Happy to hear about the infrastructure funding in this week’s budget, local officials say, however, the devil is in the details.
The $12 billion announced in the budget could prove helpful as municipalities cope with aging roads, bridges and water pipes, but the timing and implementation of the funding program will really tell just how useful it will be as an economic stimulus measure.
There’s some concern the money won’t move fast enough.
“I think it’s good, providing the funding flows readily and easily,” Waterloo Region Chair Ken Seiling said in an interview.
Funding for infrastructure is seen as a two-pronged approach that will address both the country’s ailing infrastructure, as well as help stem the economic downturn – creating and maintaining jobs through the realization of construction-ready projects will help stimulate the economy.
“In the area of public works we will be able to expand some contract work, but the area I think that’s really important is the care and upgrade of some of the social housing stock across the region. There’s a huge backlog of work and they’ve indicated they’re prepared to fund some of that work and that can happen fairly quickly if the money flows,” said Seiling.
In addition to the $12 billion for infrastructure – $5 billion of which had been previously announced – the budget also includes $8.3 billion for training to support people who have lost their jobs; $7.8 billion for housing and home renovation credits; and $2.7 billion in short-term loans to struggling car manufacturers.
The federal government predicts a $34-billion deficit in 2009, followed by forecasted deficits totalling $85 billion by 2013. All told, it plans to spend $40 billion over the next two years to stimulate the economy, augmented by some $20 billion in tax cuts over five years.
The budget will also give municipalities access to significant new funding, available under provincial, territorial and municipal infrastructure initiatives, and will accelerate and expand historic federal investments in infrastructure.
Indeed, one of the key issues leading up to the tabling of the budget was the complaint from municipalities that grant monies were not being freed up fast enough. The delivery of billions of dollars allocated through the Harper government’s Building Canada program ($33-billion infrastructure program in seven years) has been hampered by delays in negotiations between the federal and provincial governments.
“I think people would agree that the money hasn’t flowed very easily, generally speaking, part of it having to do with federal and provincial agreements and a variety of things – but the bottom line is: regardless of the cause the money hasn’t flowed as quickly as people would have liked,” said Seiling.
That’s certainly been the case in Woolwich, where projects have lingered while the municipality waited for confirmation of the federal portion. Even then, there have been long lag times between the completion of the infrastructure work and reimbursement from Ottawa, noted Mayor Bill Strauss. Such arrangements are hard on the township’s limited financial resources.
As with past infrastructure programs, the budget calls on the province to front $9 billion and requires that municipalities chip in as well, with as-of-yet unspecified amounts. That could prove difficult for some municipalities, said Wellesley’s chief administrative officer, Susan Duke.
“We haven’t heard the details on the funding formula; in the past there’s been a full gamut from each level of government paying a third to 100 per cent funding. There are suggestions that it’s going to be on a one-third-one-third-one-third basis and that’s going to leave some municipalities out because they will not have their one-third available.”
That said, Duke noted that she finds the budget announcement encouraging and is anxious to learn about the nuts-and-bolts of how the money will be doled out.
“I’m certainly encouraged to see that they’re looking at infrastructure funding for municipalities having a population less than 100,000,” she said, noting that previous federal-provincial initiatives, such as COMRIF (Canada-Ontario Municipal Rural Infrastructure Fund), made it difficult for some municipalities to vie for money in the competitive application procedure.
Wellesley received funding in the first intake of COMRIF in 2005 but not in the second; the municipality chose not to apply for the third round, noting that the high costs of conducting engineering studies for the submission could not guarantee that the monies would be secured.
“I’m still anxious to see the details of whether or not it is going to be a competition based application or whether they are going to find a way to streamline the funding.”
That said, Duke noted that Wellesley is ready with a number of construction projects on tap for 2009.
“Until the capital budget is approved we don’t know what work is going forward but we can do a number of projects and it might be a question of determining which one we can afford to do.”
