I have been meaning to write about the new $2 billion “Strategic Investment Fund” (SIF), the 3-year infrastructure money-dump the Liberals announced in the budget.  However I waited a bit too long and Paul Wells beat me to it in an excellent little article called How to Spend $2 Billion on Research Really Quickly (available here).

Do read Wells’ piece in its entirety, but the Coles Notes version is:

1. The deadline for submission is quite soon (May 9), which is kind of a crazy goal for slow-moving organizations for universities to hit
2. The money is not a straight-out grant: matching funding is required, which could be a bit of a challenge
3. The amount of work required to a shot of that money in terms of getting engineering and regulatory approvals, environmental assessments, providing evidence of “additionality”, “sustainability”, “meeting industry needs”, “benefiting aboriginal populations” and of course getting approval from one’s Board of Governors, is stonkingly huge.

Those are all good points.  Let me add a couple of more.

First of all, yes these things are challenging but hardly unprecedented. The timeline and process are almost exactly those seen in the Knowledge Infrastructure Program (KIP) the Tories created for the 2009 budget.  In both cases, the programs were announced with unbelievably tight timeline criteria (about two months from budget time to deadline) and the same matching funding requirement.  In both cases, the program was announced with eligibility criteria but no selection criteria.  That means we don’t really know what the government is looking for, what kinds of things it wants to see in submissions and how it will go about choosing from among the many submitted projects.  There is a margin for shenanigans here, but it’s the same margin the Tories had in ’09 and everyone seems to think that process went OK.

Second of all, the key thing to understand here is that although the rhetoric around infrastructure is always about “new” infrastructure, the fact of the matter is given the timelines and the rules, this program will be almost entirely about renovations and re-fits. (and occasionally some expansions).  The tight timelines make it impossible to submit any build project that isn’t already in the pipeline, and the rule that the federal money shouldn’t displace already-committed money means pretty much anything in the pipeline is ineligible.  In my (admittedly non-random) quick scan of projects completed under KIP, I could only find one example of a project which was 100% new build, namely, the ART Lab studios at the University of Manitoba.

(Also – apparently U of M managed to get KIP to fund seven different projects.  Kudos to one or both of their planning shop and government relations shop).

Third, between twenty years of CFI funding plus now two rounds of KIP/SIF (let’s be honest, it’s the same program), one does start to wonder at what point we start entering into a moral hazard position where the provinces essentially opt out of the infrastructure game because they know the feds will pony up – or indeed whether we haven’t actually reached that point in several provinces.   True, the feds might respond by saying “but they can play a role by choosing the projects for which they want to provide matching funds”.  To which, if I were a provincial government, I might calmly explain that the feds should use this explanation for a rather protracted rectal examination because in effect what they are doing is blackmailing the provinces into spending on things they didn’t really intend to spend money during a period where most provinces are trying to control spending not increase it.  (I might also explain that if the federal government that when it says it wants to consult with provinces, it’s generally more effective to do so before announcing the program rather than after).

I’m sure there are many in Ottawa (including some higher education membership organizations) who think the idea of adding infrastructure to student aid and research as areas of shared jurisdiction in higher education would be just swell.  But it’s not entirely obviously to me that divorcing capital investment policy from system-level strategy is a recipe for good outcomes.  I suspect this is going to be part of a debate on “fiscal imbalances” between federal and provincial governments sometime quite soon.  Watch this space.