Gas Tax Fund Administrative Agreement - Canada - Quebec - 2014

PDF Version (Size: 71.42 KB)

Table of contents


THE GOVERNMENT OF CANADA ("Canada"), represented by the President of the Queen's Privy Council for Canada, Minister of Infrastructure, Communities and Intergovernmental Affairs,


THE GOVERNMENT OF QUEBEC ("Quebec"), represented by the Minister of Finance and the Minister responsible for Canadian Intergovernmental Affairs and the Canadian Francophonie.

Hereinafter: "the Parties";


Respect for Jurisdictions

WHEREAS municipal and local affairs fall under the exclusive jurisdiction of Quebec;

WHEREAS the funds covered by this Agreement will be used to benefit urban, rural and remote municipalities in accordance with the municipal and local infrastructure needs and priorities of Quebec;

Flexible Approach

WHEREAS the implementation mechanisms of this Agreement must be appropriate for the regions and employ a flexible approach based on existing practices and simplified accountability structures;

Equity between Jurisdictions

WHEREAS the GTF recognizes the importance of ensuring that the allocation between the jurisdictions is equitable while supporting meaningful infrastructure investments in the least populated provinces and territories;

Long-term Solutions

WHEREAS the GTF provides long-term funding for municipalities and municipal organizations in accordance with the needs and priorities of Quebec, while respecting the principle of complementarily under which federal funding is over and above any planned investments;


WHEREAS Canada and Quebec commit to demonstrating transparency, diligence and efficiency to ensure that the funds covered by this Agreement are promptly made available to the municipalities;

AND WHEREAS the GTF is administered through a governance process that sets out, among other things, the roles of the federal government and the beneficiaries with regard to performance reports, regular program evaluations, and regular communication of progress to Canadians.

1. Definitions

The terms below have the meaning given to them by the corresponding definition, unless the context clearly dictates otherwise:

"Monitoring Committee"
means the monitoring committee whose mechanism and composition are described in Schedule C;
means this Gas Tax Fund Administrative Agreement and its Schedules;
"Previous Agreement"
means the Agreement on the transfer of revenue from a portion of the federal gasoline excise tax on gas and the provision of additional money under Act C-66 to provide funding for municipal and local infrastructures, in a sustainable development context, made on November 28, 2005 between the Government of Canada and the Government of Quebec and amended on May 13, 2009;
means the Gas Tax Fund, a program established by the Government of Canada establishing the terms and conditions of the administration of funds allocated under section 161 of the Keeping Canada's Economy and Jobs Growing Act, (S.C. 2011, c. 24) as amended by section 233 of the Economic Action Plan 2013 Act, No. 1 (S.C. 2013, c. 33);
"Ministers responsible"
in the case of Quebec, the ministers responsible for the agreement are the Minister of Finance, the Minister of Municipal Affairs and Land Occupancy, the Minister of Transport, and the Minister Responsible for Canadian Intergovernmental Affairs and the Canadian Francophonie. In the case of the Government of Canada, the minister responsible for the agreement is the Minister of Infrastructure, Communities and Intergovernmental Affairs.
"Municipality or municipal body"
for the purposes of this Agreement, will be defined as follows:
  • Municipalities, as well as bodies declared by law to be the mandatary or agent of a municipality, bodies whose boards of directors are composed of a majority of members of the council of a municipality, and also bodies whose budgets are adopted by a municipality, or of which more than half of the financing is assumed by a municipality;
  • metropolitan communities, regional county municipalities, intermunicipal boards, transit authorities, intermunicipal boards of transport, the Kativik Regional Government and any other bodies whose boards of directors are composed, in the majority, of members of the councils of several municipalities;
  • mixed enterprise companies established under the Act respecting mixed enterprise companies in the municipal sector, R.S.Q. c. S-25.01;
  • a legal person, partnership or body considered to be a municipal body under the Act respecting the Société de financement des infrastructures locales du Québec, R.S.Q. c. S-11.0102.
means the Société de financement des infrastructures locales du Québec, established pursuant to the Act respecting the Société de financement des infrastructures locales du Québec, R.S.Q. c. S-11.0102.

