Federal budget details slower than expected trickle of infrastructure money
Tuesday's budget showed more than $3.8 billion from Phase 1 of the Liberal's infrastructure plan, which was supposed to be spent by the end of the month, won't be totally out the door until at least 2021. For the second phase of spending, $3 billion won't be spent until 2025
OTTAWA—New figures in this week’s federal budget suggest billions of dollars from the Liberal government’s vaunted infrastructure program now won’t be spent until after Canadians go to the polls next year.
The sluggish pace of federal infrastructure spending has been a persistent burr under the saddle of a government that rode to power on a promise to ramp up spending for roads, bridges, community centres, transit and water systems to stimulate the economy.
Tuesday’s budget showed more than $3.8 billion from Phase 1 of the plan—which was supposed to be spent by the end of the month—won’t be totally out the door until at least 2021.
The second phase of spending, which is still subject to negotiations with the provinces and territories, has also seen its funding moved around: the government now says more than $3 billion won’t be spent until at least 2025, with the majority of that spending to take place in 2028.
And that might not be the end of it, since the budget also warns that further adjustments may have to be made over time.
A spokesman for Infrastructure Minister Amarjeet Sohi says the new numbers reflect when the government expects to receive expense claims from cities and provinces, a process that often creates a lag between when work takes place and when the federal money is spent.
In some cases, the government won’t receive receipts until after a project is completely finished. In other cases, projects are delayed because of labour strife, bad weather or other factors beyond Ottawa’s control.
Sohi spokesman Brook Simpson said the budget changes reflect that reality.
“It is not a reflection of project activity, which is well underway on the majority of the more than 4,000 projects Minister Sohi has approved, and which the Bank of Canada has noted are contributing to the country’s economic growth.”
The Liberals hope to sign funding agreements by the end of this month for $33 billion in upcoming infrastructure spending overseen by Sohi, and have also asked provinces to allocate unspent cash from a fund set up by the previous Conservative government.
The budget shows that just over $1 billion from Conservative funds is being delayed until after next year’s election, with a further $2.4 billion scheduled for beyond 2023.