1. New INFC Programs and Initiatives
1. National Infrastructure Assessment
2. Green and Inclusive Community Buildings
3. Zero-Emission Buses
4. Permanent Public Transit Funding
5. Ventilation Program
6. Active Transportation
7. Canada Healthy Communities Initiative
2. Auditor General - Audit
8. Office of the Auditor General – Audit
3. INFC Programs and Initiatives
9. Investing in Canada Plan – Status Update
10. Transit Funding
11. Integrated Bilateral Agreements
12. Climate Lens
13. Gas Tax Fund
14. Disaster Mitigation and Adaptation Fund
4. Rural and Broadband
15. Funding for Rural and Northern Communities
16. Broadband Investments
17. Rural Transit
5. Crown Governance
18. Canada Infrastructure Bank
19. Public Private Partnerships
20. Waterfront Toronto
21. Major Bridges
6. Other Priorities
22. Economic Impacts of Infrastructure Investments
23. Construction Sector Update
24. Programs Administered through the Federation of Canadian Municipalities
25. Operational Funding for Municipalities and Transit - Safe Restart Agreement

I. New INFC Programs and Initiatives

1. National Infrastructure Assessment

Topic

On March 16, 2021, the Minister of Infrastructure and Communities launched an engagement process about Canada's first-ever national infrastructure assessment.

Responsive lines

• The Government has committed to conducting the country's first-ever National Infrastructure Assessment to inform long-term planning toward a net-zero emissions future.
• The Assessment will provide independent advice based on data, varied expertise and engagement, on how infrastructure investments can best achieve the government's core objectives.
  • Long-term infrastructure planning is considered a global best practice and have already been implemented in the United Kingdom and Australia.
• We have already launched an engagement process to seek feedback from other governments, Indigenous groups, and the private sector about conducting the Assessment. Once this engagement concludes, we will move on the next steps of this process.

Background

As part of Canada's strengthened climate plan, A Healthy Environment and a Healthy Economy, the Government of Canada announced its intention to conduct Canada's first-ever national infrastructure assessment starting in 2021, to identify the needs and priorities for Canada's infrastructure, and plan for a net-zero emissions future by 2050. This work will build on the Government's 12-year Investing in Canada Plan.

Long-term infrastructure planning is a global best practice recommended by the IMF and OECD and has been adopted in other advanced economies, including Australia and the UK.

The first milestone for the National Infrastructure Assessment was the release of Building the Canada we want in 2050: Engagement Paper on the National Infrastructure Assessment. It underscored that the Government of Canada's infrastructure investments are focused on achieving three core objectives: promoting economic growth, job creation and competitiveness; tackling climate change and increasing resilience; and improving social inclusion and quality of life for all Canadians.

To achieve these objectives, the Engagement Paper announced that the assessment will focus on three priorities:

• Assessing infrastructure needs and establishing a long-term vision: The assessment will allow for a comprehensive, evidence-based and expert-driven assessment of Canada's infrastructure near and medium-term needs, and establish a long-term vision for public and private infrastructure investments.
• Improving coordination between infrastructure owners: The assessment will examine and provide advice on how to improve coordination, collaboration and alignment among public and private sector infrastructure owners and funders, and in doing so will respect jurisdictional boundaries within Canada's federation and the self-determination of Indigenous Peoples.
• Determining the best ways to fund and finance infrastructure: The assessment will support a better understanding of the gap between the current state of Canada's infrastructure and future needs, and will explore opportunities to improve public and private sector funding, financing and innovative ways to pay for the infrastructure Canada needs.
  
  The Engagement Paper also outlined the Government's intention to engage directly with provinces and territories, as well as First Nations, Inuit and Métis Peoples on a distinctions-basis to seek their views on the Assessment's priorities. Mayors and municipal leaders will also be engaged, including in partnership with the Federation of Canadian Municipalities. Feedback is also welcomed from experts, industry leaders, and various organizations in the private, non-profit, and civil society sectors, to inform the assessment's priorities and the next steps for carrying out the assessment.

Following the engagement process, the Government will consider the next steps for the National Infrastructure Assessment, including establishing an independent advisory body, setting out the processes for obtaining expert advice, ongoing public engagement and producing interim studies and reports to inform infrastructure policy and investment.

The UK National Infrastructure Assessment

Infrastructure assessments in the UK are undertaken by the UK National Infrastructure Commission. The Commission is an executive agency of the Treasury that provides impartial, expert advice and make independent recommendations to the government on economic infrastructure.

The Commission is required to carry out an assessment of the UK's infrastructure requirements every five years, guided by its objectives to support sustainable economic growth throughout the UK, improve competitiveness and improve quality of life.

In 2018, the Commission released its first National Infrastructure Assessment, covering all sectors of economic infrastructure (broadly defined to include transport, energy, water and waste water, flood resilience, digital connectivity, and solid waste). This Assessment involved an engagement with both the public across the UK as well as industry experts and academics. Work on the Assessment involved a number of activities:

• October 2015 to April 2016: Creating and setting up the Commission
• May 2016 to October 2016: Scoping and Methodology (including initial consultations)
• November 2016 to October 2017: Vision and Priorities (interim report published in October 2017)
• October 2017 to July 2018: Conclusions and Recommendations (final report published in July 2018)
• June 2018 to November 2020: Government Response (final response published in November 2020)

Infrastructure Australia

Infrastructure assessments in Australia are undertaken by Infrastructure Australia, which is an independent body that advises governments, industry and the community on the investments and reforms needed to deliver better infrastructure. Their work follows a five-year policy cycle.

• Every five years, Infrastructure Australia conducts an infrastructure audit, which presents a forward-looking view of the country's infrastructure needs.
• Following the Audit, they produce an Australian Infrastructure Plan, which provides a roadmap for infrastructure reform that responds to the challenges and opportunities identified in the Audit. The Plan sets out detailed recommendations to deliver better infrastructure.
• Their “Prioritising Reform” report provides a two-year update on the progress of infrastructure reform identified in the Australian Infrastructure Plan.
• In addition, they also maintain an infrastructure priority list to provide decision makers with advice and guidance on specific infrastructure investments. It draws on evidence from the Audit and proposals from proponents around Australia.

Infrastructure Australia has released two Infrastructure Audits (2015 and 2019). The 2015 Audit focused on sectors of transport, energy, telecommunications, and water while also discussing implications for growth and the future. The 2019 Audit discussed progress made since the first Audit and also included social infrastructure. The next Plan will be released in 2021.

The approach to developing the 2019 Audit was informed by strategic foresight methods (rather than extrapolating the future from past trends). These methods were applied to develop a three-stage methodology of horizon scanning, interpretation and analysis, and identifying challenges and opportunities. Infrastructure Australia also drew evidence from government agencies and industry representatives while commissioning supporting papers to supplement the second Audit's evidence base.

Unlike in the UK, the Australian Government is not required to formally respond to either the Audit or the Infrastructure Plan. However, the advice contained in both documents has influenced both the federal and state governments in Australia. In particularly, state governments have invested more time in planning and prioritizing investments as a result of the advice provided by Infrastructure Australia.

2. Green and Inclusive Community Buildings

Topic

Announced as part of Canada's Strengthened Climate Plan, the $1.5 billion Green and Inclusive Community Buildings (GICB) program will provide funding support for green and inclusive retrofits of existing community buildings and for the construction of new community buildings that achieve green and inclusive outcomes.

Responsive lines

• The Government of Canada recognizes that investments in green and inclusive community buildings will help shape a resilient economic recovery that includes all Canadians.
• The Green and Inclusive Community Buildings (GICB) program is part of the Government of Canada's strengthened climate plan. It will invest $1.5 billion in community infrastructure projects across Canada over the next five years.
• This investment will support good jobs and economic growth, contribute to achieving Canada's climate objectives, and help serve disadvantaged populations. It will fund retrofits that will improve energy efficiency of existing community infrastructure, as well as new build projects that are net-zero, net-zero ready or at the highest efficiency level, where net-zero still not practical, such as in the North.

Background

On December 11, 2020, the federal government released Canada's Strengthened Climate Plan, A Healthy Environment and a Healthy Economy. Included in this plan is $1.5 billion in funding for the new Green and Inclusive Community Buildings (GICB) program, with funding that starts in April 2021 and ends in March 2026.

The program launched on April 14, 2021, and will be delivered directly by Infrastructure Canada (INFC). Eligible recipients include provinces and territories, municipalities, local service districts, not-for-profits, and Indigenous governments and organizations.

The purpose of the program is to make community buildings “greener” while improving the condition and broad availability of these buildings across Canada for the benefit of communities with a particular emphasis on serving underserved communities and high-needs groups. To do this, the GICB program will fund building retrofits that decrease greenhouse gas emissions and advance best practices for improved energy efficiency and climate resilience. The program will also support construction of new community buildings that will achieve net-zero carbon, net-zero carbon readiness or the highest efficiency standards where net-zero is still impractical (e.g. in the north).

Investments in retrofits and new construction of community buildings infrastructure in the short-term are also intended to generate employment and community development opportunities, helping communities to recover from the impacts of COVID-19.

In keeping with the Government of Canada's commitment to move forward with Indigenous peoples along a shared path of reconciliation, the GICB program has also earmarked 10% of the funding envelope ($150 million) for projects benefiting Indigenous communities. This is a minimum level of funding reserved for such projects, and projects will also be considered for the ways in which they help to close socio-economic gaps and eliminate systemic barriers facing First Nations, Inuit, and Métis peoples as well as non-status and unaffiliated Indigenous populations in urban centres.

3. Zero-Emission Buses

Topic

On February 10, 2021 the government announced $14.9 billion for public transit projects over eight years. A portion of this amount will support the deployment of zero-emission vehicles and related infrastructure. This commitment advances the Minister's mandate commitment to support the deployment of 5,000 zero-emission transit and school buses. Investments in zero-emission buses will be closely coordinated with those of the Canada Infrastructure Bank.

