“New” Public Investment and/or Public Capital Maintenance for Growth? The Canadian Experience

The article revisits the relationship between growth and public productive expenditures by investigating the growth impact of “new” public investment along with maintenance expenditures in public capital. We sketch out the importance of these components of public capital expenditures for growth and then use survey data from Canada to assess the impact of these variables on Canadian growth. We find evidence that the Canadian economy would benefit from a fall in total public capital expenditures and from a reallocation between new public investment and maintenance expenditures. We also identify the growth impact of the associated sectoral public capital expenditures. (JEL E22 , E62 , H21 , H54 )