Summative Evaluation Report: ICP Final Report 2010-10-26 - Findings - Program Relevance

4.0 Findings – Program Relevance

4.1 Extent of continued need for a program similar to the ICP (cost-shared, federal/provincial/municipal infrastructure projects)

Multiple lines of evidence (interviews, document review and surveys) demonstrated that there is a continued need for a program similar to the ICP. All categories of interviewees stressed that no single level of government has the capacity to address the "infrastructure deficit" on its own. As evidence of a continuing need, representatives from INFC, FDPs and MC members discussed the fact that subsequent infrastructure programs continue to be over-subscribed.

Cost-sharing:

Interviewees expressed strong support for a cost-shared approach for municipal infrastructure projects. However, interviewees did not all agree when it came to the method of allocating funds. Several municipal interviewees and other stakeholders noted that infrastructure challenges would be better served through longer-term funding commitments and be better guided by a policy framework that would provide municipalities with more predictable revenue streams to support longer term capital plans for local infrastructure priorities, such as the Gas Tax model. While municipalities and their associations are very appreciative of the federal / provincial / territorial support, they cautioned that application-based programs do not necessarily "support rational, publicly approved long-term planning by municipalities." Some municipal interviewees went on to say that the application-based approach has the potential to distort priorities at the local level, since municipalities are sometimes faced with seeking support for a project simply because it most closely matches program eligibility criteria, rather than what the project being urgently needed by the municipality. One of the inherent risks to a competitive application process is that resource allocation decisions that have a direct impact on municipal finances are effectively being made by other levels of government. On the other hand, an application-based approach allows the federal government to ensure that federal priorities are adequately considered and that funds are being directed to these priorities.

It was also noted by interviewees that the application-based approach such that used with the ICP was best suited for medium-large scale strategic investments. Transaction costs for smaller projects were deemed to be too high in some respects, and therefore a direct transfer approach or other streamlined approach may be preferable to address their specific needs.

The need for municipal infrastructure funding is also expressed in a report by the Federation of Canadian Municipalities provided to the federal Minister responsible for Transport, Infrastructure and Communities in 2006, and in a Statistics Canada study "From roads to rinks: Government spending on infrastructure in Canada" released in September 2007.

"Municipal governments …. are facing a fiscal squeeze, caught between a growing range of responsibilities and inadequate financial resources. This squeeze has caused the deferral of much-needed investments in infrastructure, leading to a physical decay that harms the capacity of our cities and communities to compete in the global economy and contribute to prosperity."¹

"Since 2000, governments have increased their infrastructure capital more than at any time since the 1960s and 1970s. However, the growth has not been strong enough to prevent more and more signs of wear in our infrastructure. This is due to cuts in the 1990s when governments were grappling with significant budgetary deficits, as well as many of the assets built in the post-war infrastructure boom reaching the end of their life span."²

When asked to identify the key infrastructure needs within their communities, survey respondents noted the need for improved road infrastructure, potable water infrastructure and wastewater infrastructure most frequently. These priorities continue to be well aligned with the types of infrastructure projects supported by the ICP.

4.2 Extent of program alignment with current INFC and Government of Canada Priorities

The stated objectives of the program were improving Canadians' quality of life through investments that:

1. enhance the quality of our environment;
2. support long-term economic growth;
3. enhance community infrastructure; and
4. build 21^st century infrastructure through best technologies, new approaches and best practices.

In its 2010-2011 Report on Plan and Priorities, INFC articulated its strategic outcomes as follows: "provinces, territories and municipalities have federal financial support for their infrastructure; funding for quality, cost-effective public infrastructure that meets the needs of Canadians in a competitive economy, a clean environment and liveable communities is provided; and construction-ready infrastructure projects are provided with federal funding support."

The stated objectives of the ICP are clearly reflected in these strategic outcomes.

Current federal government infrastructure priorities are reflected in the Building Canada Plan, which is Canada's largest infrastructure development program in over half a century. The $33 billion national plan paves the way for efficient and sustainable public infrastructure. As with the ICP, the Building Canada Plan supports economic growth and productivity, improves Canada's competitiveness, and facilitates the movement of people and goods. There is alignment of the ICP objectives with current government priorities as stipulated in the Building Canada Plan.

^[1] Federation of Canadian Municipalities, Submission to Transport, Infrastructure and Communities Canada, Immediate and Long-term Federal Funding Support for Infrastructure, September 8, 2006.

^[2] From roads to rinks: Government spending on infrastructure in Canada, published in the September 2007 Internet edition of the Canadian Economic Observer, Vol. 20, no. 9