Responsive lines

• The government has committed to supporting the purchase of 5,000 zero-emission buses, and federal assistance has helped operators acquire over 300 such buses since 2015. This new source of funds will enable system-level electrification planning in addition to supporting the purchase of zero-emission buses, charging or refuelling equipment, and other supportive infrastructure. These investments will complement financing currently available through the Canada Infrastructure Bank.
• Further details on how to apply will be shared soon. It is the government's intention to move forward with near-term funding quickly, in order to ensure that investments in transit help drive Canada's economic recovery and enable a green pivot in manufacturing and other industries.
• In October 2020, as part of the Canada Infrastructure Bank's three-year, $10 billion Growth Plan, the government announced that $1.5 billion of the available funding will be used to accelerate the adoption of zero-emission buses and charging infrastructure so Canadians can have cleaner commutes.

Background

The Prime Minister's announcement provides $14.9 billion for public transit projects over eight years, which includes permanent funding of $3 billion per year for Canadian communities beginning in 2026-27. This funding is separate from funding currently available under integrated bilateral agreements in place with provinces and territories, and will complement the efforts of the Canada Infrastructure Bank.

In the first five years, $5.9 billion will be made available starting in 2021 to support the near-term recovery of Canadian communities by:

• Building major public transit projects and provide dedicated planning funding to accelerate future major projects.
• Supporting the deployment of zero-emission vehicles and related infrastructure, complementing the work of the Canada Infrastructure Bank.
• Meeting the growing demand for active transportation projects, including building walkways and paths for cycling, walking, scooters, e-bikes, and wheelchairs.
• Helping Canadians living in rural and remote areas travel to and from work more easily and access essential services, by working with rural, remote, and Indigenous communities to identify and create transit solutions that meet their needs.

Further details on near-term funding, including how to apply, will be shared in the coming months.

The funding announced by the Prime Minister also delivers on the government's commitment to provide $3 billion annually in permanent support for public transit. This funding will become available in 2026.

The new funding is expected to help bridge the gap between the Investing in Canada Infrastructure Program (ICIP) and permanent funding that will become available in 2026. Proponents that still have allocations accessible under the Public Transit stream will be expected to consider these available funds before making additional funding requests.

The Government has committed to ensuring that new federal investments in public transit are used to support zero-emission buses and rail systems starting in 2023, and will work with municipalities to address any exceptional circumstances.

4. Permanent Public Transit Funding

Topic

On February 10, 2021, the Prime Minister announced new public transit funding of $14.9 billion over 8 years, which includes creating a permanent public transit fund of $3 billion per year, beginning in 2026-27. For decades governments have heard from municipalities and transit authorities that a source of permanent and stable funding is essential to allow for careful and long-term project planning and delivery. Consultations on this program are expected to begin in the near future. Stakeholders will be very interested in how these funds will be distributed and for what purposes.

Responsive lines

• Provinces, territories, and municipalities have been clear that permanent federal transit funding will have a transformative impact on our communities for generations. We are responding to that demand by creating permanent funding of $3 billion annually, beginning in 2026-27.
• Over the coming months, the government will seek to facilitate partnerships between all orders of government, Indigenous communities, transit agencies, policy experts and other stakeholders to develop an approach to permanent public transit funding that offers the greatest benefits to Canadians.
• We will also invest $5.9 billion over the next five years, to build major transit projects, support the deployment of zero-emission buses, meet the demand for active transportation infrastructure, and help rural, remote, and Indigenous communities identify and create solutions for their mobility needs.
• This funding is separate from funding currently available under integrated bilateral agreements in place with provinces and territories, and will complement the efforts of the Canada Infrastructure Bank. Funding for major transit will be targeted on projects that are ready to advance in the short-term, and that quickly support recovery, while laying the foundation for future growth. Further details on the near-term funding will be shared in the coming months.

Background

On February 10, 2021, the government announced $14.9 billion for public transit capital projects over the next eight years, which includes permanent funding of $3 billion per year for Canadian communities beginning in 2026-27. In the first 5 years, starting in 2021, $5.9 billion will be made available to support the near-term recovery of Canadian communities by:

• Building major public transit projects, and providing dedicated planning funding to accelerate future major projects.
• Supporting the deployment of zero-emission vehicles and related infrastructure, complementing the work of the Canada Infrastructure Bank.
• Meeting the growing demand for active transportation projects, including by building walkways and paths for cycling, walking, scooters, e-bikes, and wheelchairs.
• Helping Canadians living in rural and remote areas travel to and from work more easily and access essential services, by working with rural, remote, and Indigenous communities to identify and create transit solutions that meet their needs.

Consultations on the design of the new permanent transit fund will begin in the near future to address how all orders of government can work in partnership to get the most out of investments in public transit.

For decades governments have heard from municipalities and transit authorities that a source of permanent and stable funding is essential to allow for careful and long-term project planning and delivery. Stakeholders like the Federation of Canadian Municipalities and the Canadian Urban Transit Association have also been long-time advocates for this approach to transit funding.

A commitment to create a permanent transit fund was included in the Minister of Infrastructure and Communities' mandate letter, which also stated that this commitment would rise with the cost of construction over time. It was generally expected that the commitment to permanent transit funding would begin in 2028, when transit funding through the Investing in Canada Infrastructure Program would end.

Given the size and permanent nature of this commitment, consultations will be important to ensure that the program is designed in a way that will be supported by stakeholders and will be able to sustainably and efficiently meet the transit infrastructure needs of communities going forward.

Over the coming months, Infrastructure Canada has committed to working with provinces, territories, municipalities, local governments, Indigenous communities, transit agencies, policy experts and other stakeholders to develop programming for the permanent public transit fund in a manner that offers the greatest benefits to Canadians.

There are many potential projects favoured by the public, municipalities, provinces, and/or territories that are potential pressures for funding through this program. However, the outcomes and distribution mechanisms for this program have not yet been established and as such it is too early to say definitively which projects will receive support from the permanent transit fund.

5. Ventilation Program

Topic

On April 14, 2021, the Government of Canada announced a new investment of $150 million to improve indoor ventilation for schools, hospitals, and other public buildings.

Responsive lines

• The Government of Canada committed to provide $150 million to improve ventilation in public buildings and help reduce the spread of COVID-19. The new ventilation program will help provincial, territorial, municipal and local governments and Indigenous communities fund projects that increase air quality and circulation, such as upgrades or conversions of heating, ventilation and air conditioning systems.
• Infrastructure Canada will add $120 million to the $33.5 billion Investing in Canada Infrastructure Program (ICIP) bilateral agreements with provinces and territories to support ventilation improvement projects in public buildings, including municipal and local government and Indigenous community buildings. The balance of funding, $30 million, will be delivered by Indigenous Services Canada and Crown-Indigenous Relations and Northern Affairs Canada to fund projects directly with First Nations, Inuit and Métis communities to help address the unique challenges they face.
• The health and well-being of Canadians remains the top priority of the Government of Canada as COVID-19 continues to have an unprecedented impact on people and economies across the country.
• Communities across the country will benefit from these new infrastructure investments, allowing them to make indoor public spaces safer for Canadians by reducing the risk of disease transmission.

Background

Guidance from public health authorities indicates that improving indoor ventilation, in combination with other recommended public health measures, can reduce exposures to SARS-CoV-2, the virus that causes COVID-19.

A growing body of scientific evidence suggests that SARS-COV-2 spreads through aerosols, particularly in indoor spaces. Infectious particles can remain suspended in indoor air for long durations, accumulate and disperse, leading to viral transmission.

The 2020 Fall Economic Statement announced a commitment to provide $150 million to Infrastructure Canada through 2023 to improve ventilation in public buildings and help reduce the spread of COVID-19. The new ventilation program will help provincial, territorial, municipal and local governments and Indigenous communities fund projects that increase air quality and circulation, such as upgrades or conversions of heating, ventilation and air conditioning systems.

On April 14, 2021, the Government of Canada announced that $120 million would be delivered by Infrastructure Canada through the COVID-19 Resilience stream of the Investing in Canada Infrastructure Program, which will allow municipal and regional governments, and Indigenous communities to access funding through their respective province or territory. The balance of funding, $30 million, will be delivered through direct agreements with Indigenous communities by Indigenous Services Canada and Crown-Indigenous Relations and Northern Affairs Canada.

This new funding builds on the previously announced COVID-19 Resilience Stream under the Investing in Canada Infrastructure Program, which offers up to $3 billion to provinces and territories for a range of projects, including ventilation projects that will help communities respond to the immediate pressures and concerns as a result of the current pandemic as well as build resiliency for the future. Provinces and territories, in consultation with municipalities and Indigenous communities, are responsible for identifying, prioritizing and submitting projects and flowing funds to eligible ultimate recipients.

The ventilation program is in addition to the previously announced $2 billion for the Safe Return to Class Fund to help provinces and territories implement various public health safety measures in schools, including improving air ventilation in schools.

The Government of Canada also announced in the 2020 Fall Economic Statement, a commitment of up to $1 billion for a Safe Long-term Care Fund, to help provinces and territories protect people in long-term care and support infection prevention and control, which includes making improvements to ventilation.

6. Active Transportation

Topic

Investing in pathways and trails for cycling, walking, hybrid e-bikes and scooters, and wheelchairs gives everyone the opportunity to get out, get active, and access public transportation. The announcement of Canada's first-ever dedicated active transportation fund and national strategy will complement existing infrastructure investments and COVID-19 recovery programs which make it easier for all Canadians to choose active transportation.

Responsive lines

• Investing in public transit strengthens communities, helps Canadians get around in faster, cleaner and more affordable ways, and ensures good jobs today while charting a path to achieve net-zero emissions by 2050.
• The historic investment of $400 million through a fund dedicated to active transportation – part of the $14.9 billion committed for public transit projects over the next eight years – will support communities as they build vibrant neighborhoods where people can safely live, work and play.
• Safe and inclusive mobility infrastructure is integral to Canada's recovery. The COVID-19 Resilience Stream and the Canada Healthy Communities Initiative also support projects that increase safe and equitable access to active modes of transportation.

Background

Investing in Canadian Active Transportation Infrastructure

Since 2015, Infrastructure Canada has approved 191 active transportation projects representing an investment of over $175 million through the Investing in Canada Plan.

On March 12, 2021, Minister McKenna and Parliamentary Secretary Fillmore announced that $400 million will be invested in active transportation over the next five years to help build new and expanded networks of pathways, bike lanes, trails and pedestrian 14)n bridges.

