The condition of municipal infrastructure in Calgary is deteriorating rapidly, and public finances have not been able to keep pace. To address the situation, the city should turn to public-private partnerships, recommends the MEI in a new Economic Note published this morning.

"The financial capacity of public institutions and the taxpayers that fund them is not unlimited," says Gerard Lucyshyn, senior economist and Vice President of Research at the MEI and co-author of the publication. "Turning to public-private partnerships would reduce the burden on municipal finances and the taxes that fund them, without compromising services."

An accelerating infrastructure crisis

In 2013, approximately two per cent of Calgary's infrastructure was classified as being in poor or very poor condition, according to City data. In 2026, that proportion has now reached 14 per cent.

More than 20 per cent of roads, sidewalks, and pathways are in poor condition. As for drinking water infrastructure, 10 per cent is in poor shape.

Maintaining municipal infrastructure in good condition will require significant spending, according to figures from the City of Calgary's Annual Financial Report.

The needs for the next 10 years are estimated at $53.3 billion. Of that amount, $21.8 billion represents the expected cost for new infrastructure and $18.5 billion the cost of maintenance and replacement for existing infrastructure.

In comparison, municipal revenues were $7.2 billion in 2025.

"With $53 billion in needs and $7 billion in annual revenues, the numbers speak for themselves," notes Mr. Lucyshyn. "By leasing some infrastructure to private partners under the right conditions, the city reduces the financial pressure on Calgarians, while ensuring quality services."

Putting the private sector to work for the public through P3s

A public-private partnership (P3) is a collaboration between a government and a private company for the construction, financing, maintenance and/or operation of public infrastructure. The government retains ownership of the assets, control over rates, and responsibility for quality standards, while the private partner is responsible for achieving specific results.

Calgary has already demonstrated that this model works. Its first major P3 project, for a composting facility delivered in 2017, was completed on time and on budget. The City has had a formal P3 policy since 2008, policy CFO011, which enables this type of partnership.

In another publication last year, the MEI highlighted that French roads under a concession system, whereby the government retains ownership and leases operations to a private partner, were 3.4 times less likely to be in poor condition than those managed exclusively by the public sector.

For Calgary, the model simply needs to be used more systematically, notably in the drinking water sector, where more than 10 per cent of infrastructure is in poor condition. The City will need to invest more than $5 billion in this area over the next 10 years.

"Calgary has the tools and has already experimented with the P3 model," concludes Mr. Lucyshyn. "Every year of inaction means another piece of infrastructure deteriorating and a growing bill for Calgary's citizens. It's time to take action."

• You can read the MEI Economic Note here.