The Business Case for Community Benefits Agreements in Publicly Funded Infrastructure Projects

Infrastructure is a critical foundation that supports economic growth and quality of life and includes everything from roads and bridges to power plants, hospitals, data centres and other digital infrastructure. Demand for investment in critical infrastructure in Canada has increased with population growth, aging assets, and chronic under-investment, which has resulted in an infrastructure deficit estimated to be between $150 billion and $1 trillion. Consequently, coordinated public investments are essential to support sustainable and inclusive growth in Canada, with the federal and provincial governments making recent announcements about major infrastructure projects.

While infrastructure projects can have positive impacts on local communities, their development has also been linked to gentrification, displacement, and erosion of community identity. Addressing these potential negative impacts demands that infrastructure projects consider the communities they serve and provide opportunities to affected residents. Community benefits agreements (CBAs) have emerged as a powerful tool in this context. A CBA is a legally binding contract, setting forth a range of community benefits regarding a development project and resulting from substantial community involvement. Benefits often include targeted hiring from equity-deserving groups, job training, apprenticeships, business opportunities for local suppliers and social enterprises, affordable housing, community amenities, and public realm improvements.

This report aims to develop a comprehensive business case for CBAs in the context of publicly funded infrastructure projects in Canada. The study will build on the Toronto Community Benefits Network’s (TCBN) prior success with Metrolinx, which integrated CBAs into major transit projects. The report will adopt a multi-phase approach designed to analyze the costs, benefits, and social value generated by CBAs in infrastructure projects.

The business case developed for this study is divided into four components. Each component of the business case integrates CBA research with insights gathered from the interviews to ensure that the analysis reflects community and project realities. 

●   The strategic case explores how CBAs can align infrastructure investments with broader regional goals and policy objectives and the conditions required to make this possible.

●   The economic case examines how infrastructure projects can deliver benefits to local communities that can address systemic barriers to workforce participation and stimulate local economic growth.

●   The financial case evaluates the fiscal benefits of CBAs related to wages, capital and operational costs, and potential savings or efficiencies over time.

●   The deliverability and operations case illustrates how transparent governance, data-driven planning, and inclusive engagement can support the effective implementation of CBAs.

When effectively designed and implemented, CBAs can deliver a range of benefits such as employment and training pathways for equity-deserving groups, local procurement opportunities for diverse suppliers, and public realm improvements, among others. Recommendations for the successful implementation of CBAs are based on insights drawn from the major components of the study. The recommendations in this report were developed to align with the four aspects of the business case (the strategic case, the economic case, the financial case, and the deliverability and operations case) to ensure that they address a broad range of considerations. Selected recommendations are listed below, read the full report for all recommendations and further insights on CBAs.

●   Use a mix of formal and informal community engagement strategies to encourage representation from equity-deserving groups and to identify community priorities.

●   Wraparound supports are required for individuals experiencing complex employment barriers, to support their re-entry into the labour market.

●   Developers must be educated about the potential cost savings of CBAs, such as those resulting from local hiring (e.g., reduced travel and accommodation expenses).

●   CBA investments should align with broader policy goals and supplement investments from other levels of government (e.g., federal, provincial, municipal).

●   Develop transparent reporting mechanisms that track progress against targets and publish results through progress reports and publicly accessible dashboards.