Binkley Report

Hope for Canadian cities

By Alex Binkley
True North Perspective

9 December 2011 — It’s been a long time coming, but Canadian cities finally have reason to hope they will be getting the kind of financial assistance they need to keep the water flowing and commuters moving.

It won’t be an overnight fix, says Berry Vrbanovic, President of the Federation of Canadian Municipalities (FCM). However, the process has begun.

The FCM and the federal government have set up a three-step process to determine by next fall what municipal infrastructure needs fixing or replacing and how best to pay for all the work.

The government “is committed to fixing the cracks in our country’s economic foundations, and making sure that Canadians have the infrastructure they need to build their businesses and raise their families,” he added. “This is a promise to put aside band-aid solutions, and find the cure for the infrastructure deficit once and for all.”

A decade ago, the state of Canada’s cities rated little attention on the federal scene. Then a study showed that cities were key national economic drivers and to fulfill that role, the cities had to be inviting and functional places to live. The message sunk in with the former Martin government and has been embraced by the Harper government.

In recent years, Ottawa has gone from ignoring municipal infrastructure woes to providing badly needed funding through a share of the federal gas tax, worth $2 billion a year, and by making municipal projects eligible for the $33 billion Building Canada Fund. With the Fund scheduled to expire in 2014, FCM worried their immense backlog of projects wouldn’t get completed.

In his Nov. 8 financial update, Finance Minister Jim Flaherty buoyed the municipalities by committing to legislation making the gas tax transfer permanent along with promising a long term program for rebuilding Canadian cities and towns.

Infrastructure Minister Denis Lebel says the plan will identify the infrastructure priorities. “Working together with partners, we will take stock, identify opportunities, and build the foundation of a new infrastructure plan that supports economic growth and job creation.”

Vrbanovic said FCM had fairly extensive dialogue with Flaherty’s office about the extension of the Building Canada Fund. Back in 2007, a study showed a backlog of infrastructure repairs of $123 billion with another $115 billion in new facilities required, he pointed out.

“We’ve made inroads in that list with the gas tax and Building Canada Fund along with municipal initiatives,” he said. “The biggest question will be setting priorities and determining how long a time commitment to funding is needed.”

FCM keeps reminding Ottawa and the provinces “the infrastructure program is a clear demonstration of what the three levels of government can accomplish by working together,” he noted.

Governments also have to agree on a common format for accounting for municipal assets and the cost of replacing them, he added.

The Canadian Construction Association has been working with FCM on standardizing municipal infrastructure accounting, he said. “We have to determine the current value and estimated replacement value for the assets.”

CCA spokesman Bill Fereira says the association doesn’t expect the results of its review of municipal infrastructure needs until early Next Year. “We have to look at the data to make sure it makes sense and is consistent.”

He noted that federal stimulus programs employed 1.26 million Canadians during the recession in residential and nonresidential construction along with supply company jobs.

By next spring, federal, provincial and municipal officials will complete their review of past infrastructure investments and initiatives. During the spring and summer, they work at getting everybody on the same page on infrastructure planning and financing. The last step will cover setting “the broad principles and future directions for public infrastructure in Canada.”

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