrastructure re in a state of good repair”; 
Ottawa: “The City will carefully predict and monitor the impacts of population and employment growth on infrastructure and the environment in order to ensure that infrastructure is properly maintained and expanded on time to support growth”; 
Calgary: Some of the priorities for the city’s infrastructure projects involve: 5
MMM Group, Ontario’s Bridges Bridging the Gap, prepared for Residential and Civil construction Alliance of Ontario, November 2007, Page 14. Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page 5 October 13, 2011 (DRAFT) 
“Maintenance and lifecycle upgrades for existing infrastructure continue to be the highest priority projects….Investing in infrastructure supports healthy and safe communities.”; and 
“Increasing the supply of safe, secure and well‐maintained public transit…” 
Edmonton: “Given that sound infrastructure is essential to support any community’s goals for growth, economic development, and public safety, our ability to build and properly maintain our infrastructure is essential to ensure Edmonton remains an attractive and cost‐effective place to live and do business”. Governments generally recognize the need for long‐term strategies that guarantee adequate and timely public investment in basic urban infrastructure. Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page 6 October 13, 2011 (DRAFT) 3
HEALTH AND SAFETY BENEFITS OF BASIC URBAN INFRASTRUCTURE Infrastructure is closely linked to our daily lives and plays a vital role in our wellbeing. Infrastructure affects public health and safety in several ways, including: 
Good water supply and wastewater treatment systems prevent the spread of disease; 
Good roadways improve community health. The Federal Reserve Bank of Boston points out: “the construction of a freeway may reduce congestion and thereby support better health (improved air quality due to less smog), greater safety (fewer accidents)”.6 The Conference Board of Canada concurs showing that a better road system lowers commuting time, which reduces drivers’ stress, resulting a positive effect on health7; 
Adequate community fire suppression infrastructure, facilities and equipments save lives and reduce property damages in fire situations. In 2008, there were some 20,400 residential fires across Canada. And, residential fires cause about 1,700 injuries each year over the 2004‐2008 period.8 Community fire suppression systems have prevented thousands from sustained injuries and have virtually made runaway urban fires in Canada obsolete; and 
Well‐maintained health facilities and recreation centres, which themselves depend critically on basic urban infrastructure to function, are directly connected to the health of the residents in a community. 6
Aschauer, David A., Why Is Infrastructure Important? published in Is there a Shortfall in Public Capital Investment, proceedings of a conference held in June 1990, sponsored by Federal Reserve Bank of Boston, Page 23. 7
Antunes, Pedro; Beckman, Kip; and Johnson, Jacqueline, The Economic Impact of Public Infrastructure 8
Altus Group, Gap and Statistical Analysis on Housing Sprinkler Systems, prepared for National in Ontario, the Conference Board of Canada, 2010, page 25. Research Council of Canada, December 2010. Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page 7 October 13, 2011 (DRAFT) Statistics Canada recognizes this wide array of benefits: “infrastructure is thus important not only for the economic benefits it brings, but also because of its impact on, inter alia, health, safety, leisure and general aesthetics.”9 Negligence in the construction, management and maintenance of basic urban infrastructure can cause public health and safety concerns, and even worse, result in the loss of lives. Two recent tragedies, the Walkerton drinking water crisis in Ontario and the collapse of a portion of the de la Concorde overpass in Quebec, illustrate poignantly, by negative example, the vital role infrastructure plays in public health and safety (See Appendix B). It is instrumental for public health and safety that the government take full responsibility to ensure adequate reinvestment in aging basic urban infrastructure. Heavy traffic congestion, due to inadequate transportation systems, can have significant negative impact on public heath: 
Motor vehicle emissions contain pollutants that contribute to outdoor air pollution, which is harmful to people’s health. A recent study on the public health costs of traffic congestion in the 83 U.S. urban areas concluded that there were some 3,000 premature death due to traffic congestion10; and 
Traffic congestion is commonly quoted as one of the contributors to driver stress: Those who are forced to drive below a desired speed,
especially for long distances, tend to report greater levels of
driver stress….50% of highway drivers in the United
Kingdom frequently experience irritation in traffic congestion,
regardless of time demands.11
One effective way to reduce traffic congestion is to increase the capacity of the transportation system by investing in new highways and public transit. 9
Baldwin, John R. and Dixon, Jay, Infrastructure Capital: What Is It? Where Is It? How Much of It Is There? The Canadian Productivity Review, Statistics Canada, March 2008. 10
Levy, Jonathan I., et al., The Public Health Costs of Traffic Congestion: A Health Risk Assessment, Harvard Centre for Risk Analysis, Harvard School of Public Health, 2010. 11
Hennessy, Dwight A., et al., The Influence of Traffic Congestion, Daily Hassles, and Trait Stress Susceptibility on State Driver Stress: An Interactive Perspective, The Journal of Applied Biobehavioral Research, 2000, pp.162‐179, Page 163. Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page 8 October 13, 2011 (DRAFT) Governments understand clearly that basic urban infrastructure is paramount to health and safety of residents and demonstrate this understanding in their guiding plans and policies12: 
City of Ottawa in its long‐term strategy plan states that “water treatment and distribution and sanitary wastewater collection and treatment services are important to the health of both the community and the environment”; 
The goals of the City of Calgary’s Capital Plan includes “Increase Community Safety” and “Protect the Environment and Public Health”; 
The City of Toronto’s Official Plan states as a high‐priority policy under its Strategic Reinvestment framework: “Ensuring the health and safety of the public and maintaining City infrastructure and assets in a state of good repair are municipal investment priorities.”; and 
The Vision for the Edmonton City Council’s Infrastructure Strategy includes “safety of its citizens” as a goal for infrastructure investment. Basic urban infrastructure is paramount to the health and safety of the residents in a community. Recent studies and experiences, such as in Walkerton and Quebec, illustrate clearly that when inadequate investment in basic urban infrastructure results in massive infrastructure failures, increased mortality, public panic, and a general erosion of public health and safety ensues. Basic urban infrastructure benefits the health and safety of the immediate users, but overwhelmingly, the benefits are felt across the whole community. Public health and safety crises weaken public confidence and disrupt the economic and social activities in the community and lead to economic loss. 12
For more details, see Appendix A Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page 9 October 13, 2011 (DRAFT) 4
ECONOMIC BENEFITS OF BASIC URBAN INFRASTRUCTURE Basic urban infrastructure is a significant factor in a community’s economic development. Investment in basic infrastructure generates numerous economic benefits, which are overwhelmingly community‐wide. PRODUCTIVITY GROWTH Most economists acknowledge that basic urban infrastructure has positive effects on long‐term productivity growth. For example, transportation infrastructure improvements can reduce transportation costs that: 
“can affect incentives to work and, hence, the supply of labour”13; 
“can also make it easier for workers to quickly find job vacancies that match their skill set and for firms to hire better‐qualified job candidates”14; 
“provide incentives for the affected firms to increase output, if they face an upward‐sloping supply curve”15; and 
“may increase market competition by reducing the markup of prices over marginal cost”16. In addition, improvement in transportation increase the accessibility of a community, which also benefits productivity growth. Existing Canadian economic studies on the impact of infrastructure investment on productivity include: 
Recent work17 by Statistics Canada finds that: 
On average, public infrastructure’s contribution has accounted for some 9% of the growth in labour productivity over the 1962‐2006 period; and 13
Gill, Vijay, et al., Connecting Jobs and People: Exploring the Wider Benefits of Urban Transportation Investments, the Conference Board of Canada, August 2011, Page 24. 14
Ibid. Page 24. 15
Ibid. Page 26. 16
Ibid. Page 26. 17
Gu, Wulong and MacDonald, Ryan, The Impact of Public Infrastructure on Canadian Multifactor Productivity Estimates, Statistics Canada, 2009. Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page 10 October 13, 2011 (DRAFT) 
The contribution of public capital to labour productivity growth was more pronounced in the 1960s and 1970s, and has stabilized in the years since (see Figure 2). Figure 2 Contribution of Public Infrastructure to Labour
Productivity Growth, 1962-2006
Percentage Points
0.5
0.4
0.4
0.3
0.3
0.2
0.2
0.1
0.1
0.1
1980-1988
1989-1999
2000-2006
0.1
0.0
1962-1966
1967-1973
1974-1979
Source: Altus Group Economic Consulting based on data from The Impact of
Public Infrastructure on Canadian Multifactor Productivity Estimates, Statistics
Canada, 2009 and The Urban Infrastructure Challenge in Canada: Making
Greater Use of Municipal Debt Options, Altus Group, 2011

