Fund announced in last years budget starts rolling out
GORMLEY, Ont.—Prime Minister Stephen Harper lifted the veil Thursday on a $14-billion infrastructure fund that will offer provinces, cities and smaller communities access to eagerly anticipated federal money over the next 10 years.
The New Building Canada Fund, which was first announced in last year’s federal budget, will be available starting this spring.
It is part of the larger $53-billion New Building Canada Plan, which also includes a Gas Tax Fund and a funding model for public-private partnerships.
“Provinces, territories and municipalities will now have unprecedented access to predictable, sustainable federal infrastructure funds for a decade,” Harper said during a visit in the community of Gormley, Ont., north of Toronto.
“This will allow those whose job it is to make infrastructure decisions to plan those decisions with assurance over the long term.”
Harper said his government has established a framework for the fund, which details how much money the government will give out and what kinds of projects it will invest in.
The federal infrastructure minister will now work with provinces, territories and municipalities to “seek input on outstanding parameters” such as the application process for the fund.
The Federation of Canadian Municipalities greeted Harper’s announcement with muted enthusiasm and said many questions remained about how the fund would be used to meet local needs.
“Municipalities own a significant majority of public infrastructure and for a fund that will span the next decade, we must be sure that it is used accordingly,” said federation president Claude Dauphin. “This is the only way to ensure that local governments can address infrastructure challenges in their communities.”
Dauphin added there were concerns the fund’s rules could force municipalities to carry a larger share of infrastructure costs in the future and that local roads may not be eligible for cash under the fund’s framework.
The prime minister didn’t go into the nitty gritty details in front of his audience on Thursday, but documents detailing the fund said $4 billion is being set aside for projects of “national significance” which are a federal priority.
The fund’s remaining $10 billion has been dedicated to infrastructure and community projects in the provinces and territories— with $1 billion of that earmarked for communities with populations under 100,000.
Provincial highways, major roads and public transit were highlighted as priorities, with Ottawa promising to contribute up to half of total project costs. For most other projects, the federal government will pitch in one-third of total costs.
When a project involves the for-profit private sector, the maximum federal contribution under the fund will be 25 per cent, while the same amount will apply to projects that are public-private partnerships.
Meanwhile, projects with capital costs of more than $100 million which apply for the fund will be screened to see if they might be appropriate for public-private partnerships, something Harper said he wanted to see more of.
Under the fund, each province and territory will receive $250 million plus a per capital amount over 10 years that is calculated based on the 2011 Census.
The funding framework means there will be a reduction in the annual average funding for most provinces and territories as they will be getting their cash over ten years rather than the seven years the fund’s predecessor was spread over.
But the government said that when a Gas Tax Fund is factored in, the total annual funding will be “very similar” to what each province and territory is used to receiving.
The fund gives provinces, territories and municipalities the flexibility to decide which projects it will seek money for, but the government has put forward a list of categories eligible for cash, which include wastewater management, green energy, airports and post-secondary infrastructure that supports advanced research.