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Liberals set to roll out billions of dollars in second phase of infrastructure funding

After months of negotiations, Amarjeet Sohi says he's ready to launch the Liberal government's centrepiece infrastructure program for major new projects across the country.

The federal Infrastructure Minister announced his first deal on Wednesday – with the Northwest Territories – and more are planned later this month.

The deals outline the precise amounts Ottawa will transfer to each province and territory over the coming decade for specific categories, including public transit and green infrastructure projects such as flood mitigation and renewable power programs.

"We are ready to support projects today and we are ready to support projects whenever communities are ready to advance them," Mr. Sohi told The Globe and Mail on Wednesday in an interview from Yellowknife.

At stake is what the government calls the second phase of its infrastructure program. The first two Liberal budgets outlined a plan to nearly double federal spending on infrastructure, to more than $180-billion over 12 years. The government has already approved nearly $12-billion in spending over five years for what it called Phase 1, which is meant to prioritize repairs of existing infrastructure and planning work for bigger projects.

However, it is the second phase of funding that is expected to fund major new projects sitting on the wish lists of Canadian municipalities. This second phase is worth about $33-billion and covers the 2018-28 period.

Mr. Sohi had previously set March as the deadline for reaching deals with all of the provinces and territories and he still hopes to meet that deadline. He said Ottawa and the provinces have agreed on the major issues, such as percentage contributions to large projects.

"We don't see any hurdles whatsoever in signing the agreements," he said. "If there are any possible delays, it will be because of logistical reasons. Other than that, we are very confident that we are meeting our expected date."

However, one Quebec government official, who spoke to The Globe on the condition of anonymity, said there are still important details to work out. Quebec wants more flexibility in terms of the types of projects that would qualify under Ottawa's proposed rules. One of the major points of contention during the Phase 2 negotiations was over the percentages that each level of government would cover when it comes to funding major new infrastructure.

Ottawa has previously stated that it will cover "up to" 40 per cent of the cost of municipal projects.

The Federation of Canadian Municipalities has urged provinces and territories to match that amount, with cities covering the remaining 20 per cent. However, no province has publicly agreed to such a contribution. Mr. Sohi declined to provide specifics on Wednesday on the details of the agreements with the provinces.

The recent federal budget changed the timing of federal infrastructure spending, moving money from the early years into the outer years of the 10-year plan. For instance, the revised $81.2-billion "Investing in Canada Plan" budgets $3.1-billion for 2018-19, but that increases to more than $11-billion a year in the final three years.

Mr. Sohi said this is purely an accounting issue to manage the fact that Ottawa tends to transfer its share of funds at the end of a project.

"It's just a matter of when we get the bill," he said. "We will not hold back on projects at all as long as those projects fit in to helping us achieve our federal objectives and meet the criteria and we will approve them as soon as we get them." Federation of Canadian Municipalities chief executive Brock Carlton said he's encouraged that Ottawa is preparing to announce the Phase 2 deals and predicted that cities will act quickly to start new projects.

"I think it will lead to some obvious benefits fairly quickly," he said. "Canadians will see improvements in their infrastructure."

Wednesday's announcement with the NWT divided $571-million in federal spending over10 years. The largest amount – $328-million – will go toward rural and northern infrastructure, including food security, improving access to broadband internet service and improved education and health facilities for Indigenous peoples. The deal also provides $208-million for green infrastructure – including renewable energy and climate change adaptation projects; $26-million for community culture and recreation infrastructure and $8-million for public transit.

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