A Statistics Canada study18 concludes that the marginal benefit of public infrastructure for Canadian business sector is about 0.17. That is, a $1.00 increase in the net public capital stock generates, on average, approximately 17 cents of ʹcost savingʹ producer benefits per year for the business sector. 
A recent study19 on the effect of public infrastructure investment policy on economic growth remarks that: 
Based on empirical evidence from Canada for the period 1955‐1999, the economic growth rate follows closely the rate of infrastructure formation, and private capital investment also follows the rate of infrastructure formation but adjusts with a delay; and 18
Harchaoui, Tarek M. and Tarkhani, Faouzi, Public Capital and its Contribution to the Productivity Performance of the Canadian Business Sector, Statistics Canada, 2003. 19
Kalyvitis, Sarantis, Public Investment Rules and Endogenous Growth with Empirical Evidence from Canada, The Scottish Journal of Political Economy, June 2002. Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page 11 October 13, 2011 (DRAFT) 
Public policy decisions on infrastructure investment have long‐term effects on the pace of the nation’s economic growth. The report recommends that governments adopt higher rates of infrastructure investment to boost economic growth. The Federal Reserve Bank of Chicago finds that in terms of productivity benefits, ʹcoreʹ urban infrastructure (streets, highways, airports, mass transit, sewers, water systems, etc.) has the greatest impact. 20 These types of infrastructure are closely related to community and population growth. Basic urban infrastructure plays a significant role in labour productivity growth in Canada. Investment in basic infrastructure aids the growth in long‐term labour productivity. The higher productivity growth, in turn, benefits all Canadians, since it boosts GDP and labour income. The economic benefits of infrastructure investment are thus, overwhelmingly community‐
wide. JOB CREATION Infrastructure investment directly generates higher economic activity and creates jobs. Strategic accelerated infrastructure investment by governments boosts economic growth and generates jobs both directly in construction and indirectly through a wide array of well‐documented “spin off” jobs. Canadian researchers find that: “infrastructure investment is a good candidate for stimulus, given a relatively large multiplier and low direct import content.”21 This is the rationale behind the Canada’s Economic Action Plan introduced by the Government of Canada during the 2009 recession. Like many provinces, the Province of Ontario also increased its spending on public infrastructure in recent years to help boost economic growth. The Conference Board of Canada estimates that: 
Each dollar of real public infrastructure spending adds $1.11 to Ontario’s real gross domestic product, as well as creates jobs, boosts personal incomes and corporate profits, and increases tax collection; 20
Aschauer, David A., Is Public Expenditure Productive? The Federal Reserve Bank of Chicago, March 1988. 21
McCracken, Michael C. and Sonnen, Carl A., Infrastructure and the Canadian Economy: The Macroeconomic Impacts, The Tenth John Deutsch Roundtable on Economic Policy Summary, Infrastructure and Competitiveness, June 1993, Page 150. Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page 12 October 13, 2011 (DRAFT) 
During the 2008‐09 recession, the Ontario Government boosted investment in public infrastructure. The extra boost to infrastructure spending is said to have lifted real GDP growth by some 0.9 percentage points in 2009; and 
Without the stimulus spending on infrastructure, Ontario’s economy would have lost an additional 70,000 jobs in 2009. 22 Metrolinx, an agency of the Government of Ontario, was created to improve the coordination and integration of all modes of transportation in the Greater Toronto and Hamilton Area. A Conference Board of Canada’s report23 on the impacts of the Metrolinx’s investment plan over the period 2009‐2020: 
The $19 billion planed infrastructure investment is expected to increase Ontario’s real GDP by a cumulative $22.7 billion over the period – each dollar of real capital investment in the regional transit program increases real GDP in the province by $1.19; 
The investment plan is estimated to create 279,133 person‐years of employment over the same period; and 
Federal and provincial governments will collect some $7.5 billion extra personal income taxes and indirect taxes, and a total $1.2 billion in corporate income taxes. The U.S. Department of the Treasury justified a boost in infrastructure investment as a countercyclical measure to combat the 2008‐2009 recession: 
A recent analysis by the Congressional Budget Office found that additional investment in infrastructure is among the most effective policy options for raising output and employment. 24 By accelerating investment in basic urban infrastructure, governments mitigated the negative shocks from the recent economic recession. These measures were beneficial across the whole community. 22
Antunes, Pedro; Beckman, Kip; and Johnson, Jacqueline, The Economic Impact of Public Infrastructure in Ontario, the Conference Board of Canada, 2010. 23
Gill, Vijay, et al., Connecting Jobs and People: Exploring the Wider Benefits of Urban Transportation Investments, the Conference Board of Canada, August 2011. 24
The U.S. Department of the Treasury with the Council of Economic Advisers, An Economic Analysis of Infrastructure Investment, October 2010. Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page 13 October 13, 2011 (DRAFT) VALUE OF TIME Traffic congestion costs billions of dollars to the Canadian economy each year, mainly due to shipping delays and lost productive hours. Investment in public transit and highways reduces congestion and saves billions of dollars for the economy. The principal economic and social costs of congestion are as follows as set out recently in an analysis of the Metrolinx regional transportation plan25: 
The costs of reduced economic output and accompanying job loss; 
The costs of travel delays for auto and transit users and the unreliability of trip times; 
The increased vehicle operating costs associated with higher traffic volumes; and 
The additional environmental costs of vehicle emissions and the higher frequency of accidents A recent Texas Transportation Institute study shows that the cost of congestion could be in the billions of dollars to the economy26: 
Americans in 439 urban areas spent some 4.2 billion hours sitting in traffic in 2007, equivalent to nearly one full work week for the average commuter; 
Congestion costs about $87.2 billion in total in the 439 urban areas. Canadian studies show similar results: 
Transport Canada shows that the aggregate annual congestion cost for Canada’s nine largest urban areas is $2.3 billion to $3.7 billion (in 2002 dollar values)27; 
TD Economics finds that the accrual of losses from congestion and shipping delays in the Greater Toronto Area is estimated to be $2 billion annually28; and 25
HDR Corporation, et al., Cost of Road Congestion in the Greater Toronto and Hamilton Area: Impact and Cost Benefit Analysis of the Metrolinx Draft Regional Transportation Plan, 2008. 26
The U.S. Department of the Treasury with the Council of Economic Advisers, An Economic Analysis of Infrastructure Investment, October 2010. 27
Brender, Natalie; Cappe, Marni and Golden, Anne, Mission Possible: Successful Canadian Cities, the Conference Board of Canada, 2007. 28
Ibid. Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page 14 October 13, 2011 (DRAFT) 
In 2006, the economic burden of congestion in the Greater Toronto and Hamilton Area was estimated to be $3.3 billion for commuters and $2.7 billion in lost opportunities for economic expansion. These economic, social and environmental costs will more than double (to $7.8 billion and $7.2 billion, respectfully) by 2031 if the congestion problem is not solved29. Traffic congestion is a burden to everyone in the community. For example, shoppers pay higher prices if shipping costs increase due to higher traffic volumes. Because congestion increases commute time and unproductive hours, it reduces economic output which has negative impacts across the whole community. Adequate investment in transportation infrastructure reduces traffic congestion and generates community‐wide benefits. ECONOMIC DEVELOPMENT Generally, there are two ways that basic urban infrastructure directly influence economic development in a region: 
Basic infrastructure is directly linked to a region’s productivity growth, which, in turn, boosts economic development; and 
Basic infrastructure plays an instrumental role in the competitiveness of a community and has an effect on the attractiveness of a community to business investment and talented migrant workers. In the emerging “knowledge‐based” economy, cities attract investment by providing an attractive, talented and diverse local labour force: 
Despite short‐term elevated unemployment due to the recent recession, Canada is emerging into a period of acute labour shortages and, in the future, the most valuable resource that a community can offer to firms is human capital; 
Progressively, the location decisions of creative people rather than those firms, will be critical source of local social and economic prosperity and security; 
These young talented workers are generally globally‐minded and, as a result, are more inclined to relocate in pursuit of an attractive 29
HDR Corporation, et al., Cost of Road Congestion in the Greater Toronto and Hamilton Area: Impact and Cost Benefit Analysis of the Metrolinx Draft Regional Transportation Plan, 2008. Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page 15 October 13, 2011 (DRAFT) lifestyle. At the same time, they also want a sense of belonging to a community; and 
