Canada could pull ahead maintenance spending to boost stimulus
By David Ljunggren
OTTAWA (Reuters) - The Canadian government could pull forward maintenance on essential infrastructure in a bid to provide more rapid support for an economy hit by slumping oil prices, a top official said on Thursday.
Infrastructure Minister Amarjeet Sohi said Ottawa was mulling whether to focus on existing projects for two years before starting on a promised 10-year program of new investments. He did not say how much the maintenance could cost.
The Liberals won power last October on the back of a promise to stimulate growth by investing an extra C$60 billion ($42 billion) in infrastructure over a decade.
Since then, though, the economy has slowed further amid crashing oil prices. Bank of Canada Governor Stephen Poloz said on Wednesday the strength of recovery would depend in part on how Ottawa rolled out the stimulus in its budget.
Sohi said the funds for maintenance could be used immediately to repair social housing, rebuild water and wastewater systems and upgrade bus fleets.
"We want to make sure that we get the money out into the community as quickly as possible so we can create jobs and grow our economy," he told reporters in Toronto.
BMO Capital Markets senior economist Sal Guatieri said the proposal sounded like "a pretty good idea" since it would speed up the rate at which the stimulus kicked in.
"Two or three years from now our economy should be doing a lot better than it's doing is now. We need the stimulus now, not then," he said in a phone interview. Continued...