2. Purpose

This Agreement defines the roles and responsibilities of each of the Parties with regard to federal portion of the GTF.

3. Background

  • The Parties recognize the success of the previous agreement;
  • Pursuant to section 161 of the Keeping Canada's Economy and Jobs Growing Act (S.C. 2011, c. 24), the Government of Canada will provide a sum of up to $2 billion each year for the purpose of municipal, regional and First Nations infrastructure beginning in 2014-2015.
  • As part of the 2013 Economic Action Plan, the Government of Canada announced a renewed GTF including indexing at two percent per year, to be applied in $100 million increments as set out in section 16 of the Keeping Canada's Economy and Jobs Growing Act (S.C. 2011, c. 24) and as amended by section 233 of the Economic Action Plan 2013 Act, No. 1 (S.C. 2013, c. 33).
  • Canada recognizes Quebec's sound asset management practices, specifically lifecycle cost assessment and solid asset management plans.
  • Solid and modern infrastructure helps make municipalities more prosperous and dynamic, and contributes to the development of Quebec.
  • Quebec has significant municipal and local infrastructure needs, which require major investments over the coming years.
  • On June 4, 2014, Quebec announced the 2014-2024 Quebec Infrastructure Plan, with investments of up to $90.3 billion over 10 years to maintain and develop public infrastructure.
  • Quebec agrees that federal funding is over and above the expenditures planned by municipalities for municipal and local infrastructure and the federal funds provided to the municipalities to fund this infrastructure.
  • The federal funding will be used for the benefit of urban, rural and remote municipalities based on Quebec's municipal and local infrastructure needs and priorities.
  • Quebec established SOFIL to contribute to the funding of municipal and local infrastructure.
  • SOFIL is a legal person and mandatary of the State, whose affairs are administered by a Board of Directors appointed by Quebec, whose books and accounts are audited annually by the Auditor General of Quebec and whose annual report is tabled in the National Assembly of Quebec.
  • The Board of Directors of SOFIL is made up of representatives of Quebec and municipal council members appointed after consultations with municipal representatives, including representatives of the Union des municipalités du Québec and the Fédération québécoise des municipalités.
  • The sole purpose of SOFIL is to contribute financial assistance to municipalities and municipal bodies to assist in the implementation of infrastructure projects.
  • Quebec agrees with the municipal representatives regarding the importance of an equitable allocation of financial assistance among large and small municipalities in Quebec.

4. Schedules

The following schedules are attached to, and form part of, this Agreement:

Schedule A - Reporting, Audit and Evaluation

Schedule B – Communications Protocol

Schedule C – Agreement Monitoring Committee

Schedule D "Government of Quebec Orders 297-2012 and 594-2013" and Schedule E "Investment Objectives of the Government of Quebec" are included for information purposes.

5. GTF

5.1 Any funding that may be provided by Canada to Quebec under the GTF, once paid, and any interest that may be generated by Quebec on this funding, will be administered by Quebec in accordance with the terms and conditions defined in this Agreement.

5.2 Notwithstanding any wording in the previous agreement that states otherwise, any uncommitted funds from the previous agreement and any interest earned on these funds will be subject to the terms and conditions of this Agreement.

5.3 The funding provided for under this Agreement is independent of federal funds from other infrastructure funding programs. However, the GTF amount may be combined with federal funds under other infrastructure programs to fund a project, subject to the maximum federal contribution set out in the program funding agreement.

6. Minimum capitalization threshold

The GTF is provided over and above the provincial funding currently allocated to the municipalities and municipal bodies to fund municipal and local infrastructure. The GTF is also provided over and above municipal expenditures on municipal and local infrastructure. Average annual capital expenditures for infrastructure by municipalities or municipal bodies in Quebec will be no lower than the minimum capitalization threshold identified in the orders adopted by Quebec with respect to the payment terms and conditions for SOFIL's financial assistance, available in Schedule D.

7. Eligible investment categories

The eligible investment categories under the GTF will continue to include: public transit, local roads and bridges, wastewater, drinking water, solid waste and community energy systems and community capacity building. Furthermore, as announced in the 2013 Economic Action Plan, new eligible investment categories have been added to include roads, regional and local airports, short-line railways, shot sea shipping, disaster mitigation, broadband connectivity, brownfield redevelopment, cultural infrastructure, tourism infrastructure, sports infrastructure, and recreational infrastructure.

