Improving the Fiscal Transparency and Sustainability of Public-Sector Transportation Infrastructure

Abstract

Public-sector infrastructure funding is a complex and often unclear process. Cities operate most efficiently if there is an adequately-funded transportation network with which residents and visitors can easily travel from origin to destination. Building these networks comes with challenges, which are often rooted in funding concerns. Part of this may be due to deficient understanding among the public and in governments about how transportation is truly funded, due to the opaque nature of many elements of government funding flows.

This research addresses a need for methods that improve the transparency and fiscal sustainability of transportation infrastructure. Financial flows across governments are disaggregated and mapped across four tiers of infrastructure – federal, provincial, regional, and local – using the circular flow diagram as the base framework, to provide an understanding of how governments receive and spend funds. Origin revenues for water and transportation infrastructure in Waterloo, Ontario are determined, then the benefit model, which links revenues with effective expenditures, is used to evaluate whether the origin revenue sources being used to pay for each infrastructure system is effective. A sustainability analysis is then conducted for Waterloo and Toronto, comparing road and transit funding against the rate of infrastructure growth.

The results suggest that water revenue in Waterloo is well-linked to the infrastructure, roads and active transportation are somewhat well-linked, and transit is not linked as well. Roads could be better linked if technology is implemented that allows better tracking of independent vehicles in urban settings. Roads in Waterloo and Toronto were found to be somewhat sustainably funded, although they trended in opposite directions, and transit funding was found to be less sustainably funded in Toronto, and somewhat sustainably funded in Waterloo pending the completion of the ION rapid transit system.