• This announcement builds upon the February 10, 2021 announcement by Prime Minister Justin Trudeau of $14.9 billion in public transit funding over the next eight years, including permanent public transit funding beginning in 2026-27.

The Government of Canada is also developing a National Active Transportation Strategy to further support and promote healthy and active lifestyles through bicycle and pedestrian-friendly communities across the country. The Strategy will aim to support Canadian communities as they build new and expanded networks or bike lanes, trails, and pedestrian bridges, and undertake repairs and planning studies.

• The importance of developing a National Active Transportation Strategy was highlighted in the December 2020 launch of the government's strengthened climate plan, A Healthy Environment and a Healthy Economy. The plan identifies the importance of exploring ways to deliver more mobility options, such as walking trails, cycling paths and other forms of active mobility, which are complementary tools that can reduce reliance on cars and provide healthy transportation alternatives.

The Rural and Northern Infrastructure, Public Transit, and Community, Culture and Recreation Infrastructure Streams of the Investing in Canada Program have all supported the development of a wide range of local active transportation projects.

Active transportation infrastructure is an eligible expense under the federal Gas Tax Fund (GTF), which delivers over $2 billion every year to over 3600 communities across the country. The federal GTF is a permanent source of annual funding to provinces and territories who, in turn, flow this funding to their municipalities to support local infrastructure priorities.

Active Transportation and COVID-19 Recovery

Through the COVID-19 pandemic, communities have moved rapidly to expand the provision of active transportation solutions; enabling Canadians to access the benefits of an increased range of mobility options.

Infrastructure Canada adjusted the Investing in Canada Infrastructure Program so that provinces and territories can use federal funding to act quickly on a wider range of more pandemic resilient infrastructure projects, such as active transportation.

Under the new COVID-19 Resilience funding stream worth up to $3.3 billion, projects are eligible for a significantly larger federal cost share.

• Eligible projects under the COVID-19 Resilience stream include active transportation infrastructure, such as parks, trails, foot bridges, bike lanes and multi-use paths. These investments will support physical distancing, outdoor activities, encourage walking, biking and similar outdoor transportation that will provide safer ways to move around in our communities.

The Canada Healthy Communities Initiative is a $31 million investment which invites local organizations to pitch community-led ideas to improve neighbourhood life during COVID-19 and beyond.

7. Canada Healthy Communities Initiative

Topic

The Canada Healthy Communities Initiative (CHCI) will provide up to $31 million in existing federal funding to support communities as they deploy new ways to adapt spaces and services to respond to immediate and ongoing needs arising from COVID-19 over the next two years.

Responsive lines

• COVID-19 has exposed a real need for low-cost, locally-driven ideas to help communities adapt and thrive. Whether it's pop-up bike paths, community gardens, art installations or Wi-Fi hot spots, Canadians want to work, play and learn in safe, vibrant and inclusive communities.
• The Canada Healthy Communities Initiative will support small-scale infrastructure-related projects. These projects can have a big impact as local governments, Indigenous communities and their non-profit partners rethink public spaces. Some of the proposed initiatives include new multi-purpose community spaces; opened streets for increased pedestrian zones and active transportation; and virtual farmers' markets to connect farmers and consumers.
• Through an open and competitive call for applications, Community Foundations of Canada was selected to work directly with communities to identify and fund local projects and solutions to the challenges presented by COVID-19. They launched their application portal on February 9, 2021, with the first intake having closed on March 9, 2021. The response from communities across Canada has been significant – over 3000 applications totalling $356 million. The first funding announcement occurred on March 24, 2021 - $95,000 to expand March of Dimes' “Hi, Tech!” program which helps people with disabilities learn how to use virtual platforms to access services and reduce social isolation. A second intake will open in mid-May.

Background

Announced by Minister McKenna on August 13, 2020, the Canada Healthy Communities Initiative (CHCI) will provide up to $31 million in existing federal funding to support communities as they deploy new ways to adapt spaces and services to respond to immediate and ongoing needs arising from COVID-19 over the next two years.

Community Foundations of Canada (CFC) was selected by Infrastructure Canada through an open and competitive call for applications to work directly with communities to identify and fund local projects and solutions to the challenges presented by COVID-19. CFC will receive up to $31 million in funding over two years to identify and fund local community projects that can be put into place quickly to improve the lives of Canadians. CFC launched their application portal on February 9, 2021, with the first intake having closed on March 9, 2021. A second application intake will open May 14, 2021 and close on June 25, 2021. The first funding announcement occurred on March 24, 2021, with funding flowing to projects beginning mid-April 2021.

The Initiative will ultimately support projects in communities under three main themes:

• Creating safe and vibrant public spaces
  • Projects that create or adapt existing public places such as parks, main streets, and indoor spaces that encourage safe cultural or physical activities, and local commerce.
• Improving mobility options
  • Projects that permit physical distancing through permanent or temporary changes that make it easier for people to get around in their communities, whether walking, biking, accessing public and private transit, or other modes of transportation.
• Digital solutions
  • Innovative digital projects that address changing community needs through the use of data and connected technologies.

Funding for the Initiative is being repurposed from existing funding for a second Smart Cities Challenge competition to support communities in dealing with the immediate and ongoing challenges posed by COVID-19. The implementation of the first round of the Smart Cities Challenge is ongoing, with planning for a future competition postponed due to the impacts of COVID-19.

II. Auditor General - Audit

8. OAG Audit of the Investing in Canada Plan

Topic

On March 25, 2021, the Office of the Auditor General (OAG) released its performance audit of the Investing in Canada Plan (the Plan).

Responsive lines

• We welcome the Auditor General's report and findings. Infrastructure Canada agrees to implement the Auditor General's recommendation to more clearly report on progress made under the Investing in Canada Plan.
• We are pleased to see confirmation that our reporting provides an accounting of the Plan's full $188-billion budget.
• Five years in, we are 40 percent of the way through the 12-year Plan and we have delivered over 40 percent of the funding available. We are on track and on time.
• The Plan supports infrastructure projects that build modern, resilient, inclusive and green communities across Canada. It is getting high-speed internet to Canadian households, cleaning our air and water, and making our communities safer, more resilient, and inclusive.
• The Plan is delivering jobs and growth. The Plan is associated with the creation of 100,000 good, well-paying jobs each year and boosting our GDP at a time when we need it most.
• The Investing in Canada Infrastructure Program is just under a third [28%] of the way to its GHG emissions reduction target of
  10 Mt.
• That's the immediate benefit of building infrastructure. This is significant, measurable progress at a time we need it most.
• We agree with the Auditor General—the full value of these investments has yet to be tallied. The Investing in Canada plan was created to pay dividends for generations to come.

Flow of Federal Funding

• It is important to understand that the work that matters to Canadians, the “shovels in the ground,” happens well before a dollar of federal money is ever spent.
• Under the majority of Infrastructure Canada's programs, construction work can begin once a project is approved. Jobs are being created, infrastructure is being built, and benefits are being realized even before federal funds officially flow. Infrastructure Canada pays when receipts are submitted – so our funding often flows last.
• The progress of infrastructure projects is up to the proponents. Sometimes, progress is not as fast as anticipated. In these cases, we defer the spending – we reprofile unspent funds to the future years when the costs are likely to be incurred.
• Reprofiling of funding contributes to a more back-end loaded overall funding profile. However, this would only put the ultimate objectives of the Plan at risk if the Government were to “turn off the taps” at the end of the 12 years instead of extending the programs, which it will not do.

Reporting on Progress

• The Auditor General's report found that the 21 departments and agencies responsible for the 93 programs do not all report in exactly the same way, and do not all provide the same level of information—nor are they required to.
• This is to be expected given the scope and breadth of the Plan. Some of the programs, what we call “legacy programs,” were created and in operation before the Investing in Canada plan was launched. These programs were not originally designed to report against the Investing in Canada plan's objectives, and thus the reporting is different.
• Some other programs do not submit reports that are as detailed, or complete, as others for two very good reasons.
• First, some programs, such as the Gas Tax Fund, are administered by partners according to pre-existing agreements that do not require the same level of details as those programs provided directly by the Government of Canada.
• Second, some programs such as the Supporting Shelters for Victims of Family Violence program delivered by the CMHC don't report details such as addresses for shelters that would compromise the safety of some of Canada's most vulnerable people.
• INFC will work with partner departments to improve reporting on existing “legacy” programs under the Plan. While our reporting on legacy programs could be strengthened, these programs are contributing to the Plan's objectives.

Sustainable Development Goals

• The Auditor General notes in the report that the Investing in Canada plan will very likely have meaningful impact in achieving the United Nations' Sustainable Development Goals (SDGs).
• Employment and Social Development Canada is responsible for reporting on the SDGs for the Government of Canada. While it is true that the Plan is not specifically designed to report progress against the SDGs, there is not a single SDG that is not advanced by programs under the Plan.

Background

The Auditor General's audit of the Investing in Canada Plan was undertaken in response to a motion adopted by House of Commons on January 29, 2020:

Motion of Mr. Berthold (Mégantic—L'Érable), seconded by Mr. Lehoux (Beauce):

That, given the Parliamentary Budget Officer posted on March 15, 2018, that “Budget 2018 provides an incomplete account of the changes to the government's $186.7 billion infrastructure spending plan” and that the “PBO requested the new plan but it does not exist”, the House call on the Auditor General of Canada to immediately conduct an audit of the government's “Investing in Canada Plan”, including, but not be limited to, verifying whether the plan lives up to its stated goals and promises; and that the Auditor General of Canada report his findings to the House no later than one year following the adoption of this motion.

During its audit, the Office of the Auditor General (OAG) collaborated with Canada Mortgage and Housing Corporation, Indigenous Services Canada, and Infrastructure Canada, selecting a number of their programs under the Plan to analyze in detail. Together these three departments account for 83% of the Plan's funding commitment.

