Crumbling infrastructure could bring more revenue

Federal government looking for long-term solutions to infrastructure deficit

Municipalities should play a lead role in fixing crumbling streets and old infrastructure, but right now they do not have the powers and revenues to adequately do so, says transit activist and Manitoba Liberal candidate Paul Hesse. Dylan Hewlett

After a federal election campaign noticeably silent on urban issues, the newly elected majority Conservative government may be getting ready to heed the demands of struggling municipalities across Canada.

“If we have vital communities, that’s what makes a vital country,” said Hans Cunningham, president of the Federation of Canadian Municipalities (FCM), a federal lobby group that works on behalf of Canadian cities.

“And we think the federal government is starting to see things that way.”

In the 2011 federal budget tabled shortly before the government fell, the Conservatives pledged to work with provinces, territories and the FCM to “develop a long-term plan for public infrastructure.”

That long-term strategy will likely involve negotiating an extension to some of the revenue transfers found in the $33 billion Building Canada Plan (BCP), established in 2007.

During the campaign, the FCM released an urban election platform calling for an extension of those funds past their current 2014 expiry date.

“As communities, we will grasp at almost any straws because we are in a really difficult position,” said Cunningham, referring to shrinking resources for cities that must rely on limited property tax revenues in the absence of income or consumption-based taxes.

The BCP created several new funds for municipalities, including a Gas Tax Fund and GST rebate.

The Conservative government has already committed to permanently extend the Gas Tax Fund, which transfers about five cents per litre to provinces for their cities, beyond the 2014 expiry date.

However, a significant chunk of the BCP funds are set to run dry, including $1.2 billion per year in infrastructure funding through the Building Canada Fund, according to the FCM.

Couple this with $20 billion in municipal costs associated with new federal waste water regulations and the future is looking pretty grim unless other levels of government step up to the plate, according to Paul Hesse, transit activist and Manitoba Liberal candidate in Fort Rouge.

“We’re talking about crumbling streets, old infrastructure and a dysfunctional transit system,” said Hesse. 

“Municipalities should play a lead (role) but right now they don’t have the powers and revenues to truly be able to solve that on their own.”

Others are more cynical about extending BCP funds, claiming that municipalities have consistently squandered revenues meant for infrastructure maintenance on politically expedient new projects.

“The problem with infrastructure in this country is that there is sexy infrastructure and there is ugly infrastructure,” said Brian Kelcey, former budget advisor to Winnipeg mayor Sam Katz.

“And Canada’s mayors tend to use the need to fix up the ugly infrastructure as a way of leveraging money from the federal government to pay for the sexy infrastructure.”

Although Kelcey believes federal support is necessary, he cited a series of Winnipeg “wish-list projects” that received federal cash, including the Southwest bus rapid transit (BRT) line.

He added that the federal government needs to put stricter conditions on measures in the BCP if it is to extend the plan past 2014.

“You can’t really have an effective BRT network if buses coming off the BRT corridor suddenly slam into a pothole,” he said.

If we have vital communities, that’s what makes a vital country. And we think the federal government is starting to see things that way.

Hans Cunningham, president, Federation of Canadian Municipalities

What an extension of federal support will look like in the coming years, and what conditions will be placed on the funds, remains to be seen.

Communications staff for Denis Lebel, the new federal minister of Transport, Infrastructure and Communities, would not comment on any future plans.

“At this time, we cannot speculate on the future of federal support for municipal infrastructure,” wrote communications officer Dominique Langlaisin in an e-mail after The Uniter made several attempts to reach the minister by phone.

Renewal in Winnipeg?

Although $62.9 million of Winnipeg’s 2011 capital budget was made up of federal funding, a significant portion of that money was one-time revenue for an extension of the Chief Peguis Trail.

The remainder, which came mainly from the Gas Tax Fund, is not nearly enough to bring down Winnipeg’s staggering infrastructure deficit, according to St. James-Brooklands councillor Scott Fielding, who chairs Winnipeg’s standing policy committee on finance.

“We need to invest more in infrastructure, there’s no doubt about it,” he said, adding that the province, more so than the federal government, is obligated to assist the city.

Fielding wants to receive one per cent of Manitoba’s provincial sales tax, which would amount to about $270 million in annual revenue.

He added that the city has done its share to moderate spending by using public-private partnerships to bring down construction costs and by strategically reviewing its spending.

“The province has shirked their responsibilities,” said Fielding. “We think it (one per cent of PST) is a reasonable proposal.”

However, Brian Kelcey insists that receiving the one per cent is only feasible if the city adjusts its attitude toward the province.

“They (the city) haven’t offered anything except for the vague assurance that the money might be spent on infrastructure,” he said.

“They have also done nothing to bring the province into that transaction or to acknowledge that the Manitoba government is in a financial deficit position of its own.”

Published in Volume 65, Number 26 of The Uniter (June 2, 2011)

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