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In­fra­struc­ture cash won’t flow un­less prov­inces can show it will boost growth: Lib­er­als

The Guardian (Charlottetown) - - BUSINESS - BY JOR­DAN PRESS

The Trudeau govern­ment is telling prov­inces and ter­ri­to­ries that bil­lions in new in­fra­struc­ture money won’t flow from fed­eral cof­fers un­less lower lev­els of govern­ment can show that the spend­ing will boost the rate of eco­nomic growth.

Nor will projects likely be el­i­gi­ble for fed­eral funds if they can’t show a ben­e­fit to the en­vi­ron­ment - par­tic­u­larly re­duc­ing green­house gas emis­sions - as the Lib­er­als place con­di­tions on $33 bil­lion in planned spend­ing over the next 11 years.

In let­ters be­ing de­liv­ered to­day, In­fra­struc­ture Min­is­ter Amar­jeet Sohi tells his pro­vin­cial coun­ter­parts that the govern­ment is tak­ing an out­comes-based ap­proach to fund­ing de­ci­sions, which means projects have to meet na­tional ob­jec­tives and not just lo­cal in­ter­ests.

Un­der the terms of fed­eral fund­ing out­lined in Sohi’s let­ters, prov­inces will have to pub­licly re­port on the en­vi­ron­men­tal and em­ploy­ment ben­e­fits from any project.

Sohi is putting an em­pha­sis on think­ing big, pri­or­i­tiz­ing new projects - not ren­o­va­tions, as the Lib­er­als al­lowed un­der their short-term plan in­tro­duced last year - and in­sist­ing that the prov­inces agree not to use the fed­eral dol­lars in place of their own.

“We want the new pro­grams an­nounced in Bud­get 2017 to fo­cus on out­comes that will have a pos­i­tive, real im­pact on Cana­di­ans for gen­er­a­tions to come,” he writes.

The $33 bil­lion is part of $81.2 bil­lion in the Lib­er­als longterm in­fra­struc­ture pro­gram that Sohi specif­i­cally over­sees, with the re­main­der to be doled out un­der the watch­ful eyes of two other min­is­ters and the soon-to-be-cre­ated fed­eral in­fra­struc­ture bank.

None of the money can flow to projects with­out fund­ing agree­ments in place with prov­inces. The let­ters sent Thurs­day set the pa­ram­e­ters for those ne­go­ti­a­tions. Sohi writes that the govern­ment wants to have agree­ments in place no later than March 2018.

The Lib­er­als have banked on their in­fra­struc­ture pro­gram as a key driver of eco­nomic growth, the hope be­ing it can help in­crease govern­ment rev­enues and thereby do bat­tle with the deep deficits the Fi­nance Depart­ment pre­dicts will con­tinue for years to come.

The govern­ment plans to cover up to 40 per cent of the cost of new city projects, with prov­inces ex­pected to pony up at least 33 per cent of el­i­gi­ble costs. Fed­eral dol­lars will cover up to half the cost of pro­vin­cial projects, and 75 per cent for Indige­nous projects.

CP PHOTO

Min­is­ter of In­fra­struc­ture and Com­mu­ni­ties Amar­jeet Sohi re­sponds to a ques­tion dur­ing ques­tion pe­riod in the House of Com­mons on Par­lia­ment Hill in Ot­tawa on Mon­day, June 5. The Trudeau govern­ment is telling prov­inces and ter­ri­to­ries that bil­lions in new in­fra­struc­ture money won’t flow from fed­eral cof­fers un­less lower lev­els of govern­ment can show that the spend­ing will boost the rate of eco­nomic growth.

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