For a city, the most effective means to attract talented and creative people is to build vibrant and attractive communities. 30 A New Zealand study shows, among other things, investment in public infrastructure positively affects population growth by helping a region attract in‐migration of workers. 31 “As cities develop and grow into knowledge‐based economies, linking people to other national and international centres of knowledge is becoming increasingly crucial.” 32 An integrated transportation system that links airports, highways and public transits together is fundamental to a community’s success in attracting businesses and skilled workers. Several empirical studies underscore the significance of infrastructure investment to a region’s economic development and growth: 
A World Bank study33 shows that the volume of total infrastructure stock in a community has a significant positive effect on long‐run economic growth ‐ an improvement of the aggregate infrastructure stock would significantly raise the economic growth rate of a country; 
The insufficient investment in public infrastructure could result in a loss of economic growth opportunity for Canada. According to a recent study released by a construction association in Ontario, the Canadian economy would likely shave 1.1 percentage points off its potential growth over the next 50 years, if the investment in public infrastructure stays at the average level over the last decade.34 Governments recognize the importance of basic urban infrastructure to a community’s economic development. Many major Canadian municipalities 30
Altus Group, Housing Affordability and Choice: Community Prosperity in the 21st Century, prepared for Canadian Home Builders’ Association, June 2008. 31
Cochrane, William, et al., The Spatial Impact of Local infrastructural Investment in New Zealand, 2010. 32
Brender, Natalie; Cappe, Marni and Golden, Anne, Mission Possible: Successful Canadian Cities, the Conference Board of Canada, 2007, Page 32. 33
Calderón, César and Servén, Luis, The Effects of Infrastructure Development on Growth and Income Distribution, World Bank, September 2004. 34
RiskAnalytica, Public Infrastructure Underinvestment: The Risk to Canada’s Economic Growth, an independent study commissioned by the Residential and Civil Construction Alliance of Ontario, July 2010. Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page 16 October 13, 2011 (DRAFT) acknowledge clearly the role of basic urban infrastructure investment in supporting economic development in their communities, including35: 
Toronto: The City states in its Office Plan that “This Plan will create a better urban environment, a competitive local economy and a more socially cohesive city by attracting more people and jobs to targeted growth areas in the City that are supported by good transit services and other infrastructure”; 
Mississauga: The City will foster a strong economy by “ensuring there is adequate infrastructure to support development”; 
Edmonton: One of the guiding principles of the City’s Infrastructure Strategy is “infrastructure assets are critical to economic development and quality of life”; and 
Vancouver: In the Metro Vancouver development strategy, the regional government believes that one of its roles is to “provide regional utility infrastructure to support the region’s economic functions…” Evidence shows that investment in basic urban infrastructure supports a community’s economic development and benefits all members of the community. OTHER ECONOMIC BENEFITS Investment in basic urban infrastructure generates other community‐wide economic benefits, including: 
Promoting Private Investment: 
Using Canadian statistics, James Brox finds that: Public infrastructure tends to substitute for private
investment in the short term, allowing companies to
allocate resources to other inputs. Over a longer time
frame, however, the productivity of private capital is
enhanced by infrastructure, which increases the number
of profitable investment projects36;
35
For more details, see Appendix A 36
Brox, James A., Infrastructure Investment: The Foundation of Canadian Competitiveness, IRPP Policy Matters, Vol. 9, NO. 2, August 2008, Page 4. Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page 17 October 13, 2011 (DRAFT) 
Research shows that every dollar of public capital results in a positive 0.45 dollar of private capital investment.37 
Improving the Functioning of Labour Markets: 
An adequate transportation system will improve the regional accessibility. “If improved accessibility leads to an increase in travel distances for the same travel time, then the range of choice for individuals (and firms) has increased. This allows for increasing specialisation in regional labour markets through a better match of skills supplied and demanded in these markets”38; 
“A sound public infrastructure system enables workers to move from inefficient production systems to systems that can exploit economies of scale, specialization, agglomeration, and trade”39; 
Investment in public infrastructure reduces transportation costs, partially due to reduction in congestion and fuel usage. The decline in transportation costs increases the accessibility of intra‐region travel. An international study concludes that “a 10% decrease in transportation costs can lead to an increase in demand of between 1.5% and 8%. Still, even a modest increase in the number of commuting trips suggests that labour supply has changed in some way.”40 This should improve the functioning of the labour market; and 
“To the extent that a new transportation project reduces travel costs and journey time, and improves reliability, it can increase the incentive to work and the range of jobs for which workers are prepared to travel. This increases in labour supply results in greater employment, output, and 37
Haynes, Kingsley E., Infrastructure: The Glue of Megacities, the Megacities Foundation and NICIS, November 2006. 38
OECD, Impact of Transport Infrastructure Investment on Regional Development, 2002, Page 36. 39
Antunes, Pedro; Beckman, Kip; and Johnson, Jacqueline, The Economic Impact of Public Infrastructure in Ontario, the Conference Board of Canada, 2010, Page 22. 40
Ibid. Page 24. Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page 18 October 13, 2011 (DRAFT) productivity because workers and jobs are matched more efficiently.”41 Investment in basic urban infrastructure promotes private investment and improves labour market functionality over the long‐term. Both benefits are community‐wide and have positive impacts on all residents in the community. 41
Gill, Vijay, et al., Connecting Jobs and People: Exploring the Wider Benefits of Urban Transportation Investments, the Conference Board of Canada, August 2011, Page 24. Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page 19 October 13, 2011 (DRAFT) 5
ENVIRONMENTAL BENEFITS OF BASIC URBAN INFRASTRUCTURE Basic urban infrastructure has significant environmental benefits that are overwhelmingly community‐wide. It helps mitigate air and water pollution and promote resource conservation. Community‐wide environmental benefits from basic urban infrastructure include: 
A well‐maintained water supply system promotes water conservation; 
Efficient basic infrastructure supports municipal solid waste management, which has significant impacts on the environment; 
Storm water capture and removal infrastructure mitigates the effects of large weather events on the community and can help recharge effectively local aquifers; and 
A well‐functioning transportation system mitigates traffic congestion, reducing automobile emissions and air pollution. WATER SUPPLY SYSTEM Leakage in water distribution systems is a well‐documented problem, which wastes both money and a natural resource. This problem is more severe for older systems: 
“The amount of water that is lost or unaccounted for is typically 20‐
30% of production. Some systems, especially older ones, may lose as much as 50%.”42; 
American Society of Civil Engineers estimates that “every day [in the United States], six billion gallons of clean, treated drinking water disappears, mostly due to old, leaky pipes and water mains. That’s enough water to serve the population of a state the size of California”43; and 42
Hunaidi, Osama, Detecting Leaks in Water‐Distribution Pipes, Institute for Research in Construction, National Research Council of Canada, 2000, Page 1. 43
The Water Strategy Expert Panel, Watertight: The Case for Change in Ontario’s Water and Wastewater Sector, a report for Ontario Ministry of Public Infrastructure Renewal, 2005, Page 7. Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page 20 October 13, 2011 (DRAFT) 
Improved water distribution systems with new technology could save billions of gallons of fresh water each year across Canada, greatly aiding the water conservation efforts. STORM WATER MANAGEMENT Storm water systems are designed to capture and store or remove excess rain and ground water from urban areas. If left poorly managed, storm water presents two main public hazards: 
Storm water causes flooding, property damage and personal safety hazards; and 
Storm water can carry toxins and other waste products, contaminating the water supply. The City of Mississauga’s Official Plan states that: The effective management of stormwater is vital in protecting life,
property, infrastructure and the natural environment. The safe
conveyance of storm flows, minimization of flood risks, enhancement
of water quality, reduction of erosion and improvement of natural
features and aquatic life and habitat will a priority.44
TRANSPORTATION Traffic congestion is a common problem in most major cities across Canada. Each year, traffic congestion not only costs billions of dollars to Canadian economy, it also negatively impacts the environment. The source of the negative environmental impact is from the increased automobile emissions. Traffic congestion increases the operating period of automobiles on the road and the stop‐and‐go driving conditions that leads to higher emissions: 
