Canada is not the United States: Stimulus-by-infrastructure edition

Worthwhile Canadian Initiative: Canada is not the United States: Stimulus-by-infrastructure edition:

Canada is not the United States: Stimulus-by-infrastructure edition

In an earlier post, I asked "Just who is supposed to build the new infrastructure?" Since then, no-one seems to have even attempted to provide an answer, so I'm asking it again.

I agree with the following points:

1. The US needs a large fiscal stimulus.
2. Canada needs a not-quite-so-large fiscal stimulus.
3. A US infrastructure program makes sense for the here and now.

But I question the assertion that a Canadian infrastructure program is what we need now. Here's why:

Clearly, there's a lot of slack in the US construction sector: employment is 900k (11.7%) off its peak in late 2006. Now, there's a case to be made that the construction sector had to shrink, but there's an even stronger case that it would have been better to stretch out this transition a bit. Infrastructure spending will absorb some of that excess capacity over the short term.

But Canada is not the US. In addition to what the macro data say in that graph, anecdotal evidence (ex: this comment on an earlier post and this G&M article) suggests that the Canadian construction sector is at or beyond its capacity: tenders without bids, workers called in from retirement and so on.

It's all very well to talk about "shovel-ready" projects, but major infrastructure projects are not begun by (say) laid-off auto workers wielding shovels: they are begun by skilled workers operating backhoes and excavators - and they're busy. A strategy of fiscal stimulus based on infrastructure spending seems to be based on a plan to wait until enough construction workers become available before the stimulus can start.