The final OAG report, which was published on March 25, 2021, includes two principal findings and one recommendation:

• Finding 1: Infrastructure Canada was unable to report complete information on the Investing in Canada Plan.
• Finding 2: Federal partner organizations did not spend infrastructure funds as quickly as planned.
• Recommendation: To improve monitoring, tracking and reporting on progress towards the Investing in Canada Plan's objectives, Infrastructure Canada should work with its federal partners in the Plan and with central agencies to determine:
  • how to better measure progress of projects toward the objectives of the Plan;
  • which legacy programs are meant to contribute to the objectives of the Plan and how to report on them; and
  • what information the department needs from federal partners to provide complete and consistent public reporting on the Plan.

As part of her tabling of this audit, the Auditor General released a message noting that it is challenging for lead departments to successfully deliver a horizontal initiative, such as the Plan, without clear authorities and power. She called for the government to consider how it manages horizontal initiatives, and to improve coordination between federal departments.

III. INFC Programs and Initiatives

9. Investing in Canada Plan – Status Update

Topic

Through the Investing in Canada plan, the Government of Canada is investing more than $180 billion over 12 years in public infrastructure to build inclusive, connected and resilient communities across Canada.

Responsive lines

• The Investing in Canada plan has committed over $81 billion and supported thousands of projects across the country that are building stronger, more inclusive communities and generating regional and national economic growth. The Plan is delivered through 93 programs and managed by 21 federal departments and agencies.
• Infrastructure Canada works closely with participating departments to provide Canadians with easy-to-access information about the implementation of the Plan, including a project list and an online project map, which allows Canadians to see projects that are being built in their communities.
• In response to COVID-19, the Government of Canada created the new temporary COVID-19 Resilience stream, with over $3 billion available in existing funding, to provide provinces and territories with added flexibility to fund quick-start, short-term projects that might not otherwise be eligible under the existing funding streams. To date, nine provinces have submitted projects under this stream, with over 1317 projects approved and the large majority of them (84%) approved by Infrastructure Canada within 20 business days. This will be critical for job creation and recovery.
• Infrastructure investment will be a cornerstone as we respond to COVID-19 and prepare to “build back better” in a post-pandemic recovery.
• The Investing in Canada plan provides a basis on which to build a refreshed and renewed infrastructure agenda. We have already begun to do so with a historic commitment to permanent public transit funding, universal broadband fund and other initiatives.
• In response to the recommendation by the Office of the Auditor General, we are examining how we can improve our reporting mechanisms; as we continue to deliver programs and funding under the Plan, we recognize that progress measurement will increasingly place an emphasis on achieving national outcomes. We will measure this progress through a National Infrastructure Assessment.

Background

The Investing in Canada plan comprises $95.6 billion in new funding for infrastructure programs, committed in Budgets 2016 and 2017. Additionally, the Plan is designed to deliver $92.2 billion through pre-Budget 2016 programs.

Infrastructure Canada reports on the Plan's progress via an online funding table, geomap and project list. It also reports annually on progress against the Plan's objectives through a supplementary horizontal initiatives table as part of Infrastructure Canada's Departmental Results Report. In addition, a progress report is produced that highlights the progress and results achieved under the Plan, highlighting the impacts it has on communities across Canada.

Response to COVID-19

Programs under the Plan are being modified to increase flexibility, in order to address new concerns in light of COVID-19. For example, the Canada Healthy Communities Initiative (CHCI) will provide up to $31 million in existing federal funding to support communities as they deploy new ways to adapt spaces and services to respond to immediate and ongoing needs arising from COVID-19 over the next two years.

Additionally, the Government of Canada is adapting the Investing in Canada Infrastructure Program to respond to the impacts of COVID-19. A new temporary COVID-19 Resilience stream, with over $3 billion available in existing funding, has been created to provide provinces and territories with added flexibility to fund quick-start, short-term projects that might not otherwise be eligible under existing funding streams.

10. Transit Funding

Topic

Funding pressures the Government of Canada is facing given Ontario, Quebec, Alberta and British Columbia have either come forward or are expected to come forward with an ask for additional funding to cover the costs of major transit projects.

Responsive lines

• Safe, modern, and efficient public transit systems are important for the health and sustainability of communities. That is why the Government of Canada is making significant investments in public transit projects.
• Under the Public Transit Infrastructure Stream of the Investing in Canada Infrastructure Program, the Government of Canada has approved over $6 billion of the $17.5 billion available to support nearly 300 transit projects across Canada. 
• Safe, modern, and efficient public transit systems are important for the health and sustainability of communities. That is why the Government of Canada is making significant investments in public transit projects.
• Under the Public Transit Infrastructure Stream of the Investing in Canada Infrastructure Program, the Government of Canada has approved over $6 billion of the $17.5 billion available to support nearly 300 transit projects across Canada. 
• With this funding, we are supporting major transit projects across the country, including the Broadway Millennium line in Metro Vancouver; the Edmonton Metro Line Northwest Light Rail Extension and Valley Line West Light Rail Transit; and the procurement of Azur subway cars by the Société de transport de Montréal.
• In addition to these investments, on February 10, 2021, the Prime Minister announced another $14.9 billion for public transit projects over eight years. This funding will support the acceleration of major transit projects across the country, reductions in Canada's GHG emissions, active transportation projects that support healthy lifestyles, and transit solutions for rural and remote Canadians.
• It also includes permanent funding of $3 billion per year for Canadian communities beginning in 2026-27, complementing ongoing investments from the Canada Infrastructure Bank.
  

Background

New transit program

The $14.9 billion announced by the Prime Minister on February 10, 2021 will support:

• The acceleration of major transit projects across the country through funding for planning and capital construction
• A reduction in GHG emissions through an investment of $2.75 billion in zero-emission vehicles and related infrastructure, which will complement the work of the Canada Infrastructure Bank
• Healthier lifestyles in communities across Canada through $400 million in funding for active transportation projects
• Canadians living in rural and remote areas through an investment of $250 million to support transit solutions that meet their needs.

It also includes permanent transit funding of $3 billion per year for Canadian communities beginning in 2026-27.

Looking forward, Infrastructure Canada will be consulting with all orders of government, Indigenous communities, transit agencies, and other stakeholders to develop an approach for the permanent public transit funding to ensure our investments deliver the greatest benefits to Canadians, and responds to the real transit needs of communities.

ICIP investments in transit

Ontario

Ontario was allocated $7.5 billion under the ICIP Public Transit Infrastructure Stream to build new urban transit network and service extensions. To date, the Province has submitted a total of 270 public transit projects for funding consideration (250 projects have been approved, 20 remain under review), which represents approximately $6 billion.

In terms of major transit projects, the Province of Ontario has prioritized a total of seven projects in the Greater Toronto and Hamilton Area, and is seeking a federal commitment to fund a minimum 40% of the provincial priority projects, requesting an additional $7.5 billion beyond the $5.1 billion already notionally allocated for these projects under the Investing in Canada Infrastructure Program (ICIP).

• These seven projects include five provincial priorities: Ontario Line, Scarborough Subway Extension, Yonge North Subway Extension, Eglinton Crosstown West Extension and the Hamilton Light Rail Transit project; and two projects put forward by the City of Toronto: Bloor-Yonge Station Capacity Enhancement and SmartTrack Stations.
• The preliminary cost estimate for the six major transit projects in Ontario is approximately $33.8 billion.
• [redacted]

British Columbia

British Columbia has allocated over $1.5 billion in federal funding to 20 transit projects with both Translink and BC Transit. Major transit investments include the Broadway Millennium line and the Expo Millennium Line Upgrades in Metro Vancouver. Mayors Council (Metro Vancouver) continues to advocate for increased federal investment in transit.

Alberta

In Alberta, three light rail transit projects (Metro Line NW and Valley Line West in Edmonton, Green Line in Calgary) have been approved for a total federal contribution of more than $2.5 billion under ICIP (both Green and Transit streams). Both cities have advocated for more stable and permanent transit funding to continue developing transit lines, but also to explore conversion to more efficient buses.

Quebec

Six public transit projects have been approved under the Investing in Canada Infrastructure Program (ICIP) in Quebec, representing a total federal contribution of almost $2.66 billion, including the Blue Line in Montreal and the Réseau Structurant in Quebec City. The remaining allocation under the Public Transit Stream in Quebec amounts to $2.38 billion.

Several other major public transit projects currently under study are listed in the Plan Québécois des infrastructures (PQI) 2021-2031, representing at least $16.1 billion in additional investments. Moreover, additional investments of $18.7 billion would be made by CDPQ Infra. Quebec plans a grand total investment of $49 billion in transit over 10 years.

Based on available information, the Structuring Electric Public Transit Project Between Western Gatineau and Downtown Ottawa should be the next major project presented by Quebec for funding. Under the IBA, approximately $171 million is available for the Société de transport de l'Outaouais (STO).

Safe Restart Agreement

In July 2020, the Government of Canada announced the Safe Restart Agreement, a federal investment of over $19 billion to help provinces and territories restart their economies while protecting the health of Canadians. The investment included a contribution of up to $2 billion to support municipalities with COVID-19 operating costs for six to eight months, and a commitment to cost-match more than $2.3 billion to support any additional provincial or territorial contributions for public transit.

11. Integrated Bilateral Agreements

Topic

Infrastructure Canada has signed long-term infrastructure agreements with all provincial and territorial partners to make unprecedented investments in public transit, green infrastructure, recreational, cultural, and community infrastructure, as well as rural and northern communities.

Responsive lines

• Under the Investing in Canada Infrastructure Program Bilateral Agreements, Infrastructure Canada is providing $33.5 billion in funding for public transit, green, community, culture and recreational, and rural and northern infrastructure projects from coast to coast to coast.
• Four years in, over $12 billion for over 3,400 projects has already been approved, and an additional $7 billion is currently under review.
• The Investing in Canada Infrastructure Program now includes a new COVID-19 Resilience Infrastructure stream and expanded eligibilities under the program's previous streams to fund projects to help provinces and territories respond to the challenges of COVID-19.

Background

The Investing in Canada Infrastructure Program (ICIP) is the centrepiece of Infrastructure Canada's funding initiatives supporting the broader Investing in Canada plan.

This 10 year allocation-based program promotes strong collaboration between all levels of government by advancing outcomes in a manner that is flexible and responsive to unique local, provincial and territorial circumstances, and supporting local and regional decision-making in the realm of public infrastructure.