8. Eligible and ineligible costs

8.1 Eligible costs are those associated with: acquiring, planning, designing, constructing or renovating a tangible capital asset; building municipal capacities; and improving local and regional planning and asset management, as well as joint communication activities related to the projects, such as public announcements and federal signage.

8.2 Ineligible costs are those associated with: equipment leasing by the municipality; any indirect expenses, including salaries and benefits for employees of the municipality or the municipal body; and operating costs or direct or indirect administrative costs and, more specifically, costs related to planning, engineering, architecture, supervision, management, as well as other activities normally carried out by municipal staff, except for the costs listed in section 8.1, municipal or municipal body taxes that are eligible for a rebate, the purchase of land or any interest therein, legal fees, and routine repair and maintenance costs.

9. Asset management

Quebec will continue its sound municipal asset management practices.

10. Reports

Quebec will provide Canada, by September 30 of each year, with data, information and reports prepared by SOFIL concerning the use of Agreement funds flowing through SOFIL, as described in Schedule A (Reporting, Audit and Evaluation Protocol). Quebec will permit Canada to disseminate them and make them available to other provincial and territorial governments.

11. Communications

Any communications respecting this Agreement will be carried out as provided under Schedule B (Communications Protocol).

12. Agreement monitoring committee

Within ten (10) days following the signing of the Agreement, the Parties will inform each other of the members appointed to sit on the Agreement Monitoring Committee. The Committee's make-up and terms of reference are defined in Schedule C (Agreement Monitoring Committee).

13. Prevention of disputes

13.1 The Committee will endeavour to prevent disputes over this Agreement through the pooling of information among governments, prior notices, timely consultations, and discussions and clarifications to resolve issues as they arise.

13.2 The Parties agree to keep each other informed of any disagreement or contentious issue, and the Committee will attempt to resolve it. If the disagreement or contentious issue cannot be resolved by the Committee, it will be submitted to each Party's senior management, and, if necessary, to the Ministers responsible for this Agreement. If the disagreement or contentious issue persists, Canada and Quebec will take the necessary actions.

14. Duration of this agreement

14.1 This Agreement comes into effect on April 1, 2014 and will remain in effect until March 1, 2024, unless the parties agree to renew it. If this Agreement is not renewed, the funds transferred by Canada and any unspent interest accrued as of March 31, 2024, will continue to be subject to this Agreement until a time determined by the Parties.

14.2 Either Party may terminate the Agreement by giving two fiscal years' notice in writing to the other Party. If this Agreement is terminated, the funds transferred by Canada and any unspent interest accrued will continue to be subject to this Agreement until a time determined by the Parties.

14.3 The Parties agree to review the terms and conditions of this Agreement no later than March 31, 2018.

14.4 This Agreement will not be amended, unless the amendments are made jointly and in writing by the Parties.

15. General

15.1 Notwithstanding section 14 (Duration of this Agreement), the terms and conditions of this Agreement, which by their nature extend beyond the expiration or termination of this Agreement, will survive any expiration or termination of this Agreement.

15.2 Quebec agrees to require third parties benefitting from funds under this Agreement to be solely responsible and indemnify and save harmless Canada, Quebec and their ministers, officers, employees and agents/mandataries from all claims, demands, losses, damages and costs, actions, suits or other proceedings by whomsoever brought or prosecuted in any manner in respect of any matter arising from GTF monies or investments made with these monies.

15.3 Notwithstanding anything in this Agreement, all of the obligations contracted by Quebec pursuant to this Agreement will be subject to Quebec's Financial Administration Act, the Act respecting the Société de financement des infrastructures locales du Québec, the Act respecting public transit authorities, the Act respecting land use planning and development and any other related Quebec or federal legislation.

16. Notice

Any notice, information or document provided for under this Agreement will be deemed effectively given if sent by letter, postage or other fees paid, by facsimile or by electronic mail (e-mail). Any notice will be deemed to have been received on delivery and, except in periods of postal disruption, any notice mailed will be deemed to have been received eight (8) working days after being mailed.

