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Outdated Rules Deepen Ontario's Infrastructure Defecit

December 6, 2017

Outdated rules that restrict bidding on municipal construction projects to a small group of companies are strangling growth in some of Ontario’s biggest cities, including Toronto, Hamilton, and the Region of Waterloo. Brian Dijkema, Work & Economics Program Director at think tank Cardus, presented new research on the issue today to a luncheon put on by the Greater Kitchener Waterloo, Cambridge, and Hamilton Chambers of Commerce. The report, Up, Up, and Away: The Impact of Restrictive Tendering in Municipal Contracting in Ontario, shows that restricted bidding more than doubles the upward pressure on construction prices for public projects.

“The effect of restricting competition is akin to a kid letting go of a helium balloon: prices go up and up,” says Dijkema. “And the results are the same: you’re crying for more balloons. So, places like Toronto, Waterloo Region, and Hamilton can afford less infrastructure unless they raise taxes or cut spending in other areas, like social programs.”

Up, Up, and Away: The Impact of Restricted Tendering in Municipal Contracting in Ontario also found that cities with restricted bidding rules can have zero confidence that they’re getting the lowest price for any infrastructure project. Dijkema co-authored the report with University of Toronto labour economist Dr. Morley Gunderson and Western New England University business professor Dr. Tingting Zhang.

Download Up, Up, and Away: The Impact of Restricted Tendering in Municipal Contracting in Ontario by clicking this link.

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Daniel Proussalidis
Cardus - Director of Communications
613.241-4500x508
dproussalidis@cardus.ca

About Cardus

Cardus is a non-partisan, not-for-profit public policy think tank focused on the following areas: education, family, work & economics, social cities, end-of-life care, and religious freedom. It conducts independent and original research, produces several periodicals, and regularly stages events with Senior Fellows and interested constituents across Canada and the U.S. To learn more, visit: www.cardus.ca and follow us on Twitter @cardusca.

Linked to Cardus' Work and Economics research project.

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