infraNote

Federation of Canadian Municipalities president Gord Steeves has stated "Canada has used up 79 per cent of the service life of its roads, sewage systems and other vital components of the country's backbone, and municipalities simply can't afford to fix the problem on their own."

Regardless of the percentage, it has become apparent that there is a global infrastructure crisis that must be addressed.

the Need for Infrastructure Management

In 2002, the Canadian Institute of Chartered Accountants (CICA) published a research report that promotes the need for a clear and consistent framework for infrastructure planning and investment. As a first step in implementing the CICA recommendations, in 2006 June the Public Sector Accounting Board approved significant changes to PS3150 that establishes standards for accounting and reporting tangible capital assets - effective January 1, 2009.

Moving toward compliance with PS3150 has triggered awareness across Canada of how fragmented and incomplete our historical management of the Canadian infrastructure has been. As an example, some of the more obvious identifiable issues are:

  • There is no standard template, set of definitions, amortization periods, or procedures dealing with infrastructure asset management across Canada. Results for different communities will be difficult to compare if based on different definitions and assumptions for standards and terms
  • Over or understating service life can substantially change the amount of revenue required to cover costs
  • Depreciation accounting can understate funding requirements for infrastructure replacement
  • PS 3150 deals with existing infrastructure; funding requirements for infrastructure expansion and upgrading, which can be substantial, need to be identified separately
  • It appears that Governments can offset the cost of depreciation by reducing "equity" on the balance sheet. As a result, it seems that Governments can comply with PS3150 without having to provide additional funding to address the backlog.
  • Asset management is one component of infrastructure management, and does not provide a sustainable solution to the infrastructure crisis.

What Canada Needs

To fully address the state of Canadian Infrastructure, we need a comprehensive process for sustainable infrastructure planning as recommended by CICA in 2002. The Federal, Provincial and Local governments have already taken substantive steps to address this gap. As well, many professional organizations recognize the importance of infrastructure asset management and are providing seminars and conferences to talk about "best practices" in asset management.

However, asset management is not infrastructure management, but a component of it. A sustainable infrastructure plan includes asset management planning, but also requires a financial plan, a service delivery plan, and integration with community planning as well as social, and environmental outcomes desired by the community.

Governments at all levels need to coordinate and focus these efforts based on decades rather than budget cycles. More needs to be done to "institutionalize" good management at all levels and to address organizational and educational constraints. Managers need effective tools. While a good start, practice assessments available through the InfraGuide are somewhat general and represent a "snapshot" of the industry at the time of the review. Software and other tools are commonly available for specific topics and applications, but there is no comprehensive, integrated toolkit and education process for infrastructure management in Canada.

Practical "how to" manuals and related tools are urgently required to provide a sound basis for implementing InfraGuide recommendations. An active process is also required to train users, to support the tools and to keep the tools and education programs up to date.

Last, managers and practitioners need ready access to current knowledge and innovation through peer to peer communications, literature and literature reviews, and research relating to continuous improvement.

It is our belief that Government funding should only be provided in response to a sustainable long-term strategy that clearly demonstrates the need for additional funding. This strategy, or Sustainable Infrastructure Plan, must be based on infrastructure management best practices and a coherent, integrated examination of technical, financial, social and environmental issues in relation to community planning and resource management.