by Ian Munro

Everyone loves finding that unexpected twenty-dollar bill in the pocket of a seldom-worn coat or under the stack of unread magazines on the coffee table. The same glee is felt by politicians when windfall revenues or larger-than-expected budget surpluses arise. In fact, their excitement is no doubt far greater on account of all the extra zeros involved.

Recently, both Nova Scotia Premier Rodney MacDonald and federal Liberal leader Stéphane Dion have been musing as to what they would do with such “found money”.

Premier MacDonald is anticipating that the Province soon will receive hundreds of millions of dollars upon settlement of the Crown share offshore royalty issue. Despite the fact that Nova Scotia has legislation – passed when the Premier was a member of the John Hamm government, by the way – requiring any windfall revenues to be applied to retirement of the provincial debt, he has said that he’s open to spending some of these proceeds on infrastructure like roads and bridges.

Similarly, Mr. Dion said last month that he would take all but $3 billion of any federal surplus and spend it on things like bridges, sewers, and public transit.

At least they’re not talking about using the money to build mega-greenhouses or establish a new registry for pitchforks and baseball bats.

Of course money must be spent to fix problems when bridges are at risk of collapsing, pipes are leaking, and roads are so filled with potholes that they resemble a moonscape. (While driving the mean streets of Halifax the other night, I actually thought I heard my car beg for mercy at one point.) But there’s something wrong with the equation when visits from the fiscal tooth fairy are all that separate us from a world of rubble, puddles, and rusted out buses.

Sound infrastructure is key to our competitiveness and future prosperity and should indeed be a high priority. The process of establishing high priorities, however, requires that lower priorities be identified as well, with the dollars flowing from one to the other, accordingly.

All too often the practice for funding infrastructure has been a sad three-step affair. First, set aside a wad of cash for some major new investment – including a few bucks for the red ribbon-cutting photo-op for the politicians who had ponied up the dough. Second, don’t include an annual budget line for maintenance and replacement – such a slip of the mind is much easier to sell than, say, admitting that a new spending line will require that dollars be cut from somewhere else. Third, once the bridge or tunnel has fallen into disrepair and there is no money on hand to replace it, start praying for that windfall!

If infrastructure were properly managed and budgeted for, then windfalls and surprise surpluses would never be necessary to fill the holes, fix the cracks, and plug the leaks. Instead, appropriate allotments would be made each year for operations, maintenance, and replacement, and to the extent that these requirements put pressure on budget balances or prudent borrowing limits, other lower priority items would see their funding cut.

There’s nothing wrong with spending money to ensure that our basic infrastructure is safe and efficient, but before our elected leaders sign the cheques on our behalf, we should ensure that this time the shiny new bridge won’t turn into a pile of rust and cries of poverty twenty or thirty years down the road. Next time, the windfall may not be there for the taking.

Ian Munro is the Director of Research at the Atlantic Institute for Market Studies, a non-partisan public policy think tank based in Halifax.