Tapped Out: Efficiency Options for Closing the Municipal Infrastructure Gap

Due, in part, to a prolonged period of underinvestment, Canada is faced with an “infrastructure gap.” Recent infrastructure funding increases have started to address this issue. However, increased public funding alone cannot address the entire gap. The reason for this is that competition for public funding has stretched the public purse to such an extent that the whole gap cannot be eliminated. As a result, other methods of reducing the infrastructure gap—such as through enhancing the productivity of infrastructure services and managing demand through pricing mechanisms—are required. This report examines the productivity and pricing practices of four infrastructure services in Canada: rail freight, urban transit, natural gas distribution, and water and wastewater services. The report also examines changes that have helped increase the efficiency of certain infrastructure services. And, it explores how the changes could apply to those services faced with declining productivity and large infrastructure gaps.