How do you wisely spend $14.9 billion of taxpayer dollars?
The Canadian government has just announced a $14.9 billion package for public transit projects, over the next 8 years, across the country. It includes $3 billion per year of recurring financing starting in 2026. That is exciting news for passengers, municipalities and for the rail transportation industry. It promises to reduce CO2s, road congestion and create thousands of jobs.
The modernization and expansion of Canada’s rail transportation infrastructure can also attract major investments from global players. Following the acquisition of Bombardier Transportation by Alstom last month, the major transportation players are now all European or Asian companies based in France, Germany, Spain, Switzerland, Japan and China. Beyond investment and project financing, these companies can transfer world-class technology. As a result, thousands of Canadians workers may develop technical expertise in a growth industry where innovation is driven by digitalization.
So, to return to my original question, how do you spend wisely $14.9 billion of taxpayer money? You focus on what matters most: the best product, at the best price, and the ability to deliver. By selecting suppliers that meet these basic criteria, transportation agencies can meet their raison d’être: providing safe, efficient and affordable transportation to their communities. After all, in the long term that is what matters most.
Some may argue differently. They may suggest that these projects should be awarded strictly on the basis of job creation commitments and the amount of “local content”. But that approach may result in reducing the true benefits of competition: best price, best quality and favourable contract terms. Moreover, it would fail to recognize that regarding European players, the Canada-European Union (EU) Comprehensive Economic and Trade Agreement (CETA) already provides the possibility for Canadian transit agencies in Ontario and Quebec to require that up to 25% of the final value of rolling stock be Canadian Content. This includes every element required for both manufacturing and maintenance, from raw materials and components, to tools and labour. Of most importance, one should realize that the execution of these infrastructure projects will require significant local job creation in and by themselves.
This $14.9B investment is sure to create thousands of skilled jobs working on long lifecycle projects. The key then will be to obtain value for money by ensuring awards are based on fair and competitive processes where product quality, price and ability to deliver are the selection criteria. This is the way that Canadian taxpayers can get world-leading transportation systems fit for the 21st Century.
Yves Desjardins Siciliano, CEO
Siemens Mobility Limited