A study45 of 83 U.S. urban areas shows that in 2005, extra emissions attributable to traffic congestion amounted to: 
1.2 million tons of nitrogen oxide; 
34,000 tons of sulphur dioxide; and 
23,000 tons of fine particulate matter. 44
City of Mississauga, Mississauga Official Plan, September 2010, page 6‐19. 45
Levy, Jonathan I., et al., The Public Health Costs of Traffic Congestion: A health Risk Assessment, Harvard Centre for Risk Analysis, Harvard School of Public Health, 2010. Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page 21 October 13, 2011 (DRAFT) 
In the Los Angeles area, traffic congestion has a significant effect on CO2 emissions, and reducing stop‐and‐go traffic conditions could reduce emissions by up to 12%46; and 
A study on the costs of road congestion in the Greater Toronto and Hamilton Area (GTHA) concludes that the cost of vehicle emissions in the GTHA amounts to over $200 billion each year and by eliminating excess congestion in the region, this cost would be reduced by 15%47. Well‐maintained roads and better public transit system can lower traffic congestion that will reduce automobile emission and air pollution, mitigating the negative environmental impact. UTILITIES Upgrading old utility systems can significantly benefit the environment by improving efficiency of the system and allowing the adoption of more advanced technology that potentially promotes energy conservation and reduces reliance on sulphur‐producing forms of energy production.48 The positive effects of infrastructure investment on the environment are community‐wide. Better air and water quality is beneficial to everyone in the community. 46
Barth, Matthew and Boriboonsomsin, Kanok, Real‐World CO2 Impacts of Traffic Congestion, March 2008. 47
HDR Corporation, et al., Cost of Road Congestion in the Greater Toronto and Hamilton Area: Impact and Cost Benefit Analysis of the Metrolinx Draft Regional Transportation Plan, 2008. 48
Canadian Electricity Association, The Smart Grid: A Pragmatic Approach, December 2010. Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page 22 October 13, 2011 (DRAFT) 6
SOCIAL AND CULTURAL BENEFITS OF BASIC URBAN INFRASTRUCTURE Governments deliver a variety of social and cultural services and promote the social and cultural advancement of communities through an array of public amenities and facilities, such as parks, squares, community centres, parks, libraries, stadia, auditoria, etc. While these amenities and facilities are not themselves basic urban infrastructure, they depend critically on a community’s infrastructure to operate effectively. A well functioning grid of public amenities and facilities, with a solid foundation of urban infrastructure, provide an array of community‐wide benefits. Public capital creates social and cultural benefits to a community by providing venues for: 
Community social gatherings (e.g. community halls); 
Local sports activities (e.g. arenas) 
Art events (e.g. public theatres and libraries); and 
Public celebrations (e.g. public squares) City roads and pubic transit provide the access to these venues. Improvement in transportation infrastructure can reduce the commuting time for local residents and increase the geographical range over which amenities such as restaurants, theatre, opera, and museums are accessible to residents. Public capital also has some other social and cultural benefits, including: 
Helping the communities accommodate an aging population; 
Promoting regional agglomeration; and 
Supporting national security. ACCOMMODATING AN AGING POPULATION As Canada’s “baby‐boomers” continue to age, most communities will see a rising median population age, and a growing proportion of population over the age of 65. Effective and targeted investment in basic urban infrastructure helps to accommodate and better serve an aging population: Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page 23 October 13, 2011 (DRAFT) 
Infrastructure Canada notes: “The boomer generation of Canadians has higher expectations for mobility than any to precede it, often viewing access to the mobility that a license offers as a right. Quality of life for this population segment may be implicitly tied to mobility, the loss of which may be equated to a lower standard of living” 49; 
An OECD study notes that as baby‐boomers age, the demand for new or altered transportation infrastructure will increase, including safer roads for drivers, roadside environments for pedestrians, cyclists, and users of electric wheelchair/scooters, and more user‐friendly and accessible public transit systems;50 
A recent study on the impacts of the aging population by the Federal Reserve Bank of New York finds that other types of infrastructure, amenities and facilities, including water and wastewater systems, health facilities and social services, also should be altered so as to better accommodate the aging population. For example, disabled seniors are more likely to depend on publicly‐provided services and infrastructure, such as accessible transportation and special forms of housing.51 Investment in public capital including infrastructure can help the community to prepare better for the aging population. The benefits of the investment are community‐wide. PROMOTING REGIONAL AGGLOMERATION Agglomeration is beneficial to the region’s economic developments. Some economic benefits of agglomeration include52: 
Knowledge transfers and spillover due to greater interactions; 
Access to labour ‐ increased availability of specialized skills; 
Input effects ‐ provision of inputs in a more efficient manner; and 49
PricewaterhouseCoopers LLP, Population aging and public Infrastructure: a Literature Review of Impacts in Developed Countries, Infrastructure Canada, April 2008, Page 11. 50
OECD, Ageing and Transport: Mobility Needs and Safety Issues, 2001. 51
Deitz, Richard and Garcia, Ramon, The Demand for Local Services and Infrastructure Created by an Aging Population, the Federal Reserve Bank of New York, Upstate New York Regional Review, VOL. 2, NO.1, 2007. 52
Antunes, Pedro; Beckman, Kip; and Johnson, Jacqueline, The Economic Impact of Public Infrastructure in Ontario, the Conference Board of Canada, 2010, Page 25. Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page 24 October 13, 2011 (DRAFT) 
Consumption benefits – people living in dense areas with additional leisure opportunities, firms locate nearby so they can have access to skilled labour. Investment in basic urban infrastructure, especially the transportation infrastructure promotes regional agglomeration: 
Empirical work shows that an increase of 1 mile of primary highways per square kilometre is associated with a 66.2% increase in the likelihood of firms remaining in the region. A better highway system discourages business to re‐locate out of the region and increase the potential for agglomeration economies;53 and 
Investment in transportation infrastructure helps to form a regional transportation agglomeration, which in terms, generates additional economic benefits. For example, in Chicago, transportation agglomeration has led to greater business clustering and economic growth, according to the U.S. Department of Treasury.54 The benefits of agglomeration are community‐wide. SUPPORTING SECURITY Basic urban infrastructure is also an important foundation to a community’s safety and security system. Functional road and communications networks, proper street lighting and signalling and other elements of a community’s infrastructure grid support the work of the police and other emergency services. At the provincial and national levels, well‐maintained basic infrastructure helps to support the work of the national defence forces, anti‐terrorism programs and other public safety and security undertakings. A well‐functioning, well‐maintained and adequate infrastructure grid is essential for supporting the local and national security, which is a community‐wide benefit. 53
Ibid. Page 27. 54
The U.S. Department of the Treasury with the Council of Economic Advisers, An Economic Analysis of Infrastructure Investment, October 2010. Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page 25 Appendix A October 13, 2011 (DRAFT) DEVELOPMENT POLICIES ON BASIC URBAN INFRASTRUCTURE Municipalities recognize the importance of basic urban infrastructure to a city’s social and economic development. Many of Canada’s major municipalities have infrastructure development plans or incorporate infrastructure planning in their official strategies. This chapter cites development policies related to basic urban infrastructure in six major municipalities in Canada and the language that focuses on the effects of infrastructure investment on community‐wide economic and social development. TORONTO The City’s Official Plan makes several references on the importance of public infrastructure to the community’s economic and social development. For example, in Chapter 2, Shaping the City: 
Under 2.2 ‐ Structuring Growth in the City: Integrating Land Use and Transportation, the Plan introduces several policies related to public infrastructure investment: 1. This Plan will create a better urban environment, a competitive local
economy and a more socially cohesive city by attracting more people
and jobs to targeted growth areas in the City that are supported by good
transit services and other infrastructure (Page 2-5).
4. The City’s water, wastewater and stormwater management
infrastructure will be maintained and developed to support the citybuilding objectives of this Plan by:
a) providing adequate facilities to support new development
and maintaining the infrastructure in a state of good repair
(Page 2-6).

