The Economic Impact of Municipal Investments

Fall 2020

Within the context of COVID-19, there is potential for new Federal and Provincial funding to Municipalities for recovery-focused infrastructure projects. Outside of COVID-19 the Finance Department at Durham Region is regularly assessing how to allocate infrastructure funding. We estimated local economic impact multipliers for different municipal infrastructure projects, including water supply, sanitary sewage, transportation, facilities, fleet, and equipment. Increased municipal investment is positively associated with increase in GDP, employment, GDP per capita, and personal income per capita in Durham region from 2012 to 2019. Splitting up infrastructure investment shows that investments in water supply, sanitary sewage, transportation, facilities, fleet, and equipment have all contributed to the Region’s economic growth. We provided suggestions on how the Region can prioritize future infrastructure projects based on the comparisons of quantitative data results.