Strategic Focus and Action Items
Invest in strategic economic infrastructure
The government established a $150-million infrastructure support fund ($900 million over six years) to support the New Brunswick Economic Growth Plan. This investment is above the normal capital spending of government each year. The Strategic Infrastructure Initiative (SII) supports infrastructure that fosters growth and incremental job creation or helps make us more competitive. In this context, “strategic” includes infrastructure that directly enables incremental GDP, employment and tax revenue or that is foundational for long-term growth. This can include government-owned infrastructure such as strategic corridors for the forestry sector or infrastructure not owned by government but which drives growth.
When investing in the public sector, government will focus on infrastructure that supports growth or increases competitiveness. When investing in the private sector, government will focus on investments that provide a demonstrated, sustained boost in activity or that are critically important to long-term growth. It is more important than ever to ensure we have a growing economy generating new tax revenue that allows government to fund public services.
Government will also invest in externally owned and managed economic infrastructure that leads to a direct boost to GDP and job creation and provides an ROI in the form of incremental tax revenue. Government will also invest in projects that boost competitiveness.
Government will seek projects where there is a strong public interest and need for the investment. Examples could include infrastructure needed for R&D, infrastructure needed to support high-growth potential industries, ports, airports, rail, broadband infrastructure as well as tourism facilities. Brownfield redevelopment (i.e., the renewal of an older industrial or commercial area) that directly leads to economic revitalization, ongoing GDP growth, employment growth, etc. will also be eligible.
SII is already being used to support growth. The projects announced from internal SII projects created more than 900 jobs in 2015-16. External SII-funded investments announced in 2015-16 will create 3,100 person-years of employment and more than 1,200 ongoing full-time equivalent jobs after construction.
A main objective of SII is to make us more competitive in the long term. Investments that help our key industries and entrepreneurs compete in the global economy are a good investment for the taxpayer.
SII investments will support growth and provide a significant return on the taxpayers’ investment during the next decade. The focus will be on investing in projects that will return incremental tax revenue. This need for a strong direct ROI may be waived if the investment is shown to significantly boost an industry’s (or industries’) competitiveness.
Deeper dive: Strategic Infrastructure Initiative (SII)
Strategic infrastructure is defined as infrastructure that supports competitiveness and growth as well as incremental job creation. This can include internal (government-owned) infrastructure such as strategic corridors for the forestry sector or external infrastructure not owned by government but that drives growth. Examples could include infrastructure needed for R&D, infrastructure needed to support high- growth potential industries, ports, airports, rail, research, tourism, etc. The government is focused on investments that provide a demonstrated, sustained boost in activity or that are critically important to long-term growth. At a time of fiscal austerity, it is more important than ever to ensure we have a growing economy generating new tax revenue that allows government to fund public services.
Not all infrastructure requires government investment. We should be careful not to use taxpayer dollars as a replacement for private-sector investment. If there are projects that can and should be fully funded by the private sector (i.e., the initial project investment is forecast to yield a solid return for private investors), the government should support them in other ways. However, there is a strategic need for government investment in projects with a strong public interest but with a limited private sector-based payback model for the initial infrastructure investment.