Canadian cities ask for long term infrastructure plan from the federal government

In 2007 the Federation of Canadian Municipalities (FCM) commissioned McGill University to survey Canadian municipal governments to determine their infrastructure needs.   Based on the responses to the survey, FCM estimated that the municipal infrastructure deficit in Canada in 2007 was C$123 billion.  The FCM broke this down by key infrastructure categories,

• water and waste water systems - $31 billion
• transportation - $21.7 billion
• transit - $22.8 billion
• waste management - $7.7 billion
• community, recreational, cultural and social infrastructure - $40.2 billion

New Infrastructure Needs

The FCM McGill University survey also attempted to estimate new infrastructure needs, defined as all infrastructure that needs to be expanded or built to meet the changing needs of a community for demographic, socio-economic, environmental and other related reasons. Capital investments required to provide an enhanced level of service or meet new regulations would also be included.  The FCM estimated the cost of new infrastructure to be C$115 billion.

FCM 20 year infrastructure plan submitted to the federal government

November 13 the FCM submitted a long term municipal infrastructure plan (LTIP) entitled The Road to Jobs and Growth: Solving Canada's Municipal Infrastructure Challenge to the federal government as its contribution to the federal government's six months of consultations on long-term infrastructure planning.

The FCM plano calls for an increase in annual federal investments in municipal infrastructure  from $3.25 billion to $5.75 billion over 20 years.  This would bring funding, as a percentage of GDP, in line with historical levels from the 1950s to the mid-1970s.  To achieve this FCM is proposing maintaining the existing permanent gas tax transfer, but with cost-of-living indexing.  In addition it is proposing a new federal program that would matching investments from municipalities and provinces. 

The FCM plan also places great emphasis on encouraging public-private-partnerships (P3) and sustainable development.

The recommendations include

1. Funding should be long-term and predictable
Commit funding to LTIP for 15 to 20 years with five-year planning cycles.

2. Invest to leverage additional funds
An annual federal investment of $5.75 billion in LTIP will leverage an additional $7.5 billion in new provincial, territorial and municipal investments. These investments are on top of the $12 to $15 billion that municipalities already invest each year in local infrastructure and billions more contributed by provincial and territorial governments.

3. Renew and improve the Gas Tax Fund and the Building Canada Fund
a. Direct 100 percent of the Building Canada Fund (BCF) to municipal infrastructure.
b. Protect the current purchasing power of the Gas Tax Fund (GTF) and BCF against inflation.

4. Core Economic Infrastructure Fund
a. Invest $2.5 billion annually in a Core Economic Infrastructure Fund (CEIF), to be matched by municipal governments and by provincial and territorial governments, for a total program value of $7.5 billion a year.
b. Focus CEIF on core economic infrastructure, such as transit, roads, bridges and other municipal transportation infrastructure, and on water, wastewater and storm-water infrastructure.

5. Reduce gridlock, build transit
To reduce congestion and improve local mobility, allocate the $1 billion Cutting Commute Times component of the CEIF to transit.

6. Meeting new needs
Prioritize projects that meet new federal wastewater regulations.

7. P3s and alternative financing
a. Ensure the majority of LTIP is delivered through program models that maximize predictability and certainty. This increases municipal financing options, especially for P3s.
b. Create a “P3 screen” that requires all municipal projects with a value of $200 million or more that are receiving federal funding to develop a thorough business case that includes analysis on the viability of P3s.

8. Innovative Infrastructure
a. Create the Centre for Municipal Infrastructure Innovation and Sustainability (CMIIS) to help build the capacity of municipalities to improve asset management and innovative infrastructure practices.
b. Renew and expand the National Guide to Sustainable Municipal Infrastructure (InfraGuide).
c. Create the Innovative Infrastructure Fund (IIF) by expanding the FCM Green Municipal Fund endowment to make revolving loans and grants to municipalities for innovative, sustainable infrastructure pilot projects.

Canada's cities call for a 20-year infrastructure plan

Last week leaders from 22 of the largest municipalities in Canada met in Ottawa for the Big City Mayors' Caucus to discuss what the cities need from the Federal Government in next Spring's budget..  They praised the Federal government for investing in Canadian cities through successful programs such as the Gas Tax Fund, the Building Canada Fund and the Economic Action Plan stimulus funding but are concerned that most of this funding expires by 2014.  They are even more concerned about that the state of municipal infrastructure in many Canadian cities represents a significant threat both to economic development and to quality of life. Their first priority is to modernize transportation networks. Traffic gridlock costs the economy $10 billion a year. One out of every four roads is congested, and 50% need immediate repair.  The mayors said that only 8 cents out of very tax dollar currently goes to municipalities.

The municipal leaders said that they support the long term infrastructure plan recently submitted to the federal government by the FCM which asks the Federal government to commit $5.75 billion annually to municipal infrastructure.  THE FCM estimates that that level of committment by the Federal government would leverage an additional $7.5 billion annually from other sources including provincial, territorial, and municipal governments.