Gas Tax Fund

Topic

The federal Gas TaxFund is a permanent, legislated and indexed funding program that currently provides $2.2 billion annually for municipal infrastructure. It is Infrastructure Canada’s most popular program with municipalities across the country and the municipal sector has made regular appeals to deliver more federal funding under this type of transfer-based program

Key messages

• The federal Gas Tax Fund provides over $2.2 billion in stable and predictable funding to communities of all sizes across the country for their local priorities.
• Municipalities are able to pool, bank, and borrow against this funding, and the GTF can be used to support projects in 18 different categories. Each year, the program supports about 4,000 projects in 3,600 communities.
• Budget 2019 provided a one-time transfer of $2.2 billion that doubled the Government’s annual commitment to municipalities across the country.
• The top up is helping address the short-term priorities and much-needed infrastructure funds for communities of all sizes, including First Nation communities, across Canada.

Background

• The Gas Tax Fund was established in 2005 and originally designed to provide municipalities with $5 billion in predictable funding over five years. The program was extended and legislated as a permanent source of federal infrastructure funding for municipalities. The federal Gas Tax Fund (signed in 2014) has been indexed at two per cent per year, to be applied in $100 million increments. From 2014 to 2024, the GTF will provide municipalities with close to $22 billion in infrastructure funding.
• Each fiscal year, Infrastructure Canada makes two equal payments to each signatory. The first payment generally occurs in early summer, and the second in the fall.
• Allocations are calculated on a per capita basis for provinces, territories and First Nations, and provide a base funding amount for smaller jurisdiction (Prince Edward Island and each territory). The GTF allocation is indexed at 2% per year and is paid out in $100 million increments (roughly every two years). Jurisdictional allocations are adjusted every 5 years corresponding with new census population data. The 2019-2024 allocations have been communicated to agreement signatories and posted to Infrastructure Canada’s website.
• Eligible categories of investment are broad and include public transit, local roads and bridges, drinking water and wastewater infrastructure, community energy systems, culture, recreation, disaster mitigation and capacity building.
• It should be noted that investments in energy efficiency upgrades for municipal buildings are eligible under the community energy systems category.
• [redacted]

Canada Infrastructure Bank

Topic

The Canada Infrastructure Bank is a Crown corporation that represents a new, innovative way to fund and finance new infrastructure projects and foster partnerships between governments and private and institutional investors.

Key messages

• The CIB helps public dollars go further by using federal support to mobilize private-sector investment, allowing more projects to be built.
• The CIB is working with provinces, territories, municipalities and is currently engaged in more than 25 projects across Canada and across key sectors.
• Large, transformative projects take time to develop and need expert advice to plan and structure complex projects that also meet public policy goals. 
• The CIB model is about thinking big and working with other levels of government over the long term to deliver more infrastructure for Canadians, and to reduce the burden on taxpayers.

Background

• The Canada Infrastructure Bank is a Crown corporation established in June 2017 and became operational at the end of 2017. The Corporation is headquartered in Toronto and the Board reports to Parliament through the Minister of Infrastructure and Communities.
• The legislated purpose of the Bank is to invest, and seek to attract investment from private sector investors and institutional investors, in infrastructure projects in Canada or partly in Canada that will generate revenue and that will be in the public interest by, for example, supporting conditions that foster economic growth or by contributing to the sustainability of infrastructure in Canada.
• The Government is responsible for establishing the overall policy direction and high-level investment priorities to guide the Bank’s activities. Since launching, the CIB has been actively working with all orders of government on their infrastructure plans, as well as potential investors to identify projects for potential investment. Its first investment was announced in August 2018 and has reached financial close.
• In addition, the CIB is developing the five-year forward looking National Project Inventory tool to promote transparency and long-term planning and showcase projects to potential investors. The Bank is focused on trade and transportation, public transit, broadband and green and clean power sectors, where the CIB partnership model makes sense to partner on projects that advance the public interest.
• The Government will provide the CIB with $35 billion over 11 years, as needed, to participate in infrastructure deals in new and innovative ways. The CIB is expected to manage its portfolio so that the total fiscal expense remains under $15 billion. The CIB will work with project sponsors who will decide when to disclose information publicly.
• [redacted]
• To date they have committed $3.6 billion to four projects: REM, GO On Corridor, Contrecoeur new container terminal and Mapleton water and wastewater treatment facility. Over the last two fiscal years, the CIB has drawn down $514.9 million in capital to support investments and $40.4 million for its operations and to build core internal capacity in such areas as executive leadership and management, financial and accounting systems, legal services, IT and communications.

