The Federal Gas Tax Fund:
Permanent and predictable funding for municipalities
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What is it?
As part of the New Building Canada Plan, the renewed federal Gas Tax Fund (GTF) provides predictable, long-term, stable funding for Canadian municipalities to help them build and revitalize their local public infrastructure while creating jobs and long term prosperity.
Why is it important?
Each year, the federal GTF assists municipalities by providing funding for local infrastructure projects. From coast to coast to coast, the federal GTF is making a difference in all communities across Canada. Every year, municipalities benefit from the financial support and flexibility of the federal GTF. To date, $13 billion has been invested in municipalities through the federal Gas Tax Fund, with close to $22 billion to flow over the next 10 years. Municipalities will now have even more ways in which they can put their GTF funding to work in their communities.
How does it work?
The federal GTF program was originally designed to provide municipalities with $5 billion in predictable funding over five years. However, our Government has made significant improvements to the GTF. It has been extended, doubled from $1 billion to $2 billion annually, and legislated as a permanent source of federal infrastructure funding for municipalities. As announced in Economic Action Plan 2013, the renewed federal GTF is being indexed at two per cent per year, to be applied in $100 million increments, which means that it will grow by $1.8 billion over the next decade.
Funding is provided up front, twice-a-year, to provinces and territories, who in turn flow this funding to their municipalities to support local infrastructure priorities. Municipalities can pool, bank and borrow against this funding, providing significant financial flexibility.
Currently, communities can use the federal GTF towards the following eligible categories:
- public transit
- wastewater infrastructure
- drinking water
- solid waste management
- community energy systems
- local roads and bridges
- capacity building
As of April 1, 2014, communities will be able to use the renewed GTF towards a wider range of projects, which means they will have even more flexibility in the types of projects they fund. In addition to the categories listed above, communities will also be able to use the federal GTF towards:
- local and regional airports
- short-line rail
- short-sea shipping
- disaster mitigation
- broadband and connectivity
- brownfield redevelopment
Under the renewed GTF, allocations to provinces and territories over the first five years of the NBCP (2014-2019) are based on Census 2011 data, as follows:
|Newfoundland and Labrador||$155,298,000|
|Prince Edward Island||$78,000,000|
Specific allocations to municipalities will be determined through federal-provincial-territorial GTF agreements. Allocations for 2019-2024 will be based on Census 2016 data.
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