Prime Minister Stephen Harper fired the starting pistol on a $14-billion spending spree on infrastructure, announcing the long-awaited details on a Building Canada Fund first mentioned in last year’s budget.
Though the fund covers the next 10 years, Canada’s provinces, cities and towns will be pushing to carve up the funding as soon as possible in order to cover the cost of large construction projects like highways and transit that could run over several years.
The fund replaces an existing program that is set to expire. Provinces and municipalities will be able to apply to Ottawa for funding. Thursday’s announcement indicates that Ottawa will fund up to one third of the cost of most infrastructure projects, but the plan includes some exceptions.
Ottawa will fund up to 50 per cent of the cost of provincially owned highways and major roads, as well as up to 50 per cent for public transit.
The Prime Minister made the announcement at a museum and community centre in Gormley, Ont., north of Toronto.
Thursday’s announcement also states that the $4-billion National Infrastructure Component will “not be allocated to provinces and territories but will be determined by project merit, guided by federal priorities.”
Under the remaining $10-billion Provincial-Territorial Infrastructure Component, each province will receive a base amount of $250-million plus a per capita allocation, based on 2011 figures.
The exception allowing Ottawa to fund up to 50 per cent of a public transit project allows it to get involved in projects where a municipality and a province may not be on the same page. An example of this is the first and only commitment Mr. Harper has made so far regarding the new fund, when he promised $660-million toward a Scarborough subway. Toronto Mayor Rob Ford has been a major advocate of the project, and Ontario’s Liberal government initially questioned whether there were better alternatives before eventually supporting the project.
Mr. Harper’s subway announcement in September left Canada’s other mayors scratching their heads as to why Mr. Ford was able to secure a promise worth hundreds of millions from a fund that had not yet been launched.
The $14-billion Building Canada Fund is one part of a larger Building Canada Plan worth $47.5-billion over 10 years. That amount includes a $32-billion Community Improvement Fund, which is made of transfers from the Gas Tax Fund and tax rebates that go directly to municipalities. The larger plan also includes a $1.2-billion P3 Canada Fund for public-private partnerships.
Ottawa has indicated that there is also an additional $6-billion left from the previous Building Canada Plan that expires in March.
The opposition NDP and Liberals have argued that the new fund does not amount to increased infrastructure funding on average. Both parties are calling for Ottawa to spend considerably more on infrastructure.