Notices or communications addressed to Canada will be sent to the following address:

Assistant Deputy Minister, Program Operations
Infrastructure Canada
1100 - 180 Kent St.
Ottawa, Ontario  K1P 0B6
Fax: 613-960-9423

Ministère des Finances
12 Saint-Louis Street
Québec City, Quebec G1R 5L3
Fax: 418-646-0923


In witness whereof, this Agreement has been signed in three (3) copies on behalf of the Government of Canada by the Minister of Infrastructure, Communities and Intergovernmental Affairs, on behalf of the Government of Quebec, by the Minister of Finance as well as the Minister responsible for Canadian Intergovernmental Affairs and the Canadian Francophonie.


Minister of Finance
Carlos Leitão


Minister responsible for Canadian Intergovernmental Affairs and the Canadian Francophonie
Jean-Marc Fournier



Minister of Infrastructure, Communities and Intergovernmental Affairs
Denis Lebel


SCHEDULE A – Reports, Audit and Evaluation

1. Reporting and Reasonable Assurance

Quebec will provide Canada with the information, details and reports prepared by SOFIL with respect to the use of funds under this Agreement which includes:

  • GTF amounts received from Canada;
  • GTF amounts transferred to municipalities and municipal bodies;
  • interest earned by SOFIL;
  • GTF amounts allocated to administration by SOFIL; and
  • financial statements audited by the Auditor General of Quebec.

Quebec will also provide Canada with annual statements signed by external auditors, providing SOFIL management with reasonable assurance that adequate control systems are in place to ensure that the funds are used appropriately and for purposes specified by the Gas Tax Fund.

Canada can conduct, at any time and at its own cost, and after Quebec is given 30 days notice, any audit related to the management of this Agreement for which Quebec agrees to provide the necessary data and information.

2. Project Information

Quebec will provide Canada with, on an annual basis and as part of the Monitoring Committee, any information available on funded projects.

3. Outcomes Report

The Monitoring Committee will provide the Parties with a periodic report every five (5) years to report on the progress and outcomes of this Agreement.

SCHEDULE B - Communications Protocol


1.1 This Schedule sets out the guidelines that govern the creation and planning of communication activities. In general, this Protocol aims to ensure joint, structured and efficient communication activities.


2.1 The Parties recognize the importance of conducting joint communication activities based on the principles of openness, transparency and coherence.

2.2 The Parties agree to provide visibility to the Government of Canada and the Government of Quebec in all their communication activities.

2.3 Communication activities may include public or media events, including social media, press releases, reports, Web articles, project signs, digital signs, publications, videos, advertising campaigns, editorials, awards programs and multimedia products.

2.4. The Parties agree to organize announcements for funded projects.

2.5. The Parties agree to inform each other at least fifteen (15) days in advance of any planned communication activities, including advertising campaigns.

2.6. Quebec agrees to provide Canada with, on an annual basis, advance notice on projects funded for that year before the construction season. The Parties will both agree, as part of the joint communication plan, on the date this information will be provided. This information will include at minimum: the name of the recipient, the name of the funded project, the category of the funded project, a brief but meaningful description of the funded project, the amount of investment for the funded project and the anticipated date for the commencement of the work.


3.1 The Parties mandate the Agreement Monitoring Committee to develop and adopt a joint communication approach, in the form of a communication plan, within sixty (60) working days of the first Monitoring Committee meeting after this Agreement comes into force. The communication plan will outline:

  • the information needs, including the format for transmitting information provided by Quebec;
  • the communication methods and procedures to facilitate communication between Canada and Quebec;
  • the release schedules that specify when each type of information is released, as well as the frequency of dissemination, if applicable;
  • the objectives and expected outcomes of the communication activities; and
  • the roles and responsibilities of each Party.

3.2 The Parties agree that the achievements under the joint communication plan will be reported to the Monitoring Committee once a year. The Monitoring Committee will oversee the implementation of the communications approach and make any changes necessary.

3.3 The Parties agree to evaluate the efficiency of the joint communication plan once a year and, if needed, to update it and propose changes. Any change will be presented to the co-chairs of the Monitoring Committee for their approval.

