TABLE OF CONTENTS Nov 2012 - 0 comments

Grading modern times

The Canadian Infrastructure Report, reflecting input received from 123 municipalities across the country, has given some types of infrastructure high grades. Other systems, however, might benefit from a few more lessons.

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By: Gregor Robinson, Senior Vice President, Policy and Chief Economist, Insurance Bureau of Canada
2012-11-02

The importance of investing in modern infrastructure has become synonymous with Canada's economic competitiveness and quality of life. Grading that infrastructure can serve as a guide to renewal, both for individuals and for countries.

At least that is the hope behind the first Canadian Infrastructure Report card, a joint project of the Canadian Construction Association, the Canadian Public Works Association, the Canadian Society for Civil Engineering, and the Federation of Canadian Municipalities (FCM). Released in September, the report provides data from a survey of 123 municipalities where 60% of the Canadian population lives.

Examining municipal roads and the systems to manage drinking water, wastewater and stormwater, the report assigns grades ranging from "very good" to "very poor"; it does not offer recommendations for action or forecast capital needs.

The overall conclusion for key categories is as follows: drinking water, good; wastewater collection, good; stormwater management, very good; and municipal roads, fair.

There are, however, qualifications to the assigned ratings. IBC particularly notes that while responding municipalities ranked stormwater management as very good overall, the category had a low number of responses. Of the 123 municipalities surveyed, only 68 provided input. Of those respondents, many do not have formalized asset management systems in place that allow them to track the condition of their stormwater system assets.

FACTS AND FIGURES

The report card provides information on a number of factors, including the physical condition of the infrastructure, available capacity, value of the infrastructure systems, and types of management systems that are used to collect information and make infrastructure investment decisions.

"The total value of Canada's municipal water, wastewater and stormwater, and road systems is approximately $538 billion, $50.7 billion of which was identified as being in poor or very poor condition. A further $121.1 billion worth of infrastructure is in fair condition," notes the report card. "The total value of infrastructure in a fair or worse state equates to approximately $13,000 per Canadian household."

Canada's stormwater asset management systems are the best of the infrastructure classes covered in the report card, generally rated as "very good." That said, the report adds that 12.5% of stormwater installations surveyed fall below "good" condition, with this figure rising to 23.4% for stormwater pipes.

The replacement cost for the stormwater infrastructure in "fair" to "very poor" condition is $15.8 billion, or $1,270 per Canadian household.

During the financial crisis, the report states, the country's governments worked together to use stimulus funds to develop local infrastructure and create jobs. However, the $33-billion Building Canada Plan is scheduled to expire in 2014. Infrastructure Canada is currently engaging provinces, territories, the FCM and other stakeholders to shape the development of a new long-term infrastructure plan.

Consider the following statistics from the report card: 50% of Toronto's sanitary sewer system is more than 50 years old; 50% of Toronto's watermains are over 55 years old; and 27% of Ottawa's piped infrastructure is 40-plus years of age, with 50% being between 20 and 40 years old.

ISSUES OF CONCERN

Having completed its review of the report, IBC is concerned about the state of infrastructure within communities and their resiliency to accommodate the continuing increase in the incidence of severe weather. The bureau is principally concerned with the following questions: Is the infrastructure now in place - and the infrastructure in the process of being built - going to be able to handle severe weather in the future? Research commissioned by IBC, Telling the Weather Story by Dr. Gordon McBean, released in June 2012, indicates that that future could see what until now have been very severe, 1-in-20-year storms happening every 10 years in some regions.

Are particular types of infrastructure of more concern than others? Based on 2012 estimates, Canada's insurance industry pays $1.7 billion a year in claims resulting from water damage. This includes frequent sewer back-ups, when intense rainstorms compromise aging municipal sanitary and storm sewers become overloaded.

TOOLS TO PRIORITIZE

The industry will soon be offering municipalities a municipal risk assessment tool (MRAT), scheduled for implementation in 2013. MRAT will help municipalities identify where weaknesses exist, assisting in prioritizing infrastructure investments in areas where infrastructure is more vulnerable to failure.

MRAT seeks to benefit municipalities by doing the following:

• Increase awareness of infrastructure deficiencies: Identifying a city's problem areas (in the form of a map) can help municipalities communicate the importance of improving vulnerable infrastructure.

• Offer access to updated local rainfall return period statistics: As the tool validation process proceeds, updated statistics will be made available to municipalities, which will essential for ongoing municipal infrastructure planning.

• Provide information about future climate patterns: Given the long life expectancy of buried infrastructure, municipalities need to understand projected future climate patterns to make efficient and effective long-term investment plans.

• Help prioritize infrastructure investments: The federal and provincial governments are interested in supporting investments in areas where infrastructure is more vulnerable to failure. MRAT can help municipalities identify vulnerabilities and, in turn, support municipality presentations to governments to procure funding.

IBC expects to provide a submission to the federal government this fall as it holds consultations on infrastructure renewal.

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Gregor Robinson, Senior Vice President, Policy and Chief Economist, Insurance Bureau of Canada
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