B.C. government won’t match transit funding in federal budget

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There was a jubilant mood in British Columbia on Wednesday after the federal budget announcement of billions of dollars that will be poured into big transit projects in the Vancouver region, affordable housing and child care.

But that mood quickly had a pail of cold water thrown over it, as B.C. Finance Minister Mike de Jong said the province will not match the record-setting $2.2-billion that Ottawa has committed for transit – something mayors have said is essential to carrying out the 10-year much-needed expansion plan for the region.

Mr. de Jong noted the province is already committed to pitching in 33 per cent, while the federal government's contribution amounts to 40 per cent.

Federal budget highlights: 10 things you need to know

"There should be a way [for municipalities] to find the remaining 27 per cent," he told reporters at an unrelated event in Vancouver Wednesday.

"And we're anxious, and willing, to work with local leadership to settle on that final approach."

Surrey Mayor Linda Hepner called that response "disappointing."

"They should be not only supporting this dollar for dollar, but also the whole vision," she said.

Vancouver Mayor Gregor Robertson – reached out of town before Mr. de Jong made his statement – had said that all the plans for transit improvement hinged on the province making a big commitment, matching the money the federal government has allocated.

"Everything depends on the B.C. government now," said Mr. Robertson, who called the federal investment a game-changer.

Both Ms. Hepner and Mr. Robertson warned that the province needs to commit to an amount soon, because every delay in procurement means higher costs.

The finance minister suggested municipal governments attempt to make up the shortfall by bringing in more money from developers in exchange for density along new transit corridors.

The federal funding envelope will give a fixed dollar amount for transit expansion, rather than a definite share. In that envelope, it allows for up to 40 per cent of expansion projects to be covered by federal money and up to 50 per cent of rehabilitation projects.

Those formulas could factor into the spring election campaign in British Columbia.

The Opposition New Democrats have said they would cover 40 per cent of everything in the mayors' 10-year plan for transit expansion, which was pegged at $7.5-billion when it was finalized three years ago.

The Greens have said 33 per cent of major projects is the starting point and they would assess their commitment once the federal announcement was made.

Mr. Robertson said the provincial parties also need to agree to work with mayors on how to pay for the final piece of the plan, which is not be covered by any federal, provincial or regional money promised so far, even if the province did match the federal amount. The final cost for the 10-year plan will be higher than the $7.5-billion pricetag worked out in 2014, but no one knows yet how much higher.

Besides transit money, the other good news for many was the commitment to improvements for affordable housing and child care.

The budget promised $11-billion over 11 years for affordable housing across the country and $7-billion for early learning and childcare, also over 11 years. There were no regional breakdowns.

The $11-billion promised doesn't work out to a huge bump in cash for units, said Kishone Roy, chief executive of the BC Non-Profit Housing Association.

But it is at the same level as last year's budget and will help produce more low-cost housing across the country.

However, he and others said the big improvement in the Trudeau government's new approach is that there will be a housing finance authority set up, which will allow non-profit groups, working in partnership with cities, private developers and others, to borrow money at lower rates.

"This allows us to borrow and pull some pieces together. The money is going to help hundreds of thousands of Canadians," Mr. Roy said.

Thom Armstrong, the executive director of the Co-operative Housing Federation of BC, agreed. "They're creating the conditions for partnerships that are going to build and maintain thousands of new homes. It will really make a dent."

Mr. Robertson said he's hopeful that some of the federal money can be used in current housing projects Vancouver is planning to help reduce rents beyond what the city is able to get by giving nearly free land to projects.

The city currently is holding 20 sites for housing projects. It is contributing land and some of the sites have had provincial money promised as part of a big announcement last year to create 2,900 new affordable-housing units.

"With the housing dollars, the key is how quickly they can flow," the mayor said. "Our affordable-housing situation is dire. We can't afford to wait five or 10 years."

He and the local co-op housing federation were relieved to see, as well, that the government has committed to maintaining subsidies for low-income renters in social and co-op housing.

There had been fears that at least 1,500 people would lose those subsidies as operating agreements between co-ops and the federal government expired in 2017. Mr. Robertson said it was welcome to see the government's emphasis on childcare, much needed in Vancouver, that some people weren't sure would come through.

With files from Mike Hager

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Budget bullet points

Here are some highlights from the federal budget that will affect British Columbia:

The federal government plans to spend $20.1-billion on public transit over the next 11 years; of that, the Metro Vancouver Mayors' Council estimates about $2.2-billion is headed into the region to fund a new subway line along Vancouver's Broadway corridor and Surrey's proposed light-rail project.

The budget acknowledges the instability in the Vancouver region's housing market, where prices increased by as much as 40 per cent before levelling off or declining since last year. To keep better tabs on what's happening, the budget includes $39.9-million for Statistics Canada to develop a new system to track the housing market, including the level of foreign ownership, which has been blamed on price increases in Vancouver and Toronto. British Columbia has been tracking foreign buyers since last June.

Municipalities in B.C. will be vying for a share of $11.2-billion in funding for affordable housing, though it's not clear how much of that money is destined for cities such as Vancouver, or how much housing will be added as a result.

There is also $7-billion for early learning and child care over the next 11 years, though there is no regional breakdown of where that funding will go.

The budget promises an extra $35-million over five years to fund the response to the ongoing opioid crisis, in addition to $65-million already announced earlier this year. B.C. has been among the hardest hit provinces, with more than 900 people killed last year and a death toll that continues to increase. As well, naloxone, a drug that can reverse the effects of an overdose, will no longer be subject to GST when dispensed without a prescription.

A $2-billion National Trade Corridors Fund will upgrade rail and highway corridors across the country, including in the Vancouver region, which the budget identifies as vital to expanding trade with Asia.

The Sidney Centre for Plant Health on Vancouver Island will be replaced as part of $80-million over five years to build or maintain federal science facilities. The Sidney project will be the first to receive part of that funding in the coming year.

The budget includes money to fund recently signed health-care agreements with the provinces. British Columbia's agreement, signed in last month, included $785-million for home care and $650-million for mental-health programs over 10 years.

James Keller