3.4 The Parties agree that the joint communication plan will set out a mechanism to ensure that the most up-to-date information possible on funded projects is available for Canada in order to support media events and announcements related to these funded projects.

4. Project signage

4.1. At Canada's request, signage, static signs or permanent plaques indicating the financial contribution of the Parties to the funded project will be installed at the sites of funded projects where the context permits and where:

  • the Parties agree; and/or
  • the project is of particular interest to one of the Parties.

4.2. Quebec is responsible for installing signs for funded projects, unless another agreement is made between the Parties.

4.3. The costs related to making and mounting the signs are the responsibility of the recipient and funded through their assistance envelope allocated for the said project.

4.4. All the Parties' signage can be removed twenty-one (21) days after the end of said work.

4.5. Quebec agrees to inform Canada about the installation of signage at the frequency set out in the communication plan.

4.6. Quebec and Canada agree that no signage may be installed on vehicles and rolling stock in order to comply with the regulations in place in Quebec.

5. Media events and announcements for funded projects

5.1. Media events may include press conferences, public announcements, official events or ceremonies and press releases.

5.2. Any Party may request that a media event be held.

5.3. Media events related to funded projects will not take place before each of the Parties has been informed and has agreed accordingly.

5.4. Each Party agrees to inform the other, at least fifteen (15) working days in advance, of its intention to organize a media event, which will be held at a location and on a date which the Parties and recipient have agreed upon. Each Party will have the opportunity to participate in such events by assigning a designated representative.

5.5. Any joint communication material related to media events will be submitted to Canada and recognize the funding allocated by the Parties.

5.5.1 Joint communication material related to media events will be produced by the Government of Quebec after being shared with the Government of Canada to finalize the documents.

5.6. All media events and joint communication products will follow the Table of Precedence for Canada.

6. Program communications

6.1. The Parties may include messages in their own communication products and during their own communication activities related to the Gas Tax Fund (GTF).

6.2. The Party that organizes the communication activities will give the other Party the opportunity to participate, if applicable.

6.3. The Parties agree to ensure accessibility to GTF public communication products prepared by one Party or, if found on the Web, establish hyperlinks.

6.4. Notwithstanding section 5 (Media Events and Announcements for Funded Projects), Canada reserves the right to meet its obligations to communicate with Canadians about the GTF and to exercise this right with respect to its communication activities and products.

7. Operational communications

7.1. Quebec has sole responsibility for operational communications related to funded projects, which includes calls for tender, construction and public safety notices.

7.2. Quebec will inform Canada if issues about the media or stakeholders are raised as part of a funded project. Canada shall inform Quebec, if applicable, about inquiries from the media with regard to a funded project.

SCHEDULE C – Agreement Monitoring Committee

  1. The Committee will be the official forum for discussing the implementation of the Agreement, particularly with respect to the Communications Protocol and dispute resolution.
  2. The Committee will consist of three representatives for Quebec (one for the Minister of Transport, one for the Minister of Municipal Affairs and Regions, and one for the Minister of Finance) and three representatives for Canada.
  3. The Committee will be headed by two (2) co-chairs. Each Party will appoint one co-chair from among its three members.
  4. The decisions of the Committee will be made on a consensus basis.
  5. The Committee will set its operating procedures and priorities.


SCHEDULE E – Investment Objectives of the Government of Quebec

The Government of Quebec has set the following directions with respect to how funds transferred from the federal government to the SOFIL under this Agreement from 2014-2015 to 2023-2024 will be used:

  • SOFIL will disburse the funds to municipalities and municipal bodies to contribute to infrastructure projects related public transit, drinking water, wastewater, local roads and other types of municipal infrastructure, such as cultural, community, sports or recreational infrastructure.
  • At least 20% of these funds (assuming that all of the monies provided for under the Agreement are transferred by the federal government) will be devoted to public transit infrastructure over the next five years, and public transit use in the municipalities will be taken into account when the funds are disbursed.
  • Slightly over 20% of these funds will be devoted to small communities over the next five years, so as to give rural residents of Quebec a slightly larger than proportional share.