The Canadian insurance industry is calling on governments to consider measures to help support long-term infrastructure investment.
In report published Wednesday, Canadian Life and Health Insurance Association (CLHIA) makes a series of recommendations aimed at enhancing the environment for infrastructure investment. “Canada faces an estimated $400 billion infrastructure deficit that must be addressed if we are to grow our economy and support Canadians’ standard of living,” the CLHIA says.
To that end, it argues that governments must work with private sector investors to help fund the necessary investment. The report makes a number of recommendations targeted at provincial governments and the federal government that, it says, would help stimulate financing for infrastructure investment.
Among other things, it recommends that governments create a dedicated agency to assist in funding infrastructure construction; that the federal and provincial governments help municipalities more easily access private investment; and that governments should issue more long-term bonds, such as ultra long-term, 50-year issues, to help finance infrastructure projects.
The report also says that governments must ensure that the regulatory and accounting regimes support the long-term investment market. Specifically, it says that accounting standards setters should not adopt new international financial reporting standards for insurance contracts without ensuring that they represent an improvement on the existing standards. And it notes that the capital rules should not discourage long-term investment.
“From the hospitals that heal us to the bridges that link us, a robust infrastructure system is critical to economic growth and to maintaining Canadians’ standard of living,” said Frank Swedlove, president of the CLHIA. “Canadian life and health insurers have $540 billion in long-term assets in Canada. We are prepared to work with governments to invest in infrastructure and get these projects built.”