Under 2.2.1 Downtown: The Heart of Toronto, the Plan states that 3. The quality of the Downtown will be improved by:
a) developing programs and activities to maintain and upgrade
public amenities and infrastructure (Page 2-10)

Under 2.2.4 Employment Districts: Supporting Business and Employment Growth, the Plan states: Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page A‐2 October 13, 2011 (DRAFT) 2. Employment Districts will be enhanced to ensure they are attractive
and function well, through actions such as:
b) investing in key infrastructure, or facilitating investment
through special tools, programs or partnerships, in order to:
i) revitalize employment districts which maybe
experiencing decline because of vacancies and
closures, absence of key physical infrastructure, poor
accessibility, or poor environmental conditions;
iv) create comfortable streets, parks and open spaces
for workers and landscaped streetscapes to attract
new business ventures (Page 2-20).
In addition, in Chapter 5, Implementation: Making Things Happen: 
Under 5.3.3 Strategic Reinvestment, the Plan states that: 1. Ensuring the health and safety of the public and maintaining City
infrastructure and assets in a state of good repair are municipal
investment priorities.
MISSISSAUGA The City outlines the vision for Mississauga in its Official Plan as a beautiful sustainable city that protects its natural and cultural heritage
resources, particularly the Lake Ontario waterfront, Credit River and
other valley corridors, and its established, stable neighbourhoods (Page
4-1).
To achieve this vision, the Plan is based on eight Guiding Principles and implements these through the various strategic actions. Some of the strategic actions related to public infrastructure include: 

