Feds place rules on infrastructure cash
OTTAWA — Provinces and territories that want a slice of new federal infrastructure money will have to prove it will accelerate economic growth, under the terms laid out by the Liberals for the government’s long-term funding program.
Projects will also have to show a benefit to the environment — reducing greenhouse gas emissions and improving resiliency against natural disasters, for instance — according to the strings on $33 billion in planned federal spending over the next 11 years, the details of which were outlined Thursday in letters to the provinces and territories.
The letters also spell out an emphasis on thinking big, focusing on new projects — not renovations, as the Liberals allowed under last year’s short-term plan — and barring the provinces and territories from using federal dollars in place of their own.
Projects must meet national objectives and not just local interests.
“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,” writes Infrastructure Minister Amarjeet Sohi.
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 is predicting for years to come.
Opposition parties say the Liberals haven’t properly defined what’s meant by “economic growth” and “environmental benefits.” The letters suggest those details will be worked out during negotiations.
“It sounds good as you’re writing the letter, but it’s a fluff comment,” said Conservative infrastructure critic Dianne Watts.
The government needs to define sustainable, economic growth, and put the necessary mechanisms in place so everyone is clear on expectations and how to measure them, Watts said.
NDP infrastructure critic Matthew Dube said the spending conditions could prevent cities from funding upgrades to existing infrastructure that remain a top priority for communities.
The letters, released publicly Thursday, set the parameters for negotiations between federal, provincial and territorial governments about funding agreements that need to be in place before the new infrastructure money can flow to projects. Sohi wants to have agreements in place no later than March 2018.
The $33 billion is part of $81.2 billion in the Liberals long-term 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.
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 and those in the territories.
Municipal officials had hoped the Liberals would require the provinces to match federal funding so each side covered 40 per cent of costs, leaving the remaining 20 per cent to cities.
In a statement, the Federation of Canadian Municipalities called on provincial governments to match federal funding, with the thinking being it would help cities more easily cover the lifetime costs to operate and maintain new roads, bridges and water treatment facilities, once construction is finished.
The statement, from FCM president Jenny Gerbasi and Edmonton Mayor Don Iveson, the chairman of the group’s big city mayors’ caucus, also called for more clarity around green funding — specifically the notion of a “fair balance” between municipal and provincial projects.
Sohi’s letters also prod provinces to more quickly identify projects for funding under an infrastructure program set up under the previous Conservative government, and under the first phase of the Liberal infrastructure plan, which the parliamentary budget watchdog has said is behind on spending.
A Senate committee report on the government’s infrastructure program called on the Liberals to release all details about funded projects to help the public better understand how each meets the government’s stated goals of creating good, well-paying jobs and delivering sustained economic growth.
The finance committee recommended crafting a long-term infrastructure strategy to guide investments and focus spending on areas of need, such as broadband internet access for rural, Northern and Indigenous communities, to help meet economic growth targets.
“Infrastructure spending must be based on sound planning decisions and have demonstrable concrete benefits,” says the report, released Thursday.
“If it (the government) wishes to achieve the economic growth objective it set for its infrastructure spending, the government must fund appropriately targeted projects.”