Provinces and territories (P/Ts), in consultation with municipalities and Indigenous communities, are responsible for identifying, prioritizing and submitting projects and flowing funds to eligible ultimate recipients.

Managed through Integrated Bilateral Agreements (IBAs), the ICIP was originally divided into four funding streams: Public Transit ($20.1 billion); Green Infrastructure ($9.6 billion); Community, Culture and Recreation Infrastructure ($1.3 billion); and Rural and Northern Infrastructure ($2 billion + $400 million).

With the onset of the COVID-19 pandemic, the new COVID-19 Resilience Infrastructure stream will help communities respond to the immediate pressures and concerns as a result of the current pandemic as well as build resiliency for the future. The new time-limited stream will have an increased federal cost-share for a broadened range of infrastructure projects and a simplified approval process to allow work to get underway quickly while respecting public health measures.

Three years into the 10 year program, approvals are as follows (Data as of April 7, 2021):

• Projects approved to date: 3,463, worth $12.79 billion (Projects approved and public are 1,722 worth $10.73B).
• Projects Under review: 808, worth $7.302 billion
• 53% or $16.627 billion remains uncommitted

Examples of eligible projects include:

• Transit: New Light Rail Transit systems; extensions of existing subway systems; electric bus purchases; or removing barriers in the built environment, such as by providing wheelchair ramps at transit stations.
• Green: Renewable energy storage; strategic Interties; publicly-accessible electric vehicle (EV) charging stations; preservation of natural wetland systems, rehabilitation of public infrastructure to be climate resilient; or, water main and sewer replacement, waste diversion, and recycling facilities.
• Community, Culture and Recreation: Community centres, art galleries, community recreation and trail facilities, and community service hubs.
• Rural and Northern: Greenhouses, community freezers, short sea shipping wharves, and broadband projects.
• COVID-19 Stream: Upgrades to municipal buildings, hospitals or schools, temporary COVID-19 testing facilities, and active transportation pathways.

12. Climate Lens

Topic

The Climate Lens is a project-level requirement that is meant to raise awareness of climate change risks and impacts and encourage improved choices by project planners, designers and decision-makers. The Climate Lens also supports Infrastructure Canada in measuring its progress towards meeting its climate goals.

Responsive lines

• The Government of Canada Climate Lens is designed to encourage project funding applicants to consider how their projects can reduce carbon pollution and increase resilience to climate change to benefit their communities and create jobs. The costs for completing a Climate Lens are eligible project costs.
• In line with our commitment to continuous improvement of our tools, we are revisiting the Climate Lens to increase its accessibility for all project sizes and types. We are also developing user-friendly guidance for provinces, territories and proponents to assist them in identifying and accounting for GHG reductions, increasing climate resilience, and encouraging best practices.
• What has the CL accomplished? The Climate Lens assessments have encouraged project proponents to build climate-smart infrastructure resulting in an estimated 2.8 megatonnes of GHG emissions reductions. We are almost one-third of the way towards our goal of achieving 10 MT in GHG reductions annually.

Background

• The Climate Lens was launched on June 1, 2018, and requires INFC-supported projects to:
  1. Assess their expected greenhouse gas (GHG) emissions against a baseline, and;
  2. Consider the project's resilience to the impacts of climate change using a risk management approach at the planning stage.
• The Climate Lens applies to all projects over $10 million under the $33 billion Investing in Canada Infrastructure Program (ICIP), all climate-focused projects under the Green Infrastructure Stream of ICIP regardless of project cost, and all projects under the Disaster Mitigation and Adaptation Fund.
• The Climate Lens has applied to 85% of total federal funding approved under ICIP.
• In total, 173 projects applying for funding under the ICIP have been required to complete either the mitigation or resilience Climate Lens assessments, or both.
• These completed Climate Lens assessments have encouraged project proponents to build climate-smart infrastructure resulting in an estimated 2.8 megatonnes of GHG emissions reductions, as well as innovative solutions to climate risks and hazards that improve the quality of life for Canadians from coast to coast to coast.
• There are currently 64 ICIP projects that have not yet met their Climate Lens requirement. 41 of these Climate Lenses are pending and 23 received exemptions.
• Projects historically received exemptions for one of four reasons:
  • The General Guidance was unavailable at the time of project approval;
  • The community, due to its small size, was deemed to lack the capacity to complete the climate lens.
  • There is minimal opportunity to mitigate GHG emissions (for GHG mitigation climate lens) or to increase resilience (for resilience climate lens); or
  • The Climate Lens assessment was not required by Quebec's regulations (article 4.g.iii of the integrated bilateral agreement.)
• Projects historically received deferrals in instances where the completion of the Climate Lens assessment was dependent on the completion of the project design phase.
• Infrastructure Canada has recently developed a revised approach to the Climate Lens, which will allow all projects to consider opportunities to mitigate GHG emissions and the effects of climate risks as applicable, and at a level of depth relevant to their project types, avoiding the need for exemptions and deferrals.
• The new Climate Lens is more user-friendly, reduces paper burden, and includes robust best practices and client-centred guidance to proponents. Proponents need to provide an assessment of typical annual GHG emissions reductions and climate risks.
• The revised approach to the Climate Lens requests information that is applicable to each project at its current stage of design with the opportunity to gather further information as it becomes available. This phased approach ensures that climate is considered at each stage of project development, not just at the outset.

13. Gas Tax Fund

Topic

The federal Gas Tax Fund (GTF) is a permanent, legislated and indexed funding program that currently provides over $2 billion annually for municipal infrastructure.

Responsive lines

• The federal Gas Tax Fund provides over $2 billion every year to 3,600 communities across the country, this funding supports approximately 4,000 projects per year. Municipalities are able to pool, bank, and borrow against this stable and predictable funding.
• In the 2021-2022 fiscal year, the total amount to be transferred will be $2.3 billion.
• Communities select how best to direct the funds with the flexibility to make strategic investments across 18 different project categories. The federal government does not review or approve projects under the Gas Tax Fund.
• As part of the government's ongoing response to the COVID-19 pandemic, an additional one-time transfer of $2.2 billion was announced, subject to enabling legislation, in recognition of the critical role our communities play in a safe restart.
• The government also intends to rename the currently known Gas Tax Fund as the Canada Community-Building Fund to better reflect the program's evolution over time.

Background

The federal Gas Tax Fund (GTF) is a permanent, legislated and indexed funding program that currently provides $2.2 billion annually for municipal infrastructure. In the 2021-2022 fiscal year, this amount will be increasing to $2.3 billion to account for inflation.

The GTF was established in 2005 and was 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 GTF (signed in 2014) has been indexed at 2% 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.

In 2019-2020, a top-up transfer of $2.2 billion was provided to municipalities. On March 25, 2021, the government introduced an Act of Parliament to provide $2.2 billion in additional funding to the federal Gas Tax Fund and change the name of the program to the Canada Community-Building Fund. The new funding and name change are both subject to the coming into force of the legislation.

Allocations are calculated on a per capita basis for provinces, territories and First Nations, and provide a base funding amount for smaller jurisdictions (Prince Edward Island and each territory).

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.

The federal GTF provides annual infrastructure funding to more than 3,600 communities across the country. In recent years the funding has supported approximately 4,000 projects each year in 18 different categories.

The list Infrastructure Canada receives from recipients about projects funded by the GTF is only used to provide an estimate of funded projects. Recipients have full discretion to change the project scope or substitute projects after they have been reported to the department. Despite these limitations, the list provides a broad record of the kinds of projects being advanced by municipalities, and an indication of the overall use of funds under the program.

On June 5, 2020, a list of projects under the GTF was provided to the Parliamentary Budget Officer in response to the request to clarify the number of projects reported under the Investing in Canada plan. The federal government does not review or approve projects under the GTF, and recipients are responsible for reporting on the outcomes of their projects to their residents.

14. Disaster Mitigation and Adaptation Fund

Topic

The Disaster Mitigation and Adaptation Fund (DMAF) is a program aimed at strengthening the resilience of Canadian communities through investments in large-scale infrastructure projects, including natural infrastructure projects, enabling them to better manage the risk associated with current and future natural hazards, such as floods, wildfires and droughts.

Responsive lines

• The Government of Canada is providing support to communities to adapt to the intensifying weather events that are associated with climate change.
• Through the Government of Canada's Disaster Mitigation and Adaptation Fund (DMAF), over $1.9 billion has been announced for 69 large-scale infrastructure projects that will help protect Canadians, their homes and businesses, while reducing the long-term costs associated with replacing infrastructure following natural disasters.
• The DMAF supports large-scale infrastructure projects -- including natural infrastructure, such as wetland restoration, wildfire barrier or setback and levees -- that help communities better prepare for and withstand the potential impacts of natural disasters.

Background

The Disaster Mitigation and Adaptation Fund (DMAF) was launched on May 17, 2018. DMAF is a $2 billion national merit-based program that supports large-scale infrastructure projects to help communities better prepare for and withstand the potential impacts of natural disasters, prevent infrastructure failures, and protect Canadians and their homes. The DMAF funding envelope is almost fully exhausted. Infrastructure Canada is currently working on the details to launch a second call for proposals.

As of February 17, 2021, DMAF has funded 69 projects representing over $1.9 million in federal funding. Projects by jurisdiction and hazard type:

• In Alberta, there are five flood projects that total almost $268 million;
• In British Columbia, there are seven projects that total over $217 million, including five flood, one flood/drought project and an earthquake project;
• In Manitoba, there are two projects that total over $270 million, including one flooding project and one permafrost thaw project;
• In New Brunswick, there are three projects that total over $36.8 million, including two flood projects and one storm project;
• In Newfoundland and Labrador there is a flood project that totals $15.1 million;
• In the Northwest Territories, there are three projects that total $64.1 million, including a flood project, a permafrost thaw project and a wildland fire project;
• In Nova Scotia, there are two flood projects that total almost $57 million;
• In Ontario, there are 30 projects that total $668.2 million, including 18 flood projects, five storm projects, a storm/extreme heat project, an extreme temperature project, three erosion projects, a drought project and a high lake water level project;
• In Québec, there are 11 projects that total about $275.6 million, including seven flood projects, three erosion projects and a drought project;
• In Saskatchewan, there are five projects that total almost $80 million, including three flood projects and two wildland fire projects.