Parliamentary Budget Officer

Topic

Parliamentary Budget Officer reports on the Investing in Canada Plan

Key messages

• Infrastructure Canada has been working with the Parliamentary Budget Officer to ensure that he has the most up-to-date information available for its reports. This collaborative approach supports the Parliamentary Budget Officer in his mandate to accurately report to Canadians on how federal infrastructure funding is being spent and the results of these investments.
• Infrastructure Canada’s website provides Canadians with information about programs and projects funded under the Investing in Canada Plan. This includes information on where projects are being built, the number of projects that have been approved, and the amount of funding that has been approved to date.
• We have already committed over $65.1 billion in federal funding and invested in over 52,000 projects from coast to coast to coast, most of which are either underway or completed.
• These projects are creating good jobs and supporting our nation’s ongoing transition to a clean growth economy. And we are building on those successes and continuing to work with all partners to fully implement the plan.

Background

• At the request of Parliamentarians, the PBO has been closely monitoring the implementation of the Investing in Canada Plan and has written a number of high-profile reports about the Plan. Over the course of four reports between March 2018 and April 2019, the PBO has raised various issues about the Plan.
• March 29, 2018 – Status Report on Phase 1 of the New Infrastructure Plan
  • This report noted that there have been delays in federal infrastructure spending, project identification, and project start dates. As a result of these delays, the PBO indicated that the expected economic benefits of Phase 1 of the Plan were lower than originally forecast by the Government.
  • The report also noted that a number of federal departments and agencies did not respond to the PBO’s request for information about their infrastructure spending. This lack of response was highlighted in the report and contributed to the narrative that the Plan was not well organized.
  • On April 19, 2018, the then Minister of Infrastructure and Communities held a media event and provided a complete update on the status of the Plan.
  • The Minister also released the Investing in Canada Plan: Canada’s Long Term Infrastructure Plan, which provided a detailed description of the Plan.
  • Following the report, the department also posted a table showing project approvals, funding committed and reimbursements claimed for all programs under the Plan. This table is updated regularly – at least quarterly for all departments.
• August 22, 2019 – Status Report on Phase 1 of the Investing in Canada Plan
  • This report reiterated previous findings pertaining to delay in federal funding compared to Budget 2016 timeline, including the lower than forecast economic benefits. However, the report added that these delays were largely attributable to implementation delays by provincial and municipal governments.
    • Prior to the release of this report, INFC worked closely with the PBO and participating departments to ensure that the PBO was provided with all requested information, including the development of an information request form that conformed to the way project information is provided to INFC for the purposes of the Investing in Canada Plan geo-map.
    • As a result of these efforts, there was no suggestion that information was not provided to the PBO.
    • This report triggered conversation about which level of government is responsible for the pace at which infrastructure spending is committed.
• March 13, 2019 and April 9, 2019 - Infrastructure Update: Investments in Provinces/Territories and Municipalities
• In two reports, the PBO examined capital investments made by provinces, territories and five municipalities (Toronto, Ottawa, Calgary, Edmonton, and Montreal) with the objective of identifying the incremental impact of the Plan on their spending.
• For the purposes of these reports, the PBO used consolidated capital spending figures for provinces, territories and municipalities. These figures include significant amounts of spending that are not covered by federal programs, including hospitals and schools.
• The department has been working with provincial and territorial officials to develop a robust methodology to determine whether displacement has occurred. Given the long lifespan of the Plan, it will not be possible to determine whether displacement is occurring for a number of years.