Mississauga will build a desirable urban form by: 
ensuring that the urban form of the city (e.g., buildings,
streets, streetscapes landscapes, public spaces such as parks
and squares, infrastructure) contributes positively to everyday
living in Mississauga;

using placemaking initiatives to support active living and
improved public health, comfort and social interaction in the
city (Page 4-10).
Mississauga will foster a strong economy by: Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page A‐3 October 13, 2011 (DRAFT) 
ensuring there is adequate infrastructure to support
development;

attracting post-secondary educational facilities to stimulate
investment and the development of talent to meet the needs of
future employment opportunities (Page 4-11).
In Chapter 6, Value the Environment, Plan states that: The effective management of stormwater is vital in protecting life,
property, infrastructure and the natural environment. The safe
conveyance of storm flows, minimization of flood risks, enhancement
of water quality, reduction of erosion and improvement of natural
features and aquatic life and habitat will a priority.
OTTAWA In A Window on Ottawa 20/20: Ottawaʹs Growth Management Strategy, an overview of the City’s long‐term strategy, the City states that one of its goals is to create “A Healthy and Active City” and one of the policy tools to achieve this goal is: Build and maintain infrastructure – Water treatment and distribution
and sanitary wastewater collection and treatment services are important
to the health of both the community and the environment. The City will
carefully predict and monitor the impacts of population and
employment growth on infrastructure and the environment in order to
ensure that infrastructure is properly maintained and expanded on time
to support growth. New infrastructure will be provided in a way that
reinforces the City’s commitment to compact development and building
safe and healthy urban and rural communities (Page 18)
This illustrates that the City believes public infrastructure investment is beneficial to the City’s health and environment, and instrumental to the economic and social development of the community. These benefits will be felt by everyone in the city, not limited to certain individuals. CALGARY The City’s Capital Plan for the 2010‐2014 period states its goals as: Basic Urban Infrastructure and Its Community‐Wide Benefits 
Expand the transportation system to facilitate the movement of
goods and people.