IV. Rural and Broadband

15. Funding For Rural And Northern Communities

Topic

Although broadband connectivity is the number one priority for investment identified by rural Canadians, community infrastructure is also important for recovery from the COVID-19 pandemic, as it helps attract new investment and labour, facilitates trade and growth and improves quality of life.

Responsive lines

• Under the Investing in Canada plan, we have committed over $81 billion and have invested in thousands of projects.
• Infrastructure Canada alone has approved funding of $10.5 billion for more than 5,000 projects in communities with fewer than 30,000 people under the Investing in Canada plan. To support Canadians during the pandemic, a COVID-19 Resilience Stream was introduced under the Investing in Canada Infrastructure Program to give communities access to quicker and more flexible funding. To benefit rural communities in particular, mobile phone and cellular projects, as well as inter-city transit projects are now eligible.
• Rural communities are also receiving significant federal support of over $800 million to date for infrastructure to address the threats of climate change through the Disaster Mitigation and Adaptation Fund.

Background

In June 2019, the Government of Canada launched the Rural Economic Development Strategy for Canada, concurrent with Canada's Connectivity Strategy.

Rural Canada identified connectivity, labour and skills, housing, climate change, community infrastructure and transportation as their greatest gaps and challenges.

The Investing in Canada plan was launched in 2016 and is delivering more than $187 billion over 12 years through the programs of 21 departments and agencies.

16. Broadband Investments

Topic

Broadband connectivity has been an ongoing challenge for Canadians living in rural communities during the COVID-19 pandemic. Rural Canadians have experienced slow and unreliable connections, as traffic has increased on local networks. As well, many rural customers have faced significantly higher monthly charges after exceeding monthly data limits.

Responsive lines

• High-speed Internet access is no longer a luxury — it is a necessity for all Canadians, no matter where they live.
• The current COVID-19 crisis has only reinforced the importance of access to high-speed Internet as Canadians are working and learning at home.
• The Government of Canada has made billions available to support broadband connectivity:
  • Infrastructure Canada's Investing in Canada Infrastructure Program has invested over $343 million for 13 connectivity projects through the Rural and Northern Communities Infrastructure Stream. In response to the COVID-19 pandemic, this stream now will also support mobile/cellular projects that are able to start construction by September 30, 2021.
  • We've made $2 billion in new funding available through the Canada Infrastructure Bank to help connect about 750,000 homes and small businesses to broadband in under-served communities.
  • Also, the Gas Tax Fund provides $2.2 billion annually to support local infrastructure projects, including broadband connectivity.
• These investments complement the recently launched Universal Broadband Fund, which has been enhanced with an additional $750 million, to a total of $1.75 billion. Up to $150 million of these funds is available in a Rapid Response Stream for projects that can be completed during the 2021 construction season.
• In the recent Speech from the Throne, the Government of Canada committed to accelerating federal investments in broadband connectivity, connecting 98% of Canadians by 2026, up from our original target of 95%. The Universal Broadband Fund, along with existing federal investments through Infrastructure Canada, reflects our coordinated approach to extending broadband to all Canadians.

Background

In June 2019, the Government released Canada's Connectivity Strategy, with the objective of connecting 95% of Canadians to internet speeds of at least 50 Megabits per second (Mbps) download / 10 Mbps upload (50/10 Mbps) by 2026, and 100% by 2030, no matter where they are located in the country.

To help reach this target, a wide range of investments are needed to reach rural communities in particular. In 2019, just 46% of rural households had access to internet speeds of 50 Megabits per second (Mbps) download / 10 Mbps upload (50/10Mbps), compared with 99% of urban households.

The Universal Broadband Fund has dedicated $1.75 billion, up from the original $1 billion, towards connecting Canadians living in rural and remote areas of the country. It will provide:

• Up to $150 million for a Rapid Response stream to assist in building projects that are ready to go but lack the necessary funding. These projects must be completed in 2021.
• Up to $750 million for large, high-impact projects that will connect large numbers of households, large geographic areas and will substantially improve the speeds being offered to these communities. Projects with the Canada Infrastructure Bank are encouraged.
• Up to $50 million for mobile Internet projects that primarily benefit Indigenous peoples.

INFC provides funding for broadband connectivity through the Investing in Canada Infrastructure Program – Rural and Northern Communities Infrastructure Stream. The Rural and Northern Communities Infrastructure stream allocates $2 billion to support the unique infrastructure needs of rural and northern communities.

• To date, over $343 million has been approved under this stream for 13 connectivity projects.

In October 2020, the Government announced how Canada Infrastructure Bank investments are anticipated to be allocated. This includes $2 billion to help connect about 750,000 homes and small businesses to broadband in under-served communities.

Additionally, $1.5 billion will be made available for agricultural infrastructure in Western Canada, $2.5 billion for clean power, $1.5 billion for zero-emission buses and $2 billion to retrofit buildings for energy efficiency, and $500 million for studies and technical reports.

The Government of Canada will keep Canadians up to date on all of these connectivity investments and the progress being made through a comprehensive annual report, as well as regular online reporting, updated quarterly.

17. Rural Transit

Topic

Public transit, active transportation, and investing in cleaner and more affordable modes of travel can make an enormous impact in a community, no matter the size. As part of the largest public transit investment in Canadian history, the Government of Canada has committed to working with rural, remote, and Indigenous communities to identify and create transit solutions that meet their needs.

Responsive lines

• Rural communities play vitally important roles in Canada's economy and will play a big part in the recovery from COVID-19. Investing in safe, modern, green, and efficient transit solutions acts as a catalyst for local economies and helps create healthy and sustainable Canadian communities.
• As part of the government's historic investment of $14.9 billion for public transit projects, $250 million will help communities develop rural transit solutions that address the needs of Canadians living in rural, remote and small communities.
• This commitment builds upon a strong foundation of support to rural Canada, which includes the Rural and Northern Infrastructure Stream under the Investing in Canada Infrastructure Program as well as the Rural Economic Development Strategy which outlines a whole-of-government approach to meeting the economic and social development and sustainability needs of rural Canada.

Background

On February 10, 2021, Prime Minister, Justin Trudeau, announced $14.9 billion for public transit projects over the next eight years, which includes permanent funding of $3 billion per year for Canadian communities beginning in 2026-27.

• This commitment will provide communities with the predictable transit funding they need to plan for the future and is part of our plan to create one million jobs, fight climate change, and rebuild a more sustainable and resilient economy.
• This commitment identified the need to help Canadians living in rural and remote areas travel to and from work more easily and access essential services, by working with rural, remote, and Indigenous communities to identify and create transit solutions that meet their needs.
• The announcement also identified active transportation as a priority for investment, reflecting the growing demand for active transportation projects which support healthy lifestyles in our communities.

On March 29, 2021, Minister McKenna announced a $250 million investment in public transit to help communities to develop rural transit solutions that address the transit needs of Canadians living in rural, remote and small communities.

• This fund will support projects that address the unique needs of communities, as there is no one-size-fits-all solution that will meet the diverse needs across Canada's rural and remote communities.
• This will be the first federal fund dedicated to rural transit, advancing the goal creating equity amongst communities across the country. It will support Canada's post-COVID recovery by creating jobs and building a more inclusive economy.
• Further details on near-term funding, including how to apply, will be shared in the coming months.

This commitment builds upon a strong foundation of programs which have advanced rural transit solutions.

The federal Gas Tax Fund (GTF) is a permanent source of funding provided up front, twice-a-year, to provinces and territories, who in turn flow this funding to their municipalities to support local infrastructure priorities.

• The GTF delivers over $2 billion every year to 3600 communities across the country. In recent years the funding has supported approximately 4000 projects each year, including rural transit solutions such as Clearwater Ontario's Transit Service.

The COVID-19 Resilience Stream of the Investing in Canada Infrastructure Program has been put in place to help communities respond to the immediate pressures and concerns as a result of the current pandemic as well as build resiliency for the future. Among other eligible projects, it will fund the implementation of active transportation infrastructure, including parks, trails, foot bridges, bike lanes and multi-use paths.

The Rural and Northern Infrastructure Stream of the Investing in Canada Program has supported the development of a wide range of local projects, including improved capacity of public transit infrastructure, improved quality and/or safety of existing or future transit systems, and improved access to a public transit system.

The $10 billion Provincial-Territorial Infrastructure Component provides support for projects of national, local or regional significance. It includes the Small Communities Fund (PTIC–SCF) to provide $1 billion for projects in municipalities with fewer than 100,000 residents and considers public transit infrastructure as an eligible category.

V. Crown Governance

18. Canada Infrastructure Bank

Topic

How are the Canada Infrastructure Bank's partnerships and investments helping to close the infrastructure gap, support Indigenous and northern communities, and fight climate change?

Responsive lines

• The Canada Infrastructure Bank (CIB) has established itself within the infrastructure marketplace as experts in advisory and investment services, and is working with private and government partners across Canada to attract private investment into complex, long-term revenue generating projects.
• The CIB's $10 billion Growth Plan with investments in green, clean power, agricultural, trade and transport, public transit and broadband infrastructure is designed to support Canada's economic recovery and assist with Canada's long-term climate goals.
• Like other federal Crown corporations, the CIB is accountable to Parliament through the Minister of Infrastructure and Communities and abides with the Government of Canada's rigorous reporting and accountability framework for Crown corporations.

Background

The $10 billion Growth Plan developed by the CIB is expected to promote economic growth, create 60,000 jobs across the country and accelerate Canada's transition to the low carbon economy by making infrastructure investments across the Bank's five priority investment areas:

• Green – $2 billion through energy efficient retrofits
• Public transit – $1.5 billion in zero-emission buses
• Trade and transportation – $1.5 billion in agriculture irrigation projects
• Broadband – $2 billion for connecting underserved communities
• Clean power – $2.5 billion for renewable generation and storage and transmitting clean electricity.

The 2021 Statement of Priorities and Accountabilities (SPA) establishes the CIB's five priority investment areas and long-term investment targets in: green - $5 billion, trade and transportation - $5 billion, public transit - $5 billion, clean power - $5 billion and broadband - $3 billion and sets a target of at least $1 billion in Indigenous infrastructure projects across its five priority investment areas.

