New infrastructure funding rules unveiled by PM Harper come with strings attached.
New funding rules would cap at 33 per cent the total federal contribution of a project’s cost
OTTAWA — Cities seeking fresh federal government infrastructure dollars may have some unexpected strings attached, based on new criteria unveiled Thursday by Prime Minister Stephen Harper.
The lobby group representing Canadian cities, the Federation of the Canadian Municipalities, said the new criteria came as a surprise and has prompted concerns the government would reduce access to some funds for local roads, as well as imposing new caps on the amount of federal money — from a multibillion dollar infrastructure fund — that could be used for each project.
The new $14 billion Building Canada Fund, spread out over 10 years,
“We are ready to give them visibility.”
ALEXANDRE CLOUTIER, PROVINCIAL INTERGOVERNMENTAL AFFAIRS MINISTER
is slated to be launched on April 1 to replace an expiring infrastructure fund launched in 2007.
While the cities were previously allowed to use more than one source of federal funding, on top of a 33 per cent contribution from a federal infrastructure fund for projects, the new criteria would cap the total federal contribution at 33 per cent of a project’s cost.
“We’re happy about the long-term predictable money,” said Claude Dauphin, president of the federation. “We have 45 days to find solutions to these important concerns.”
In Quebec City, Alexandre Cloutier, the provincial intergovernmental affairs minister, complained that Ottawa had ignored Quebec’s request last October for it’s full share of the infrastructure money in a block, ending the process of disbursing funds project-by-project.
Cloutier said this method is timeconsuming and bureaucratic, adding that if the federal government wants visibility on project it funds in Quebec, “We are ready to give them visibility.”
The Quebec minister also complained the province was kept in the dark before the announcement Thursday, noting it comes just six weeks before the new fiscal year.
The government had introduced the new plan in its 2013 budget, explaining that it was adding new money and improving an existing gas tax revenue sharing fund by opening it up to new projects such as roads and recreational facilities. But these types of projects will no longer be eligible for money from the Building Canada Fund.
Other changes unveiled by Harper on Thursday revealed that a Crown corporation, PPP Canada, could decide whether a project should proceed as a public-private partnership. Cities that decline to take that approach, following a recommendation by the Crown corporation, would lose federal funding.
The previous fund, announced in 2007, required multiple agreements with each province and territory, but a portion of the new $14-billion fund announced in the 2013 budget, is being offered to provinces over the next 10 years without any agreements.
Harper didn’t specifically mention the new conditions that were posted on a federal website at the time of his announcement, but he noted that his government’s funding for infrastructure has been unprecedented, boosting job creation through 43,000 projects across the country.
“Very early on in our government’s mandate, we made the development and improvement of our country’s infrastructure one of the pillars of our economic policy,” Harper said Thursday in Gormley, Ont. “I’m delighted to announce that the framework of our new Building Canada plan is complete and as a result, provinces, territories and municipalities will now have unprecedented access to predictable, sustainable, infrastructure funds, for a decade.”
Although the government has consulted municipalities about the new fund, the cities were taken aback by the new restrictions.
“There are definitely elements of today’s plan that haven’t been discussed in any detail with FCM and that are at odds with our recommendations, and we’ve outlined our initial concerns to the government and will be expecting them to work with us to address those issues,” Dauphin said.
NDP infrastructure critic Olivia Chow said the federal government could be stronger if it wasn’t so afraid to work with others.
“For them to just charge out, to impose their so-called criteria … means that it allows the government to play politics with taxpayers’ money and that’s not acceptable,” Chow said.