Mississauga, Ont.If you live in this part of the country, you have spent, in the last decade, an hour of your life in the kind of stationary traffic that an actually competent road-repair sector would not have produced. You have spent it next to a row of orange cones. You have spent it watching three workers in high-visibility vests, one operating a piece of equipment, two leaning on shovels. You have spent it without complaint, because you have been told, by every actor in every level of government and by the company doing the work, that this is what road repair looks like, and there is no other way.

There is another way. Most of the developed world has it. The other way costs less, takes less time, and produces a road surface that lasts longer. The country has chosen, for reasons of regulatory inertia and quiet political accommodation, not to use it. The choice has cost the country, on a per-kilometre basis, more than any other major infrastructure category.

The shape of the monopoly

The road-repair sector in this country is not, in the strict legal sense, a monopoly. It is a structure that economists call an oligopoly with regulatory capture. A small number of large firms, in most provinces three or four, hold the great majority of the road-repair contracts. The contracts are awarded through a tender process the firms have, over decades, learned to navigate together. The pricing in the tenders converges on a narrow band. The band is, by international comparison, high. The duration of the work is, by the same comparison, long.

The reasons for the convergence are not mysterious. The firms know each other. The firms have, over decades, developed similar cost structures. The firms employ the same equipment, hire from the same trades pool, and train in the same regional programs. The firms, in many cases, share subcontractors. The firms also, in any honest competitive analysis, do not have a strong incentive to undercut each other, because the next contract is always coming, and the next contract is more lucrative when the band is preserved than when one of the firms breaks ranks. The band is preserved.

What the work actually costs, elsewhere

A kilometre of asphalt overlay, in this country, costs the public, all-in, between two and three times what it costs in Germany, where the labour is more expensive and the materials are similarly priced. The German road, when it is finished, lasts somewhere between forty and sixty percent longer before the next overlay is required. The German contract, on most jobs, finishes faster, because the German contract penalises duration. Most contracts in this country do not. The contractor is paid, in the typical structure, on completion against a price that has built into it the duration the contractor has signalled it requires. There is no penalty for taking longer. There is, in some cases, a bonus for completing on time, which is to say a bonus for performing the work the contractor was already paid to perform on the schedule the contractor itself proposed.

This is not the structure of a competitive market. This is the structure of a customer who has stopped negotiating. The customer is the public. The public has stopped negotiating because the public has, in this generation of provincial governments, been told that road repair is technical, expensive, and dangerous, and that the firms that do it are the only firms that can. None of the three claims is true. Road repair is technical, but not exotic. Road repair is expensive, but most of the expense is, in the Canadian structure, profit. Road repair is dangerous, but the danger is the same in the jurisdictions where the work costs half as much.

The country is paying the highest road-repair prices in the developed world for the slowest road repair in the developed world.

What a province could do

A province that wanted to fix this could do four things, none of them controversial in international practice and none of them currently practised in this one. The first is to break large multi-year contracts into smaller jobs, awarded more often, in a way that lowers the barrier to entry for new contractors. The second is to require, in every contract, a fixed completion date with meaningful penalties for late delivery, calibrated against the international benchmark for similar work. The third is to publish, in real time, the per-kilometre cost of every job, in a public dashboard the citizen can read. The fourth, and most important, is to break the existing tender process by inviting, on every major job, at least one bidder from outside the country to file a competing bid, with the costs of the competing bid published alongside the local bids.

None of these is a moonshot. None of them requires new technology, new legislation, or new constitutional authority. All of them are practised, routinely, in countries the size and complexity of this one. None of them is practised here. The reason is that the political class, in this province as in most others, has accepted, over a generation, that road repair is a thing the existing firms do. The existing firms have agreed.

The cost of doing nothing

The cost of doing nothing is the cost the citizen is already paying. It is the hour in the cone-row. It is the second hour in the cone-row, three years later, at the same intersection, where the previous repair has, on the schedule the firm itself implicitly designed, already failed. It is the higher gas tax, the higher property tax, and the higher provincial debt that the road-repair contracts, in their current form, have been quietly inflating. It is the deferred maintenance on every other piece of infrastructure that the road-repair contracts have crowded out. It is the long, slow, dignity-eroding sense the citizen has, every spring, that the country cannot, on the most basic of its public works, do better.

The country can do better. The country has not, this generation, asked.