The Economic Impact of Ontario’s Infrastructure Investment Program

This briefing follows and updates an earlier study to assess the contribution of Ontario’s infrastructure investment program to the province’s economy. Using data provided by the Ontario Ministry of Infrastructure over the 2006 to 2014 period, we look at the economic impacts associated with the direct employment and purchases generated by public infrastructure spending. In addition, we quantify the benefits of the same infrastructure spending on the province’s potential output and the income of its residents. We assess only the benefits of Ontario’s past and planned infrastructure spending on the economy.

Our findings suggest that the direct employment and purchases generated by public infrastructure spending have substantial impacts on the economy; and that there is a robust link between the stock of public infrastructure and income level. More importantly, a high degree of interdependence exists between the quality and quantity of public infrastructure and the performance of an economy’s business sector.