Investments will help Canada ride out current uncertain economic environment
Canada’s era of nation-building through transformational infrastructure investments is far from over as planned megaprojects will unlock resource wealth, secure new markets for Canadian energy and create a million new jobs, the Hon. Jim Prentice, CIBC Senior Executive Vice-President and Vice Chairman, said today.
“No other nation is leading energy projects at our pace and scale,” Mr. Prentice said in a speech to the Atlantic Provinces Economic Council. “And in an economic climate where the world debates how much public money to borrow to create stimulus jobs, Canada stands alone in terms of its potential to chart a different course.”
“The economic potential of these projects, the job creating power of these projects, led for the most part by the private sector, is immense.”
Mr. Prentice cited a CIBC Economics report released today entitled “Energizing Infrastructure” that concluded approximately $295 billion would be invested over the next 20 years to accommodate both electricity replacement needs and future expansion plans.
“For every $1 billion investment in the electricity sector, CIBC economists estimate close to 1,100 jobs will be created, for a grand total of more than 320,000 jobs building electricity infrastructure over the next two decades,” he said.
“And if you include oil sands-related infrastructure projects, we are talking about a million new jobs over 20 years.”
Mr. Prentice said significant initiatives in development or planning included the Keystone XL and Northern Gateway pipelines in the West, the Conapwa hydro project in Manitoba, Site C project on the Peace River in BC, the Romaine project and the Petit-Mécatina complex in Quebec, the Mackenzie Valley pipeline in the North and the Lower Churchill Hydroelectric Project in Newfoundland and Labrador.
“It is truly an impressive list.”
Lower Churchill alone represents one of the country’s largest energy infrastructure projects in its history, he said.
“It is a transformational project for Atlantic Canada that will take the region and the country to a new level of industrial development,” Mr. Prentice said. “It is also a major milestone in Canada’s efforts to wean itself from power generation that burns coal or oil, and to produce clean energy for export. With 59 per cent of our electricity now coming from hydro, the goal of making Canada the world’s cleanest electricity producer is eminently achievable. Lower Churchill will move us further and faster towards this goal.”
Mr. Prentice noted that the global economy is once again on shaky ground as many countries grapple with excessive debt loads and nervous financial markets. There are also calls for a moratorium on efforts to curb public debt and for a return to short-term stimulus spending.
“But I ask you this. Why should we borrow money from our grandchildren to create temporary jobs when we can harness private sector capital – without adding to deficit spending or public debt – to create permanent jobs and long-term prosperity?” he said.
“These projects will create over one million jobs when they are most needed, green up the North American electricity system, build a network of pipelines and ports that will diversify our oil and gas markets beyond the United States, and improve our ability to add value to our energy exports.”
Governments for their part should be supportive of these projects with innovative public policy tools, he said. The federal government’s loan guarantee is a wise instrument of industrial policy to reduce the cost of projects without significant effect on current deficits.
Governments must also continue to work on the diplomatic front to advance our energy relationships with key countries like the U.S. and China and continue to expedite the regulatory and environmental approval processes for megaprojects.
“No other industrial democracy in the world has such an opportunity,” Mr. Prentice said. “If we are smart about this, we can build out our country, create jobs and still maintain one of the lowest debt-to-GDP ratios in the world. We don’t need short-term stimulus spending, we need support for economic infrastructure that creates wealth.”
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