The New Building Canada Plan
On February 13, 2014, the Government of Canada announced the New Building Canada Plan - a $47 billion infrastructure funding program.
The new Building Canada Fund will define the landscape of federal investments into municipal infrastructure for the next decade. Elements of new Building Canada Fund may have significant implications for our cities and communities apply for, and access the Fund.
A Fair Share for Municipalities
The new Building Canada Fund includes $14 billion for provincial/territorial and municipal infrastructure projects. Yet the Fund is vague on where this investment will be targeted. These investments must recognize that municipalities own over 60 per cent of Canada's core economic infrastructure and target investments accordingly.
Elimination of Local Roads as an Eligible Category
In many communities, local roads form a significant percentage of the municipality's total infrastructure stock. No other asset provides a more direct benefit to local economies, linking workers to their jobs and Canadians to their families and communities. By making local roads ineligible under the Building Canada Fund, municipalities will have lost access to an important source of shared investment. While the new Building Canada Fund allows municipalities to put forward "major roads" as potential projects, the criteria by which the federal government will assess the merits of these projects remains unclear.
The P3 Screen: One-size-fits-all Solutions
Under the new BCF, all projects valued at over $100 million will be required to undergo P3 screening by the federal government's P3 agency. The decisions of this agency will be final and binding, regardless of the wishes of local communities.
Across the country, local governments are increasingly turning to public-private partnerships as viable alternatives to financing public infrastructure. These decisions are the result of detailed and complex discussions that take into account the local needs and expertise of our cities and communities. Decisions on how to build and finance local infrastructure must remain the prerogative of local communities. A one-size-fits-all solution cannot address the unique needs and challenges of each and every community.
Municipal Share Rule Changes
Cost-shared programs between all orders of government, such as the Building Canada Fund, operate under the principle that each government pays their fair share. For municipalities, that collect just 8 cents out of every tax dollar paid in Canada, allocating their share of project costs requires significant long-term planning. Municipalities make use of every revenue source available to them to build modern, efficient infrastructure. New rules under the new Building Canada Fund would limit a communities' ability to leverage Gas Tax Fund investments toward these projects. This change increases the burden on local governments already under stress from the limited revenue options available to them.