Infrastructure Update: Investments in Territories

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The Invest in Canada Plan (IICP) is the 12-year, $188 billion, infrastructure investment plan introduced in 2016 by the Government of Canada. The IICP is being delivered in two phases between 2016-17 and 2027-28: Phase 1 for short-term infrastructure needs during the first two years, and Phase 2 starting in 2018-19 for longer-term investments.

Federal infrastructure investments require cost sharing with other levels of government, such as provinces, territories, and local governments. These levels of government are therefore key actors of the IICP, especially since they own and maintain the majority of public infrastructure.

On March 13, 2019, the PBO published a report entitled “Infrastructure Update: Investments in provinces and municipalities” to identify the incremental impact of the IICP on provincial and municipal capital spending in 2016- 17 and 2017-18.  As a supplement to that report, this note examines capital investments in the Northwest Territories, Nunavut and Yukon with the same objective of identifying the incremental impact of the IICP on their capital spending over the same period.

Consistent with our findings for provinces, we estimate that not only territories did not spend according to their plans prior to the introduction of the IICP, some of them have also revised their planned capital spending downwards (Northwest Territories and Nunavut) after the start of IICP.

Based on PBO’s calculations, the level of capital spending in the territories was $111 million lower in 2016-17 and 2017-18 than what it would have been in the absence of IICP.

Similar to provinces, territories also decreased their own contribution to capital spending relative to the federal government’s funding for infrastructure. On average, for each dollar of federal contribution received in 2017-18, territories spent $3.7 on capital, down from $6.0 in 2015-16.

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