Increase community safety.

Enhance Calgary’s neighbourhoods through community
development.
Altus Group Economic Consulting Page A‐4 October 13, 2011 (DRAFT) 
Protect the environment and public health.

Support the delivery of municipal services and programs
through safe, reliable infrastructure (Calgary Capital Plan’s
Website).
The Plan has five priority areas, including: 
Community Safety; 
Community Development; 
Mobility; 
Environmental Sustainability; and 
Municipal Sustainability and Affordable Housing. Capital initiatives that are linked to Community Development focus on: 
Building and maintaining great public spaces and places parks, gardens, playgrounds, pathways – that enrich lives.

New recreational and sport facilities to address growth in
demand and support community well-being.

Collaboration with partners involved in community
infrastructure and assets that promote an attractive, livable city
such as recreation facilities, arts, libraries and cultural
facilities.

Lifecycle maintenance, upgrades and improvements to
community parks, sports fields, golf courses and recreation
facilities (Calgary Capital Plan’s Website).
The priorities for infrastructure projects that are related to the Mobility include: Basic Urban Infrastructure and Its Community‐Wide Benefits 
Building transportation infrastructure to minimize traffic
congestion, support business and tourism, and promote viable
mobility choices.

Building strategic transportation infrastructure – West LRT,
NE and NW LRT extensions, road widening, interchanges and
bridges.

Increasing the supply of safe, secure and well-maintained
public transit–park‘ n ride facilities, buses, light rail vehicles,
buildings and stations.

Implementing strategic investments and maintaining facilities
for pedestrians and bicycles (Calgary Capital Plan’s Website).
Altus Group Economic Consulting Page A‐5 October 13, 2011 (DRAFT) These public infrastructure projects will benefit the whole community and promote economic and social development in Calgary. EDMONTON In Edmonton City Council’s Infrastructure Strategy – Building the Capital City from the Infrastructure Up, the City defines “Infrastructure” as “the physical assets developed and used by a municipal to support its social and economic activities” (Page 15) The Council’s Vision for the Plan: Sustainable infrastructure, maintained through sound financial policies
and asset management practices, will contribute to the vibrancy of the
City’s economy; the vitality of its neighbourhoods; safety of its
citizens; protection of the environment; and its capacity to
accommodate growth (Page 10).
Some of the Guiding Principles of the Plan include: 2. Infrastructure assets are critical to economic development and
quality of life.
3. Infrastructure programs should support the values and objectives
contained in plans and priorities approved by the City Council.
6. Infrastructure asset management will help the City to balance
renewal, upgrading and expansion programs (Page 10).
Given that sound infrastructure is essential to support any community’s goals for growth, economic development, and public safety, our ability to build and properly maintain our infrastructure is essential to ensure Edmonton remains an attractive and cost‐effective place to live and do business (Page 9). VANCOUVER The recently adopted regional growth strategy, Metro Vancouver 2040: Shaping Our Future, describes the regional vision, goals, strategies and actions. Some of strategies that are directly connected to public infrastructure investment are: 
To achieve Goal 2 ‐ Support a Sustainable Economy: Metro Vancouver’s role is to:
Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page A‐6 October 13, 2011 (DRAFT) 
Strategy 2.1.1 Provide regional utility infrastructure to support
the region’s economic functions and to support efficient
employment and settlement patterns (Page 26).
Actions Requested of Other Governments and Agencies:


Strategy 2.1.5 That Translink, the federal government and the
province and their agencies develop and operate transportation
infrastructure to support economic activity in Urban Centres,
Frequent Transit Development Areas, Industrial, Mixed
Employment areas and ports and airports (Page 26).
To achieve Goal 3 ‐ Protect the Environment and Respond to Climate Change Impacts: Strategy 3.3: Encourage land use and transportation infrastructure that
reduce energy consumption and greenhouse gas emissions, and
improve air quality (Page 40).
Strategy 3.4: Encourage land use and transportation infrastructure that
improve the ability to withstand climate change impacts and natural
hazard risks (Page 42).
Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page A‐7 Appendix B October 13, 2011 (DRAFT) RECENT INCIDENTS INVOLVED WITH INFRASTRUCTURE FAILURE The collapse of a portion of the de la Concorde overpass in Quebec: 
The incident, happened in Laval, killed five people and wounded six others; 
The Commission of inquiry into the incident concludes that the primary physical causes of the collapse include55: 
Design: The detail of the steel rebar on the upper part near the end of the cantilever could not prevent the propagation of the cracking plane; 
Construction: The misplacement of the steel rebar in the upper part of the cantilever end created a weak area which helped speed up the propagation of cracking plane; and 
Materials: The concrete used did not have the properties to withstand freeze‐thaw cycles in the presence of de‐icing salts, which also contributed to the propagation of cracking plane; 
Other secondary factors such as a inadequate inspection and maintenance program, and failure to fulfill obligations and to comply with procedures by various parties, also contribute to the collapse; and 
The Commission believes that rehabilitating the province’s aging infrastructure is instrumental to public health and safety. The Walkerton drinking water crisis in Ontario: 
In May 2000, Walkerton’s drinking water system became contaminated with deadly bacteria, primarily Escherichia coli O157:H7.1 Seven people died, and more than 2,300 became ill56; 
The report from Dennis R. O’Connor, the Commissioner of the inquiry, finds that the outbreak would have been prevented by the 55
Government of Quebec, Commission of Inquiry into the Collapse of a Portion of the de la Concorde Overpass, Report, October 2007. 56
O’Connor, Dennis R., Report of the Walkerton Inquiry: The Events of May 2000 and Related Issues, Part One – A Summary, 2002 Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page B‐1 October 13, 2011 (DRAFT) use of continuous chlorine residual and turbidity monitors at Well 5, which is the source of the contamination; 
The monitors would have included an alarm and an automatic shut‐
off mechanism. The purpose of installing continuous monitors is to prevent contamination from entering the distribution system at the first place. 
The Commissioner believes that an upgrade to the existing water system could prevent the tragedy. 
The failure from provincial regulators, utility operators and other organizations also caused the tragedy. To better manage the Canadian freshwater system, including ensuring the quality of drinking water, the Parliamentary Information and Research Service conducts a series of research. In the report57, it suggests that: 
One solution to prevent or reduce contamination of drinking water is to adopt a multi‐barrier approach, which focuses on three elements: 

