The Government of Canada has released the 2011 federal budget. Although the primary objective is deficit reduction, several areas have been singled out for increased spending, one of which is infrastructure. The Government says that it recognizes the importance of investment in public infrastructure, for economic development in general, but also for short term employment growth.
In 2007, the Government launched the Building Canada plan, supported by $33 billion in federal funding over seven years. The Building Canada plan consists of a suite of programs to meet infrastructure needs across the country, including:
- Gas Tax Fund and full rebate of the Goods and Services Tax paid by municipalities, which provide predictable long-term funding for municipalities.
- Provincial/Territorial Base Funding Initiative, which provides $25 million per year for each province and territory.
- Building Canada Fund, which supports infrastructure projects across Canada
- Gateways and Border Crossings Fund and the Asia-Pacific Gateway and Corridor Initiative to strengthen trade-related infrastructure.
- Public-Private Partnerships (P3) Fund, the first Canadian infrastructure fund dedicated to P3s
In response to the recession, the Government introduced stimulus initiatives under the Economic Action Plan to increase infrastructure spending during the 2009 and 2010 construction seasons. These projects are expected to be completed by the end of October 2011. It claims to have spent $7.7 billion on almost 8000 projects across the country.
The 2011 Budget makes important investments in public infrastructure and supports the use of public-private partnerships in delivering infrastructure programs and projects.
$2 billion annual investment in municipal infrastructure
To provide greater certainty to provinces, territories and municipalities, the 2011 Budget proposes to legislate a permanent annual investment of $2 billion in municipal infrastructure through the Gas Tax Fund.
The Government believes that Public-private partnerships (P3s) have demonstrated their ability to produce value for taxpayers in the delivery of public infrastructure and plans for Canada to be a leader in P3s. In 2008, the Government established PPP Canada Inc. to increase the effective use of P3s in Canada. From now on, all federal infrastructure projects creating an asset with a lifespan of at least 20 years and having capital costs of $100 million or more, will be subjected to a P3 screen to determine whether a P3 is a suitable procurement option. Federal departments will also be encouraged to consider a P3 approach for other types of project and service procurements.
As a result of these investments, the Government claims that the amount of federal funding available to provinces, territories and municipalities for infrastructure projects will be close to $11 billion in 2010–11, a significant increase over previous years' spending.