Projects Across the Nation

After careful assessment of over 900 project proposals, 536 projects were approved for funding from the Knowledge Infrastructure Program. After some projects were merged, deleted or added, a final total of 520 projects in 190 communities across Canada received funding. Projects were supported in every province and territory in the nation.

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Distribution of Projects

Projects were not only distributed geographically, they were distributed between universities and colleges/cégeps. The 520 projects, of which 195 were at universities and 325 at colleges and cégeps, involved a total of 241 institutions across Canada. The new and enhanced facilities supported by KIP support a better educational experience that contributes to the development of the highly skilled workers of tomorrow.

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Approved Project Funding

Over $1.97 billion in KIP funding was awarded to projects and the remaining 1.5% of the overall budget was retained to support the administration of the program. Effective partnerships were formed particularly with provincial and territorial governments to minimize administrative costs. Less than 1% of the program’s $2 billion budget was used for administrative costs. While universities accounted for only 36% of the projects, they were awarded 66% of the total project funding available under KIP while the remaining 34% went to colleges and cégeps. University projects tended to be significantly larger; the average KIP investment at a university was $6.6 million while the average for colleges/cégeps was under $2.0 million.

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Project Scope

Projects which involved renovation, repair, and maintenance, represented more than two-thirds of the projects and some projects included elements of both new construction and renovation.

However, given the general increased scale and complexity involved with new construction or expansion of facilities, the average new construction/expansion project cost more than a typical renovation project. As a result, projects that involved new construction or expansion accounted for nearly three-quarters of the overall KIP budget.

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Economic Stimulus

The economic stimulus objective of the program is served through the costs being incurred on projects. The incurring of costs relates directly to the creation of work for engineers, architects and construction workers and indirectly to the many additional jobs generated at the suppliers of building materials and equipment and other products and services consumed by those involved in the construction and renovation of facilities supported through KIP.

The eligible program costs incurred on each KIP project were indicated in Progress reports, received on a quarterly basis from August 2009 to March 2011 and bi-monthly for the period of April 2011 to October 2011. This slightly understates the economic impact of the program since projects also incurred some costs that were not eligible for the program. Ineligible costs were reported only in the project final report and not in each progress report. The economic stimulus of KIP significantly exceeded its $2 billion budget because it leveraged additional investment from other sources.

The intensity of economic stimulus over the life of the program is driven by expenditures on projects which proceeded as shown in the graph below. Project spending ramped up over the first several months of the program as this period often involved a small number of engineers and architects on each project finalizing designs and institutions tendering construction contracts. The rate of spending accelerated as construction activities got underway on more projects in the spring and summer of 2010. Spending started to slow later in the program, particularly after March 2011, when construction activities had been wrapped up on an increasing number of projects so that costs were thereafter being incurred on only a decreasing number of projects.

To assist in benchmarking the progress of projects, program officials devised a mathematical model, called the 10-50-40 model, to determine the average expected expenditures of any project at any time. The model uses the date of the announcement of federal support for each project as the start date and the scheduled completion date as the end date and then subdivides the period of the project into three equal segments. The model assumes 10% of total project expenditures will occur in the first segment, 50% in the second segment and 40% in the third. Officials used this model to identify projects which appeared to be at high risk of failing to meet the project deadline. As shown in the chart, the 10-50-40 model more closely represents actual expenditures than a linear model which assumes that costs are incurred at an even pace.

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Leverage

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	Aug-09	Nov-09	Feb-10	May-10	Aug-10	Nov-10	Feb-11	Mar-11	May-11	Jul-11	Sep-11	Oct-11
New Construction or Expansion	$.10	$.34	$.50	$.72	$1.01	$1.38	$1.79	$1.90	$2.09	$2.26	$2.40	$2.78
Renovation, Repair or Maintenance	$.10	$.27	$.42	$.61	$.98	$1.45	$1.79	$1.88	$1.99	$2.07	$2.15	$2.33

New construction projects induced $2.78 in direct expenditures for every $1 of KIP investment, while repair and maintenance projects induced $2.33 for every $1 of KIP investment. The higher leverage meant that new construction projects generated greater economic stimulus than renovation projects. This held true during the initial year-and-a-half of the program. The economic impact of renovation projects briefly surpassed that of new construction projects late in 2010 but new construction rose ahead once again by March 2011 and the relative impact continued to rise thereafter. The continued rise from March to October 2011, the period of the program extension, resulted from the higher proportion of renovation projects which were completed earlier in the program’s timeline.

KIP Project Completions (by type)

Project Scope	Feb-10	May-10	Aug-10	Nov-10	Feb-11	Mar-11	May-11	Jul-11	Sep-11	Oct-11
Renovation, Repair or Maintenance	38	50	92	139	180	262	282	304	333	359
New Construction or Expansion	1	3	7	11	23	48	56	69	85	108
Both: Renovation and New Construction or Expansion	1	4	9	11	12	20	25	31	41	48
Total	40	57	108	161	215	330	363	404	459	515

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Project Completion

At the outset, getting projects underway and completed quickly were seen as primary objectives that would be critical to serving the government’s overall goal of providing the economic stimulus to create jobs when they were needed most. While it can be said that most KIP projects were substantially completed by the original deadline of March 31, 2011, and virtually all of them were substantially completed by the extension date of October 31^st, 2011, there is a large gap between the proportion of projects completed and the level of economic stimulus provided through project expenditures. The completion of projects varied in relation to the size and scope of each project. Within one year of the program launch, 40 projects were completed and nearly all of these were renovation projects. That equates to only 8% of all projects but the level of expenditures in that first year (roughly $1 billion) shows that the economic stimulus far exceeded a level of 8% of the program. By March 31^st, 2011, the number of completed projects had climbed to 330, which is 63% of the projects, yet the expenditures had reached nearly $4 billion by that time. While more of the repair and maintenance projects (73%) had been completed than new construction and expansion projects (44%) by March 31, 2011, total expenditures were nearly double for new construction and expansion projects ($1.9 billion), compared to the $996 million in expenditures on renovation and maintenance projects at that time. In practical terms, the gap between level of expenditures and project completion is explained by the natural slow-down that occurs on-site as projects are wrapped up and the new or renovated facilities are readied for use.

Completed KIP projects (by institution type)

	Feb-10	May-10	Aug-10	Nov-10	Feb-11	Mar-11	May-11	Jul-11	Sep-11	Oct-11
College	38	52	91	129	163	240	250	266	302	322
University	2	5	17	32	52	90	115	140	159	193