Source water protection; 
Drinking water treatment; and 
Drinking water distribution systems. The second and third elements include the design, construction and operation of drinking water supply infrastructure that are designed to optimize all aspects of these processes and maintain the quality of the water throughout the distribution system. 57
Cote, Francois, Freshwater Management in Canada: III. Issues and Challenges, the Parliamentary Information and Research Service of the Library of Parliament, January 2005. Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page B‐2 Appendix C October 13, 2011 (DRAFT) BIBLIOGRAPHY Core Literature Altus Group, The Urban Infrastructure Challenge in Canada: Making Greater Use of Municipal Debt Options, prepared for Canadian Home Builders’ Association, January 2011 ‐‐‐‐‐‐‐‐‐‐‐‐‐, Gap and Statistical Analysis on Housing Sprinkler Systems, prepared for National Research Council of Canada, December 2010 ‐‐‐‐‐‐‐‐‐‐‐‐, Housing Affordability and Choice: Community Prosperity in the 21st Century, prepared for Canadian Home Builders’ Association, June 2008 Antunes, Pedro; Beckman, Kip; and Johnson, Jacqueline, The Economic Impact of Public Infrastructure in Ontario, the Conference Board of Canada, 2010 Aschauer, David A., Why Is Infrastructure Important? published in Is there a Shortfall in Public Capital Investment, proceedings of a conference held in June 1990, sponsored by Federal Reserve Bank of Boston ‐‐‐‐‐‐‐‐‐‐‐‐, Is Public Expenditure Productive? The Federal Reserve Bank of Chicago, September 1988 Asian Development Bank, A Study on Ways to Support Poverty Reduction Projects, October 2000 Baldwin, John R. and Dixon, Jay, Infrastructure Capital: What Is It? Where Is It? How Much of It Is There? The Canadian Productivity Review, Statistics Canada, March 2008 Barth, Matthew and Boriboonsomsin, Kanok, Real‐World CO2 Impacts of Traffic Congestion, March 2008 Brender, Natalie; Cappe, Marni and Golden, Anne, Mission Possible: Successful Canadian Cities, the Conference Board of Canada, 2007 Brox, James A., Infrastructure Investment: The Foundation of Canadian Competitiveness, IRPP Policy Matters, Vol. 9, NO. 2, August 2008 Calderón, César and Servén, Luis, The Effects of Infrastructure Development on Growth and Income Distribution, World Bank, September 2004 Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page C‐1 October 13, 2011 (DRAFT) Canadian Electricity Association, The Smart Grid: A Pragmatic Approach, December 2010 Cochrane, William, et al., The Spatial Impact of Local infrastructural Investment in New Zealand, 2010 Cote, Francois, Freshwater Management in Canada: III. Issues and Challenges, the Parliamentary Information and Research Service of the Library of Parliament, January 2005 Deitz, Richard and Garcia, Ramon, The Demand for Local Services and Infrastructure Created by an Aging Population, the Federal Reserve Bank of New York, Upstate New York Regional Review, VOL. 2, NO. 1, 2007 Gill, Vijay, et al., Connecting Jobs and People: Exploring the Wider Benefits of Urban Transportation Investments, the Conference Board of Canada, August 2011 Gu, Wulong and MacDonald, Ryan, The Impact of Public Infrastructure on Canadian Multifactor Productivity Estimates, the Canadian Productivity Review, Statistics Canada, 2009 Government of Quebec, Commission of Inquiry into the Collapse of a Portion of the de la Concorde Overpass, Report, October 2007 Hanson, Royce (Editor), Perspectives on Urban Infrastructure, Committee on National Urban Policy, National Academy Press, Washington D.C. 1984 Harchaoui, Tarek M. and Tarkhani, Faouzi, Public Capital and its Contribution to the Productivity Performance of the Canadian Business Sector, Statistics Canada, 2003 Haynes, Kingsley E., Infrastructure: The Glue of Megacities, the Megacities Foundation and NICIS, November 2006 HDR Corporation, et al., Cost of Road Congestion in the Greater Toronto and Hamilton Area: Impact and Cost Benefit Analysis of the Metrolinx Draft Regional Transportation Plan, 2008 Hennessy, Dwight A., et al., The Influence of Traffic Congestion, Daily Hassles, and Trait Stress Susceptibility on State Driver Stress: An Interactive Perspective, The Journal of Applied Biobehavioral Research, 2000, pp.162‐179 Hunaidi, Osama, Detecting Leaks in Water‐Distribution Pipes, Institute for Research in Construction, National Research Council of Canada, 2000 Basic Urban Infrastructure and Its Community‐Wide Benefits Altus Group Economic Consulting Page C‐2 October 13, 2011 (DRAFT) Kalyvitis, Sarantis, Public Investment Rules and Endogenous Growth with Empirical Evidence from Canada, The Scottish Journal of Political Economy, June 2002 Levy, Jonathan I., et al., The Public Health Costs of Traffic Congestion: A Health Risk Assessment, Harvard Centre for Risk Analysis, Harvard School of Public Health, 2010 McCracken, Michael C. and Sonnen, Carl A., Infrastructure and the Canadian Economy: The Macroeconomic Impacts, The Tenth John Deutsch Roundtable on Economic Policy Summary, Infrastructure and Competitiveness, June 1993 MMM Group, Ontario’s Bridges Bridging the Gap, prepared for Residential and Civil construction Alliance of Ontario, November 2007 O’Connor, Dennis R., Report of the Walkerton Inquiry: The Events of May 2000 and Related Issues, Part One – A Summary, 2002 OECD, Impact of Transport Infrastructure Investment on Regional Development, 2002 OECD, Ageing and Transport: Mobility Needs and Safety Issues, 2001 Pradhan, Rudra Prakash, Does Infrastructure Play Role in Urbanization: Evidence from India, Indian Journal of Economics and Business, June 2007 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