OTTAWA, Feb. 2, 2007 (CHP)—Reports that the federal government may sell a quarter of its property holdings, then lease the buildings back from the new owners, shows the urgent need for a fresh approach to infrastructure renewal, says the Christian Heritage Party of Canada.

A report in the Globe and Mail Jan. 31 quoted Public Works Minister Michael Fortier as saying about $1.5 billion of $5 billion worth of federal buildings owned by the people of Canada might be sold to private investors, then leased back. The purpose would be to shift the burden of maintenance to the new owners. Many of the buildings have deteriorated badly because the government had other spending priorities, the report said.

"This plan is typical of the way former governments often channeled public money to their friends," said CHP leader Ron Gray. "Often the government wound up paying rent on empty buildings. Many office buildings were paid for by federal government rents-but ended up in private hands.

"It's an illusion to say that the maintenance would be paid by the new owners; those maintenance costs-plus a profit on them-would be included in the lease payments made by taxpayers.

"In the end, taxpayers always pick up all the bills for the private owners."

A better plan, he said, would be to revive an infrastructure renewal program from the late 1940s. At that time, when the federal government feared the sudden return of two million soldiers might cause unemployment and plunge Canada into another Depression, Ottawa ordered the Bank of Canada to make loans that were virtually interest-free to provinces, municipalities and Crown corporations for infrastructure projects. That construction activity absorbed the surplus labour, and the revenue from increased economic activity enabled borrowing agencies to repay the loans quickly.

The CHP has proposed that such a plan should be implemented to renew crumbling infrastructure in Canada's cities and across the nation: roads, highways, urban and interurban passenger rail services, water and sewage treatment plants, smokestack 'scrubbers', airports and seaports, as well as capital facilities for education or for research and development could be financed with interest-free loans. As the loans were repaid, the newly-minted money could be retired from circulation so the effect would not be inflationary.

"Such a plan could also be used to fund maintenance and updating of decaying federal government buildings," said Gray. "That would be better than paying 25 years of rent to investors so they can make a profit on properties now owned by the people of Canada. That rent would end up being far more than the $1.5 billion the government would get from them today."