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Politics Mayors struggling to understand Ottawa’s subway gift to Toronto

Prime Minister Stephen Harper, centre, watches as Finance Minister Jim Flaherty, left, and Toronto Mayor Rob Ford shake hands during the announcement for federal funding support for a new Toronto subway system on Sept. 22, 2013.

JON BLACKER/REUTERS

Ottawa's $660-million gift to Toronto for a subway extension will come from a program that does not yet exist, leaving Canada's other cities confused as to how they can get in on the action.

Mayors and municipal officials scrambled this week to understand the broader implications of Finance Minister Jim Flaherty's surprise announcement on Monday that Ottawa would help finance a subway extension in the Toronto suburb of Scarborough.

"I'm pleased that Toronto was successful in getting funds, but it leaves me scratching my head: What is the process that we have to follow in order to be as successful?" Ottawa Mayor Jim Watson said in an interview. "My one concern is that all municipalities be treated the same way, and fairly."

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Mr. Watson said his city's priorities for federal cash are expanded light rail and better treatment of the waste water that flows into the Ottawa River.

Mr. Flaherty's March, 2013, budget promised a program called the Building Canada Fund that would be worth $14-billion over 10 years, starting next year. Federal officials confirmed to The Globe and Mail this week that the promised $660-million will come from there.

The fund is the responsibility of Infrastructure Minister Denis Lebel. However, his department has not yet announced the program's criteria, which need to be negotiated with the provinces.

Mr. Flaherty – a personal friend of Toronto Mayor Rob Ford – was asked Monday why he was making the subway announcement now.

"Because the mayor wrote to us and asked," he replied.

But it is not that simple.

"Provinces, territories and municipalities have to wait until the launch to apply," said Marie-Josée Paquette, a spokeswoman for Mr. Lebel. She added that the federal government's pledge to Toronto will depend on whether the proposal meets the program's rules.

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The $14-billion Building Canada Fund is part of a larger $47-billion Building Canada Plan, which includes $21.8-billion in transfers to municipalities from the federal gas tax, $10.4-billion in goods and services tax rebates for municipalities and $1.25-billion for public-private partnerships.

The timing of the Toronto announcement also raises questions about whether the Conservative government plans to use the two years before the next election to announce most of the available federal infrastructure cash through to 2024.

The Federation of Canadian Municipalities had wanted the new plan in place for the 2014 construction season and would likely welcome early spending decisions from Ottawa.

Vancouver Mayor Gregor Robertson – who wants federal money for a subway on the city's Broadway corridor – said the financing should be allotted quickly once the rules are worked out.

"Given the scale of the infrastructure deficit, the sooner the better for allocation of dollars through a rigorous process," he said. "It was good to see the 10-year, $14-billion commitment, but it doesn't match cities' requests to catch up on flagging infrastructure. We'd like to see the dollars move swiftly so we get projects under way, and as economic fortunes improve, hopefully, the fund can be increased in years to come."

Infrastructure announcements are almost always good politics. But New Democrat Olivia Chow, who as a Toronto MP supports the subway announcement, said the process invites criticism from other mayors.

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"There's not a lot left for everybody else. I'm very concerned that funds are being given without a clear criteria," she said. "This government could easily be accused of playing politics with taxpayers' money. And that's the last thing we need – for other municipalities being angry at Toronto – because already there are enough bad jokes about Toronto hogging all the funds, which is not necessarily true."

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