EDITORIAL PAGE — Capital spending plans

The good news is that governments are paying more attention these days to aging infrastructure, such as roadways and sewage systems. The bad news is that drivers using newly constructed highways may face tolls, and higher costs may accompany the new and improved water and sewage installations.

On the economic front, it is an encouraging, but not entirely over- enthusiastic, new scenario: a recovery is projected for 1993, but it will be a modest one.

In Ontario, Premier Bob Rae, fresh from a revamping of his cabinet, says his New Democratic Party government, together with municipal and private sector partners, will invest about $6 billion in the province’s infrastructure. (The province’s contribution will be about $4.8 billion.) It’s a 10-year program which, according to the premier, will create more than 100,000 jobs. Projects include building new highways, improving conservation methods and water quality, expanding the province’s telecommunications network, relocating government offices and extending rapid transit lines. In the U.S., the new administration under Bill Clinton has been talking along similar (and perhaps broader) lines, with its proposals to stimulate the American economy by rebuilding that nation’s infrastructure. It is pleasant news for the minerals industry, which would make a significant contribution to any infrastructural rebuilding. The U.S. mining industry says it finds the new administration’s pledge to rebuild roads, bridges and tunnels encouraging.

Taking a page from the private sector, the Rae government says it will create Crown corporations to look after its investments in three areas: transportation, water and sewer, and the province’s real estate holdings. The advantage of such a setup, the government says, is that it will allow for new types of financing (private-sector partnerships and joint ventures, for example) and cost recovery (through charges to users and levies on those who benefit financially from the projects).

While a Crown corporation tends to be more flexible than a government ministry, keeping the former accountable can prove to be a daunting task. A government agency that likes to work according to its own agenda could as easily as not become as bureaucratic and wasteful as the government department it was created to replace.

As for the economy, it could be a so-so productive, but uneventful, year. One major Canadian bank sees Canada’s gross domestic product growing by 2.2% in 1993, while another predicts real economic growth of 3.1% this year and 4% in 1994.

South of the border, the American Mining Congress (AMC), toning down earlier predictions, now says a modest recovery is in the cards for 1993. Along with the proposed infrastructural rebuilding in the U.S., the AMC sees opportunities from increasing consumer growth in Latin America and the Pacific Rim countries. And cutbacks in exports from the Commonwealth of Independent States should help the U.S. and other Western producers to reduce their metals inventories. Real recovery for the mining industry, says the AMC, may not arrive until 1994 or later.

Like the motorist who may end up with a super new highway and a toll to pay, the AMC is concerned that the new Washington administration’s budgeting may bring its share of tax hikes. The former may find an alternative route and keep his money, while for the latter there may be no way out.