Poor planning is road block to growth.

Jump in the car at rush hour--we do have a rush hour in some Saskatchewan cities now--and the next big issue on the political and economic agenda becomes abundantly clear. We need to do some work on our infrastructure.

[ILLUSTRATION OMITTED]

Cities such as Calgary, Toronto and Vancouver have wrestled with the challenges of infrastructure for years. It is a sign of success and growth. Civic authorities struggle to keep up with development and added traffic brought on by commercial expansion. More business means more trucks moving goods to and from businesses as more employees commute to work, further clogging up roadways. This is compounded in communities where geography requires bridges that choke traffic even more.

The upshot of all this is the growing focus by our civic leaders on the need for significant new infrastructure development and upgrades to existing assets. That, in turn, leads to the inevitable discussion of mechanisms for funding it.

Our traditional response for financing upgrades and new development is classically Canadian--get another level of government to do it.

Part of the problem is an outdated system that restricts a local government's ability to borrow, something of a colonial or paternal structure designed to have smaller governments come hat in hand to their big brothers and sisters for permission to invest in things such infrastructure.

Nonetheless, the current system means our municipal leaders have to push their provincial and federal counterparts for larger capital allocations. A parallel course that has gained momentum lately, one borne of frustration over the begging aspect of today's system, is to have Ottawa and Regina pass along taxing powers or share tax revenues such as gas levies with local governments. Either way, it amounts to waiting until a senior level of government can amass enough cash and the political will to pass it along to the local administration by setting aside its own spending demands. To put it another way, the feds and province save up cash for the improvements and then pass it along when they're ready.

[ILLUSTRATION OMITTED]

This is such a contradiction to the way we traditionally finance capital expenditures in the private sector where debt instruments are employed to underwrite assets with long life spans, not to mention what it does to cause tension among the leaders at various government strata.

Ironically, a similar problem exists south of the 49th parallel where lower levels of government have restrictions on their ability to go into debt, yet, they have found a way around the road block. The time has arrived for us to explore similar options.

One attractive mechanism employed in the U.S.A. is a municipal bond with a unique feature to lure investors. The bond carries an interest rate that is roughly half the going market rate but, and here's the kicker, the interest income generated by the bond is tax-free. In other words, a bond holder receives roughly the same after-tax return but the local government pays only half the market interest rate.

In an era when the population is aging and their retirement portfolios are becoming increasingly conservative, bonds become a more attractive vehicle for all that cash. Further, a tax-free income stream would be doubly attractive to seniors who see clawbacks claim part of their retirement income.

Allowing local governments to tap into that growing market for infrastructure investment--expenditures that would enhance communities and help them become more vibrant from an economic perspective--would shift the 'hat in hand' approach to one where local governments would not only have more autonomy, but would not have to wait for politicians in senior governments to deliver.

The story behind the story here is the ability of a community to deliver basic services such as roads, bridges, sewer and water. A community with an outdated infrastructure or one that can't cope (i.e. Calgary) with the demands of its own success loses its ability to attract enterprise and to retain people. When we ask people why they leave Calgary in favour of a Saskatchewan address, the most common response relates to lifestyle. Calgary is losing people because the city has become so congested it is now a victim of its own success.

At a time when Saskatchewan communities are beginning to enjoy the benefits of growth we need to get ahead of the curve, to find mechanisms for financing infrastructure development before they become insurmountable. And, if the debate over equalization is any indication, we probably shouldn't hold our collective breaths waiting for senior governments to pony up the cash needed to build a new bridge in Saskatoon or a waste water treatment facility in Regina. We need to find new ways for local government to attract investment capital and, since the tax-free municipal bond concept has proven it can work in America, it should get consideration here.

Paul Martin is heard daily on 90 CJME and 650 CKOM as well as on the radio stations of the Golden West Broadcasting network in Saskatchewan.