I am driving my car. I turn right… congestion. Road repairs – one lane closed. No problem, I know a detour. Turning left… jammed again. Bridge repair – two lanes closed. Now, I’m starting to get cranky. Then a road sign makes it all better: the $12 million to fix the bridge will “stimulate the economy.” And create 32.6 jobs!
Only problem: it’s not true.
Whether you’re driving in Montreal, Toronto or Vancouver, it’s the same. Construction sites ravage the streets. This year alone, governments will spend almost $10 billion in infrastructure stimulus funding – about $550 per Canadian taxpayer. To “save” us from an economic crisis that, according to most “experts,” is over (or hasn’t begun yet here).
True, in parts of the country bridges are cracking and roads are filled with potholes. When we need to wear hockey helmets and elbow pads to drive to work, these collective investments make sense. But stop saying it will boost the economy.
How could these projects absorb the coming masses of unemployed? A former McDonald’s manager cannot turn into a cement layer overnight. What if most of the laid-off workers come from the service sector? Will a former accountant go level the roadbed of the QEW in Ontario? I hope not.
Also, there is no such thing as a free lunch. Every dollar the government spends must be taken from your pockets at some point. If a bridge costs a million dollars, you and I have a million less to spend (for buying a bike or a car, eating at a restaurant, etc.). Every job created by the new bridge destroys another job elsewhere in the economy.
Truth is: instead of regularly investing in bridge and road maintenance, our governments chose over the years to spend the money elsewhere. After all, giving a juicy subsidy to a noisy interest group buys you more votes than paving a section of road in Nowheresville.
The result of this neglect: This summer, the country will be overrun by construction sites.
In addition to angering motorists, this supposed “stimulus plan” runs the risk of overheating the construction industry. Contractors are already busy. If we triple the number of project tenders, contractors may well decide to raise their prices when bidding for them. Will taxpayers get enough bang for their “stimulus” bucks?
We all want nice roads and bridges. But stop taking people for idiots. A bridge is not a recovery plan. It’s a bridge.
David Descôteaux is a Researcher at the Montreal Economic Institute.