Smart Cities Challenge

Topic

The Smart Cities Challenge encourages communities of all sizes, including Indigenous communities, to use data and connected technology to achieve meaningful outcomes for their residents and improve the quality of life for all Canadians.

Key messages

• The Challenge is a great example of community-driven innovation, where residents are being engaged to define their needs and identify opportunities to address local issues using data and connected technology. In response to the Challenge, communities across Canada have rallied around common causes.
• The process has been positive. Winners of the first round were announced in May and are setting ambitious projects in motion. Of the non-winning finalists, most have indicated their intention to continue with their projects in some way and to pilot smart technology solutions. Some of the communities who participated are also connecting with other communities with similar challenges to share lessons and help each other innovate.
• The positive effects of the Challenge are being amplified further through the Smart Cities Community Support Program, which is providing resources and capacity support to communities across the country, regardless of whether they apply to the Challenge or not.

Background

• The Smart Cities Challenge is an experimental program that encourages communities to connect with their residents to adopt new and innovative approaches to solving civic issues. This pan-Canadian challenge is open to communities of all sizes, including rural and indigenous communities.
• The Challenge is focused on outcomes, encouraging communities to define the outcome(s) that they aim to achieve through the implementation of a “smart cities approach”, which is defined as one that uses innovation, data and connected technology to improve the lives of residents.
• In order to encourage communities to generate bold and innovative ideas, Infrastructure Canada used a challenge-model program. Finalists competed in 3 prize categories for one of $50 million open to all communities, two prizes of $10 million open to communities with populations under 500,000 people and one prize of up to $5 million open to all communities with populations under 30,000 people. The Smart Cities Challenge Team also continues to collaborate with the Department of Indigenous Services to share lessons learned and contribute to the development of the new Indigenous Homes Innovation Initiative.
• In the first round of the Challenge, Infrastructure Canada received 130 applications from more than 225 communities in every province and territory, from small towns to large cities and Indigenous communities. 44% of the applications came from small and rural communities. Also, 24 of the applications (18%) came from Indigenous communities, and the application from Nunavut is supported by the 25 communities of the territory.
• Winners of the first competition of the Challenge were announced on May 14, 2019. They are:
  • Bridgewater, NS - $5 million prize - Addressing energy poverty through data and connected technology; restoring control to residents over their energy costs.
  • Nunavut Communities, NU - $10 million prize - Strengthening resilience and improving mental health among young Nunavummiut through community Makerspaces.
  • Guelph and Wellington County, ON - $10 million prize - Becoming Canada’s first Circular Food Economy by creating new circular business opportunities, transforming food waste into a resource and increasing access to affordable, nutritious food.
  • Montreal, QC - $50 million prize - Improving mobility for neighbourhood residents via a multi-modal transportation app and electric vehicle service. Heightening food security through an integrated digital platform to manage food inventory, sales, donations and delivery.
• Additionally, Infrastructure Canada launched the Smart Cities Community Support Program to support not-for-profit organization(s) that will provide advisory and capacity building services to communities to help develop smart cities approaches and strong proposals for the challenge. Evergreen, a non-profit organization, will receive $4.6 million over two years, to deliver activities under this program.
• Infrastructure Canada successfully convened a working group comprised of officials from the Federal and Provincial/Territorial Privacy Commissioners to provide privacy guidance that informed final proposal requirements of the Challenge.

Funding

• Budget 2017 announced $300 million dollars over 11 years to conduct the Challenge, with the expectation of more than one round. Of this funding, $15 million has been transferred in 2019-20 to Indigenous Services Canada to intensify the impact of their Indigenous Homes Innovation Initiative.

PT table

Investing in Canada Infrastructure Program

Data as of February 19, 2020