Lib­er­als to de­lay spend­ing on in­fras­truc­ture

Calgary Herald - - FINANCIAL POST - JOR­DAN PRESS

The fed­eral Lib­er­als plan to shift just over $2 bil­lion in planned in­fras­truc­ture spend­ing to fu­ture years, re­flect­ing slow­erthan-an­tic­i­pated spend­ing on the file, The Cana­dian Press has learned.

The money won’t come from planned spend­ing in one spe­cific year.

Nor will it come from one spe­cific pro­gram, but across mul­ti­ple funds set up by the Lib­er­als and the pre­vi­ous Con­ser­va­tive gov­ern­ment, as well as large-scale projects over­seen by In­fras­truc­ture Canada, such as the Cham­plain Bridge re­place­ment in Mon­treal.

What the Lib­er­als have found is that they can’t move cash fast enough out of the fed­eral trea­sury for in­fras­truc­ture projects around the coun­try.

“It is about cash flow man­age­ment to bet­ter meet the (con­struc­tion) sched­ules of our part­ners,” said Brook Simp­son, a spokesman for In­fras­truc­ture Min­is­ter Amar­jeet Sohi.

The fed­eral gov­ern­ment reg­u­larly has to carry over, or “re-pro­file,” in­fras­truc­ture money from one fis­cal year to the next: Spend­ing anal­y­ses have shown that about one-quar­ter of in­fras­truc­ture funds don’t get spent in the year for which they are bud­geted.

The rea­son is that fed­eral dol­lars only flow once project pro­po­nents sub­mit re­ceipts for re­im­burse­ment, of­ten leav­ing a lag be­tween when work takes place and when in­fras­truc­ture money is ac­tu­ally spent.

In some cases, the fed­eral gov­ern­ment won’t re­ceive re­ceipts un­til the end of a project.

The projects them­selves can be de­layed for a num­ber of rea­sons, such as bad weather or a labour dis­rup­tion, that are beyond the con­trol of the fed­eral gov­ern­ment.

In­fras­truc­ture Canada’s web­site shows that as of last Fri­day, there was about $20.5 bil­lion left un­spent across 13 dif­fer­ent pro­grams, in­clud­ing two set up by the Lib­er­als.

The Lib­er­als promised in the last elec­tion to move un­spent in­fras­truc­ture money into the gas tax fund that goes di­rectly to cities for tran­sit, water or roads projects.

The gov­ern­ment closed out sev­eral old in­fras­truc­ture pro­grams at the end of March, giv­ing the gas tax fund $30.1 mil­lion of money which the prov­inces didn’t ear­mark for any projects.

That won’t hap­pen with the money to be spent in fu­ture years be­cause it comes from pro­grams that still have years left be­fore they ex­pire, Simp­son said.

“Fund­ing is be­ing re-pro­filed to fu­ture fis­cal years of pro­grams that are on­go­ing rather than dor­mant, be that the New Build­ing Canada Fund, Clean Water and Waste­water Fund, or Pub­lic Tran­sit In­fras­truc­ture Fund,” he said.

JOHN MA­HONEY

The Lib­eral gov­ern­ment will use in­fras­truc­ture money from mul­ti­ple funds set up by the Lib­er­als and the pre­vi­ous Con­ser­va­tive gov­ern­ment, as well as large-scale projects over­seen by In­fras­truc­ture Canada, in­clud­ing the Cham­plain Bridge re­place­ment, pic­tured, in Mon­treal.

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