May 12, 2005

Remarks to The Premier's Leaders' Forum on Strategic Growth -
Pantages Suites Hotel
by David Caplan, Minister of Public Infrastructure Renewal

Check Against Delivery.

Good morning, everyone. I welcome the opportunity to speak to you about the exciting times ahead for Ontario.

First, I want to thank you for taking the time to participate in this dialogue with the Province of Ontario.  

Premier McGuinty has asked you here today to provide your input and advice to his vision for Ontario’s future growth.

---

No one can plan in isolation – that is a lesson we have learned all too well.  Previous provincial governments failed Ontarians by abdicating their responsibility to provide leadership in growth planning.

They also failed by leaving a massive infrastructure deficit – the consequences of which I am sure you are familiar with. 

What they didn’t understand or address is the importance of the connection between infrastructure, growth planning and the health of our economy.  Our quality of life depends on us understanding this vital connection.

---

Over the next three decades, Ontario will welcome nearly 3.7 million new Ontarians to the Greater Golden Horseshoe, and almost 1.8 million new jobs.  This is great news for our economy…in theory.

But if we keep growing the way we have in the past – spending money as the political winds blow - allowing sprawling development, and then trying to catch up with the cost of servicing it – our economy will continue to pay a steep price. 

We must change the way government plans, finances and delivers infrastructure projects and erase the mindset that provincial governments can go it alone.

The McGuinty government believes that we must partner with municipalities and the private sector while providing the leadership we were elected to deliver.  And I believe that there is a role for the private sector in building new infrastructure -- I’ll come back to that in a few moments.

---

The cornerstone of this new approach to growth is Bill 136, the proposed Places to Grow Act.  Bill 136, if passed by the legislature, would provide the legal framework to create Growth Plans for any area of the Province.

Given the urgent need to address growth pressures in the Greater Golden Horseshoe, which is the fastest growing and most important economic region of Canada, the government has been consulting for the past year on the priorities for a growth plan for this area.

This February, I released a draft Growth Plan for the Greater Golden Horseshoe.  This draft Plan sets out, for the first time in Ontario’s history, a rational and coherent plan for development.

The draft plan is ambitious.  It presents three broad strategies:

One, it encourages better use of our urban lands by promoting growth to where it can best be accommodatedand away from the lands that provide our food, water and recreation.  This includes the 1.8 million acre greenbelt, which my cabinet colleague Minister John Gerretsen recently established.

Two, it promotes a broad range of housing choices and employment opportunities.

And three, it maximizes the value of our investments in infrastructure to provide better public transit, quicker movement of goods and clean, safe water.

It’s an approach that will create complete and compact communitiesthe kind that provide people with more opportunities for work, shopping, recreation and access to services close to where they live.  And, it’s an approach that will have enormous economic advantages and business opportunities.

Low-density development increases the cost of infrastructure – reducing the effectiveness of our capital budget.

It forces workers to commute long distances on clogged highways, creating stress that translates into low productivity. And the extra time delivery trucks spend in gridlock is added costs to business that hinders economic development.

According to the Toronto board of trade gridlock in the Greater Toronto Area is a $2 billion drag on the local economy.

The Ontario Chamber of Commerce, says border delays are costing our economy $5 billion a year.

That’s not all. According to the Urban Land Institute in the United States, low-density housing can never pay for the additional miles of pipes and highways needed to service it.

Indeed studies suggest that compact developments can lead to an initial 20 per cent savings in infrastructure investments through efficiencies based on economies of scale.

In the US it has been demonstrated that the minute each low-density house is built it adds as much as $35,000 U S to everybody’s tax burden. And then we all pay to service that infrastructure until the house falls down.

Let’s look at health costs.

This year we’ve had studies from the Heart and Stroke Foundation and from the Ontario College of Family Physicians that show clear advantages of compact communities.

They tell us that people who live in car dependant communities miss out on natural opportunities for getting physical activity.  They are more prone to health issues such as obesity and heart disease.