As the CIB model is fairly new, and because large and transformative projects take time to develop, it will take time for projects to demonstrate progress and results.

The CIB's progress is reported to Parliament and Canadians through its annual Corporate Plans and Annual Reports which include the CIB's approach to results and delivery which encompass economic growth, job creation, impacts on diversity and inclusion, and anticipated greenhouse gas emission reductions and investment performance.

Privatization of public assets are not within the CIB's mandate as they concern the sale of existing infrastructure assets.

The CIB recorded a net loss of $110 million for the first nine months of 2020-21 (fiscal year up to December 31, 2020). This amount is before Government appropriations, and represents interest income generated of $16 million, less the Réseau express métropolitain (REM) credit provision (possible loss) of $87.5 million, less operating expenses of $39.4 million. [redacted]

Over the first nine months of 2020-21, the CIB's operating expenses of $39.4 million are predominantly related to CIB's advisory role on the VIA High Frequency Rail project ($22 million), followed by compensation and professional fees.

19. Public Private Partnerships

Topic

How do public-private partnerships work, and how do they relate to privatization?

Responsive lines

• P3s are not privatization; the public sector retains ownership of the asset while benefiting from the experience, expertise and investment of the private sector. The Canada Infrastructure Bank is building on this model by exploring new and innovative partnerships.
• P3s are performance-based contracts where private partners collect a revenue stream through user fees or government payments and are paid to not only develop major public infrastructure, but often to operate and maintain it.
• Successful P3s have shown that private investors bring innovation in the planning and design of a project and discipline in budgeting, scheduling and delivery of an asset. These private sector investors can also take on risks relating to infrastructure usage or revenue.

Background

There are a variety of different P3 models that exist. Under a full lifecycle P3 model, the private sector is engaged to design, build, finance, operate and maintain an infrastructure project based on well-defined performance criteria over a fixed term. The public sector retains ownership of the asset.

P3s are not for every project. They are one of many tools in the public sector's tool box for delivering and managing major infrastructure projects. P3s work best for large, complex projects that appropriately transfer project risks to the private sector in a manner that delivers positive Value for Money.

A Value for Money analysis is a comparison of the present value of the estimated total cost of delivering a public infrastructure project using a traditional delivery model compared to the cost of delivering the project using a P3 delivery model. Using past projects as benchmarks, this analysis requires a detailed assessment of the various risks linked to the asset and identifies who is best placed to manage these risks – the public or private sector.

The P3 model was an important building block in the formation of the CIB. The Bank is taking elements of the P3 model further by using revenue and user charges to fund the asset, in whole or in part, and transfer more revenue, usage and ownership risks to the private sector. This allows for equity to be shared with the private sector for a risk-adjusted rate of return.

A P3 project was proposed for Mapleton's water/wastewater project, where CIB would provide debt financing. In July 2020, the town council concluded that self-financing was more advantageous to the township.

20. Waterfront Toronto

Topic

Since 2000, the federal government has partnered with Ontario and Toronto to revitalize Toronto's waterfront. Two major projects underway are Port Lands Flood Protection and the proposed Quayside development.

Responsive lines

• Since 2000, the Government of Canada has contributed close to
  $1 billion towards the revitalization of Toronto's waterfront. This investment has significant infrastructure, community building and economic development benefits.
• Port Lands Flood Protection is one of the largest civil works projects in North America. It involves flood remediation, river relocation and the creation of parks and a green zone. The government is actively engaged with its provincial and city partners to ensure the project meets the intended objectives of creating investment and unlocking the area for future development.
• The federal government welcomes Waterfront Toronto's approach to move forward and seek new partners on the Quayside project. This represents an opportunity to reimagine a dynamic, inclusive and community-oriented neighborhood that fosters economic growth for Toronto and Canada.

Background

Waterfront Toronto (formally known as the Toronto Waterfront Revitalization Corporation) was established under provincial legislation as a corporation without share capital to lead and implement the Toronto Waterfront Revitalization Initiative.

In October 2000, Canada, Ontario, and Toronto announced a commitment of $500 million each in contribution funding to waterfront revitalization, which supported a series of initial investments that served as the first step to transform the waterfront into sustainable new communities and to foster economic growth. Federal contribution funding was allocated primarily towards the planning, design, and construction of parks and other green and public spaces. Federal funding has also supported investments in urban infrastructure, strategic land acquisitions, and recreational facilities.

The current phase of waterfront revitalization includes flood protecting the Port Lands for which Canada, Ontario and Toronto are contributing funding equally in a total amount of $1.25 billion. Project funding was announced on June 28, 2017. Funding in the Main Estimates is for this project, which is underway and is expected to reach substantial completion in 2024.

Waterfront Toronto is also developing the Quayside project, which proposes to build an inclusive, next-generation sustainable neighbourhood on the Waterfront. The project involves a 12 acre site east of downtown Toronto that presently comprises a mix of land owned by Waterfront Toronto, the City and private land owners. No federal funds have been committed to the project to date.

From 2017 to 2020 Waterfront Toronto was partnered with Google affiliate Sidewalk Labs to develop a Master Innovation and Development Plan for Quayside. Following Sidewalk's withdrawal from the partnership in May 2020, Waterfront Toronto began exploring renewed goals and objectives for Quayside and held public engagement events on these in October 2020. On March 10, 2021, Waterfront Toronto released a Request for Qualifications for the Quayside development opportunity, which will lead to the procurement of new development partners for the project by late 2021.

A complementary project to Quayside is Waterfront Toronto's vision for Parliament Slip, a three acre inlet bordering Quayside which Waterfront proposes to transform from a shipping berth into an aquatic park.

21. Major Bridges

Topic

Infrastructure Canada's Major Bridge Projects are on track to support modern and resilient infrastructure that will increase the rate of economic growth in an inclusive and sustainable way.

Responsive lines

• Despite the current pandemic, construction is advancing on all project components of the Gordie Howe International Bridge, which will grow the economy, create jobs, promote trade and facilitate the flow of people and goods at Canada's busiest U.S. border crossing.
• The Samuel De Champlain Bridge carries $20 billion in international trade per year, 11 million public transit users and 40-50 million vehicles per year. The project has created thousands of jobs and is having a positive impact on the local, regional and national economies.
• The original Champlain Bridge is expected to be deconstructed by winter 2024. The $400 million deconstruction budget includes a material reuse program, environmental protection, research and development, and redevelopment of the shoreline.

Background

Gordie Howe International Bridge

The bridge will be owned by Canada and Michigan, and delivered by Windsor-Detroit Bridge Authority through a $5.7 billion, fixed-priced, public-private partnership with Bridging North America. Canada is funding the full amount with costs to be recouped from toll revenues. Construction activities and Community Benefits initiatives are continuing in accordance with government health directives. It is too soon to report on possible impacts due to the pandemic. To date, over 3500 workers have been engaged by Bridging North America in Canada and the United States with nearly 50% being local. Additionally, over 120 local businesses are working on the project. On March 23, 2021 Standard & Poor's downgraded the outlook for Bridging North America to BBB- (negative) from BBB- (stable). As a fixed price contract, the downgrade would not have an impact on the cost of the Project. Officials are following this closely.

The Samuel De Champlain Bridge Corridor Project

The Samuel De Champlain Bridge carries $20 billion in international trade annually, 11 million public transit users and 40-50 million vehicles. With a 125 year design life, the bridge opened to traffic in summer 2019, followed by a bike and pedestrian path in December 2019 and final paving of local roads and landscaping expected by the end of 2021. The $4.212 billion project for the design, construction, financing, operation, maintenance and rehabilitation of the Project over a 34 year period (2015–2049) by Signature on the Saint-Laurent Group, includes an additional $235 million as per an April 2018 agreement to settle construction-related claims. Operations-maintenance-rehabilitation activities have begun and are being overseen by the department.

The deconstruction of the original Champlain Bridge

The deconstruction of the original Champlain Bridge began in August 2020 and is being managed by Jacques Cartier and Champlain Bridges Incorporated (JCCBI). It is expected to finish in January 2024. The estimated cost of $400 million includes deconstruction work, environmental protection measures, material reuse programs, research and development and the end-of-project shoreline redevelopment. This includes $225.7 million for the design-deconstruct contract signed by JCCBI and Nouvel Horizon St-Laurent G.P. Direct costs for the implementation of sanitary measures related to a pandemic will be compiled at the end of the contract.

VI. Other Priorities

22. Economic Impacts of Infrastructure Investments

Topic

Infrastructure investment can play a large role in stimulating short and long-term economic recovery while achieving social and environmental outcomes.

Responsive lines

• Infrastructure investments provide both short- and long-term economic benefits. In the short term, investments support jobs across numerous sectors.
• Based on Statistics Canada data, 583,000 jobs were associated with the construction of infrastructure in 2019, an increase of 43,000 jobs compared to 2015.
• In 2019, $87 billion was invested in infrastructure. Of this, 68% ($59 billion) was invested by the public sector, an increase of 13.7% compared to investment levels in 2015.
• Over the same period, private sector investment increased by only 1.4%, largely due to the evolution of resource prices.

Background

Infrastructure investments are one of the best ways to support economic growth in both the short and long term. Investment creates immediate stimulus related to the building of projects, while in the longer term, investments can boost productivity and increase economic growth.

Based on 2019 Statistics Canada data, infrastructure investment in Canada totaled almost $87 billion, with 68% of this ($59 billion) being contributed by the public sector.

In total, 583,000 jobs across Canada are related to these investments. Over half of these jobs (300,000) are in the construction sector. Other sectors such as distributive trade and transportation services (64,000); information, finance and professional industries (125,000); and manufacturing (56,000) also benefit from the stimulus created by this construction.

The International Monetary Fund (IMF) has affirmed the important role of infrastructure investment in economic recovery and through its finding that, during periods of high uncertainty, increasing public investment in infrastructure by 1% of GDP could strengthen confidence in the recovery and boost GDP by 2.7%, private investment by 10%, and employment by 1.2% if investments are of high quality and if existing public and private debt burdens do not weaken the response of the private sector to the stimulus. In its view, public investment can play a central role in the recovery, with the potential to generate, directly, between 2 and 8 jobs for every million dollars spent on traditional infrastructure, and between 5 and 14 jobs for every million spent on research and development, green electricity, and efficient buildings.