There’s also an important opportunity cost - the loss of human capital.

In his book, The Rise of the Creative Class, Richard Florida argues that today’s breed of professionals and entrepreneurs prefer vibrant, urban neighbourhoods.

Your businesses need these people. And to attract them we need development with a stronger sense of community.  

We need to encourage the benefits of creating exciting, diverse compact communities.  Perhaps that’s why 58 per cent of new homebuyers in Ontario chose multi-unit dwellings last year.

Planning for growth will help businesses avoid both the economic and social costs associated with sprawl. Plus, your bottom line will improve. 

There are numerous American examples of business working with government to plan for growth and taking advantage of the opportunities it provides.

These are our competitors, the large urban zones of the United States. They are far ahead of us in recognizing that growth planning can create the vibrant, connected and attractive communities people are seeking.

We have to make this shift collectively and make it in a profitable way.  Government needs to remove the barriers. 

That’s why, earlier this week, I announced that the government is creating the Ontario Infrastructure Projects Corporation.

This agency will tackle the infrastructure deficit by bringing private capital and expertise to the table. 

This is an approach that has been successfully used by other jurisdictions, jurisdictions that compete with us in a globalized economy.

In Ireland, more than 40 such projects were recently announced. And, in the U.K, more than 600 public infrastructure projects have used alternative financing.

These jurisdictions are gaining a competitive advantage over Ontario. We’ve been slow to recognize the value of partnering with the private sector.

Last month, the Ontario Teachers’ Pension Plan paid $651 million for an interest in a water and sewer company – in Britain! The week before, $1.75 billion for a share of a power generating company - in the United States!

Why didn’t they invest in Ontario? Because we haven’t offered them the opportunity.

For too long we have laboured under the old view that only government should finance and deliver infrastructure, and only using current revenues.

That view has cost us dearly and it’s evident in the infrastructure deficit that is visible to all of us.

It’s a big part of why our schools have mouldy walls, why transit and hospital construction are lagging behind growth, and why our highways and borders are clogged.

We are addressing this.

From now on the McGuinty government will vigorously seek private sector partners to deliver and operate public infrastructure.

We are talking about improving the delivery of health care; improving our centres for world-class research and innovation; unclogging our highways and borders; and, improving our communities by bolstering our economic competitiveness and improving our quality of life.

Managing growth doesn’t mean the Ontario government will start planning all communities.

In fact, the push for these reforms isn’t coming from Queen’s Park. It’s coming from municipal leaders.

We will manage growth, as much as possible, by using powers already found in the Planning Act and the Municipal Act.

But we will also use the new authority that would be created by the Places to Grow Act.

Earlier attempts to manage growth failed because there was no coordinated approach – such as the proposed Places to Grow Act and, our plan to propose a Growth Plan for the Greater Golden Horseshoe. You can’t alter existing growth patterns unless you have the power to make the new rules stick.

You also need the tools, and we are working closely with the Ministry of Municipal Affairs and Housing, and the Ministry of Finance to develop both planning and fiscal tools that will make implementation a reality.

I have spoken before about the urgent need to renew our public infrastructure in all parts of the province.

Our government is prepared to make these needed investments, and the budget presented yesterday by the Minister of Finance showed the initial steps we are taking.

Over the next five years, more than $30 billion will be invested in public infrastructure in Ontario by government and its partners. We will be rolling-out details over the coming months.

I mentioned at the beginning that growth management would start with the Greater Golden Horseshoe.

This is where the most people and jobs will arrive in the largest numbers.  And where the strains on our infrastructure will be most pressing.

Let’s not disappoint them.

Let’s work together, business and government, to realize a dream of a better Ontario.

Government cannot do it alone.  As the draft growth plan for the Greater Golden Horseshoe puts it, “Fundamentally, we are responsible for our lifestyle choices. We are stewards of our communities.” 

I look forward to working with you as we plan for Ontario’s future.