In the longer term, infrastructure investment can also increase productivity, with studies finding that public infrastructure investment has been responsible for approximately half of all productivity increases in Canada in recent decades.

The quality of infrastructure in an economy can also support economic development in more subtle ways. Quality infrastructure makes a location more attractive to both firms and high-skilled individuals who can choose where they would like to be based. It can also facilitate trade, both within the country and internationally as the cost of transportation is decreased.

23. Construction Sector Update

Topic

While the construction sector has faced challenges related to the COVID-19 pandemic, it has remained relatively strong compared to other sectors of the economy.

• The construction sector plays a vital role in our economy, building the infrastructure we all use and providing good jobs across the country.
• The construction sector has faced COVID-19 challenges like other sectors, and has been a leader in ensuring the safety of its workers.
• Our Government understands the need for predictable funding. We have recently proposed an additional $2.2 billion to address short-term infrastructure priorities in municipalities and First Nations communities through the Gas Tax Fund and announced $14.9 billion for public transit projects over the next eight years, which includes permanent funding of $3 billion per year for Canadian communities beginning in 2026-27.

Background

The construction sector has done relatively well throughout the pandemic. Deemed an essential service in many circumstances, most construction projects have been allowed to continue despite recent workplace restrictions in Ontario and Quebec.

According to Statistics Canada, monthly data on GDP by industry shows that as of January 2021, the construction sector has grown in recent months but remains about 2% below its pre-COVID level in February 2020. Residential construction has performed better and is now at an all-time high. In contrast, non-residential construction declined since peaking in June 2020 and has plateaued in recent months (currently 16% below peak levels). Investment in building construction has followed a similar pattern, with growth driven by the residential sector. In the non-residential sector, public investment has helped offset declines in private sector activity.

In terms of employment, construction employment remains 3.5% below its seasonally adjusted pre-pandemic level in February 2020. However, the sector has recovered significantly in recent months. With strong growth across the country, construction employment in February 2021 was 22.7% above April 2020 lows.

There is anecdotal evidence that the sector has experienced some issues related to supply-chain issues, including shortages and price increases for lumber (prices have increased more than 50% over the past year). These issues have been more acute in the residential construction sector. Inputs for non-residential construction (including concrete and steel) have been less impacted (prices have increased by 5–10% over the past year).

While expressing strong approval of recent funding announcements on transit and climate resilient infrastructure, the industry has called for governments to provide additional long-term funding. As a consequence of the uncertainty created by COVID-19, private sector investment in infrastructure has declined. The industry has expressed the need for long-term public sector investment to be certain that investing in people and equipment makes economic sense.

24. Programs Administered Through the Federation of Canadian Municipalities

Topic

The Federation of Canadian Municipalities (FCM) is a key stakeholder and partner in the delivery of public infrastructure funding programs. The Government works with the FCM to respond to the needs of the communities they represent.

Responsive lines

• The Government of Canada works with the Federation of Canadian Municipalities (FCM) to help municipalities strengthen their asset management practices, reduce greenhouse gas emissions and manage the impacts of climate change.
• The FCM administers funding from Infrastructure Canada to support initiatives that help Canadian municipalities in making smart, data-driven decisions about key infrastructure to better prepare for and adapt to the new realities of climate change as well as reduce greenhouse gas emissions.
• These programs also support initiatives that advance innovative solutions to environmental challenges to improve air, water and land quality, reduce greenhouse gas emissions, and generate economic and social benefits to local communities.

Background

The Green Municipal Fund supports grants, loans and loan guarantees to encourage investment in environmental municipal projects. Since 2000, the Green Municipal Fund has financed more than 1,360 municipal sustainability initiatives. These projects have cut 2.7 million tonnes of greenhouse gas emissions through $946 million worth of approved sustainability initiatives.

Budget 2019 significantly expanded the work of the Green Municipal Fund. Three initiatives are being implemented through this additional funding:

• Making affordable and social housing units more energy efficient.
• Supporting home energy projects to make homes more affordable and energy efficient.
• Supporting activities that reduce greenhouse gas emissions from large community buildings.

The Federation of Canadian Municipalities (FCM) delivers two programs funded by Infrastructure Canada, that were launched in February 2017:

• The Municipal Asset Management Program
  • Initially designed as a five-year, $50 million program. Budget 2019 committed to provide an additional $60 million in funding extending the program for an additional three years to 2024-2025.
  • The program provides funding to municipal governments and municipal partners to support the strengthening of asset management practices, including planning, municipal data collection, and awareness among municipal leaders.
  • The program has funded over 700 municipal asset management projects and partner grants reflecting federal investments over $39 million.
• The Municipalities for Climate Innovation Program
  • Initially a five-year, $75 million program, the program duration has been extended by one year to ensure projects impacted by COVID-19 could be completed.
  • The program provides funding, training and resources to help Canadian municipalities adapt to the impacts of climate change and reduce greenhouse gas emissions. The Program is scheduled to end in March 2022 and is fully subscribed.
  • The program has funded 276 municipal climate capital projects, reflecting federal investment of $48.5 million.

25. Operational Funding for Municipalities and Transit – Safe Restart Agreement

Topic

Changes in mobility patterns linked to the COVID-19 pandemic have had a marked impact on transit and municipal revenues. While the government recently announced additional capital funding for transit, the Federation of Canadian Municipalities has called on the federal government to provide more support to municipalities to help them fund the operations of existing transit services. The Safe Restart Agreement, announced in July 2020, addressed these needs within the context of the pandemic by contributing up to $2 billion to support municipalities with COVID-19 operating costs for the next six to eight months. In addition, the government committed to cost-match over $2.3 billion to support any additional contributions by participating provinces or territories for public transit operating costs and pressures.

Responsive lines

• We recognize that municipal budgets have been hit hard since the pandemic began and we continue to work closely with all orders of government to address the ongoing challenges that it has created.
• In July 2020, the Government of Canada announced over $19 billion in funding for municipalities through the Safe Restart Agreement to help restart the economy while protecting the health of Canadians. This agreement included up to $2 billion to support municipalities with COVID-19 operating costs, as well as a commitment to cost-match more than $2.3 billion to support any additional provincial or territorial contributions for public transit.
• As we move forward, public transit remains a priority for the government. This is why we are creating permanent funding of $3 billion annually beginning in 2026-27 and investing $5.9 billion in new funds in public transit projects over the next five years.

Background

The costs of transit operations have traditionally been a municipal and provincial responsibility and the federal government's investments in transit have focused on capital expenditures. Stakeholders like the Federation of Canadian Municipalities and the Canadian Urban Transit Association have called on the federal government to begin supporting transit operational costs, often pointing to evidence that improved service frequency and availability are key drivers of increasing transit ridership.

Requests for federal operational support became more urgent when the pandemic's impact on mobility and commuting impacted transit revenues through significantly reduced ridership. Despite lower revenues, transit systems also faced pressures to maintain service levels to allow essential workers, and others unable to work from home, to access their jobs reliably and with appropriate social distancing.

In July 2020, the $19 billion Safe Restart Agreement (SRA) included a federal contribution of $2.3 billion to support any additional contributions by participating provinces or territories for public transit operating costs and pressures. Funds from this voluntary transit investment program are cost-shared 50/50 with provinces. The SRA was a whole of government approach undertaken by PCO, whereas the department's mandate remains focused on capital investments.

Municipal Finances

Prior to the COVID-19 outbreak, municipalities had relatively strong financial situations due to stable revenue streams and provincial requirements that they have a balanced operating budget, as well as legislated limitations on long-term borrowing.

Across Canada, the COVID-19 pandemic has resulted in pressures to municipal finances due to both significantly lower revenues and also higher expenses for COVID-related support programs. While the final data is not yet available, recent reports had suggested that municipal finances would result in a $12 billion shortfall compared to what was expected prior to the pandemic. The FCM forecasted the 2020 municipal operating deficit at $10-$15 billion over the first six months of the crisis.

In Ontario, for example, the Financial Accountability Office of Ontario projects that (before taking into account cost savings measures implemented by municipalities and federal-provincial financial support) the impact on Ontario municipal budgets would be $4.1 billion in 2020 and $2.7 billion in 2021, for a combined negative impact of $6.8 billion over two years. The most significant revenue losses for municipalities are from transit fees and fees from recreation, culture and other services. On the expense side, municipal spending increases are largely for temporary housing and homeless shelters, public health, and social and family services (including long-term care facilities).

In response to the pandemic, municipalities have implemented cost savings measures in 2020 (such as reduced operating hours for municipal facilities or lay-offs of temporary staff). The federal government has also worked with provincial governments to provide support. For example, Ontario announced up to $4.0 billion in financial support to municipalities, which included federal government support, leveraging the SRA. Some other provinces, such as BC, have changed rules to allow for more borrowing for longer time periods, while others such as Nova Scotia have allowed for operating loans for municipalities.

As a result of both federal and provincial support, municipalities have fared the pandemic crisis better than they otherwise would have. Currently, there is a stable and positive financial outlook for municipalities. Shortfalls in revenue (lower fee based/transit revenues) have been offset by SRA funding, steps to reduce costs and use of reserves. Most municipal governments are likely to have balanced budget or surplus in fiscal 2020.

Municipalities have managed to reduce operating costs (e.g., lay-offs, fuel, electricity) and adjusted capital plans to focus on immediate needs. Costs to implement COVID-19 health safety measures were below 5% and much lower than expected.

Municipalities with land transfer tax have benefited from high volume of home sales (e.g., Toronto, Laval and Montréal). Housing permit revenues have increased in some municipalities, as there was more new building activity; but in others such as Calgary there has been less demand for new builds due to the slowdown in the energy sector. Municipalities continue to collect property taxes as planned, and most are planning to maintain or increase property taxes. 

Financial credit agencies recently reviewed a number of municipalities such as Toronto, Edmonton, Calgary, Saskatoon, Regina, York, Sudbury, Guelph, Montréal, Laval and Mississauga and all have retained their strong credit ratings. There continues to be high demand for municipal bonds.