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Commuters board a TTC subway at Kennedy Station in Scarborough.

Kevin Van Paassen/The Globe and Mail

The national body representing Canada's cities and towns says it has been caught off guard by new infrastructure rules announced on Thursday that land just weeks before the multibillion-dollar Building Canada Fund is set to launch.

On a visit to Gormley, Ont., north of Toronto, Prime Minister Harper provided the first details of a $14-billion, 10-year fund that was part of last year's budget and will take effect on April 1.

Debate over how to divide those billions will heat up later this month. Toronto Mayor Rob Ford said he will be "leading the charge" to ask for more money for subways and housing when he attends a big city mayors conference in Ottawa.

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"We're the largest city in Canada, and I think we deserve a lion's share of the money because we have unique needs that other cities don't," Mr. Ford told reporters in Toronto.

Calgary mayor Naheed Nenshi – who is also looking for federal money for public transit, agreed larger cities have much higher congestion and rail costs.

"He's got a point – that looking at the large cities has to be done separately than looking at the needs of all municipalities," Mr. Nenshi told reporters in Calgary later.

The Federation of Canadian Municipalities welcomed the cash, but is concerned to learn that local roads will not qualify for the new fund, an important policy change from previous programs. Municipalities will also be prevented from using federal gas tax money as part of their one-third contribution for big projects, a practice that was sometimes allowed in the past.

They also learned that any project worth more than $100-million must be approved by a Crown corporation called P3 Canada, which will make binding decisions on whether the infrastructure must be a public-private partnership.

"We want to make sure that it won't create delay for nothing," said Claude Dauphin, president of the FCM and mayor of Lachine, Que. With Tuesday's budget projecting more than $30-billion in surpluses between next year and 2018-19, Mr. Dauphin said municipalities will also be asking Ottawa to increase the size of the fund.

"The infrastructure deficit is so high in this country, so we'll plead to have more money," he said.

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Although the program does not launch until April, Mr. Harper has already promised $660-million of the fund to extend the subway line in the Toronto suburb of Scarborough. He declined to say on Thursday what else might get support.

"It would be premature for us to put forward a list of our preferred projects, but those discussions will take place," he said before touring the Toronto-York-Spadina subway extension.

Mr. Nenshi said the criteria announced on Thursday were developed without talks with municipalities and feel "rushed."

His concerns include the exclusion of sports, cultural and recreation facilities from the fund, the fact that private sector companies are eligible for money, the time and costs of the P3 Canada Fund screening, and shifting the gas tax revenue to the federal contribution.

"A lot of these things I think, frankly, the federal government just hasn't thought through in detail," he said.

Ottawa will fund up to one-third of most infrastructure projects under the new rules, with some exceptions. It will pay 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.

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A $4-billion national infrastructure component will not be allocated to provinces and territories but will be determined on merit, guided by federal priorities, according to the new rules.

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.

Brampton mayor Susan Fennell, who was at the Prime Minister's announcement, celebrated the news of the fund.

"We've asked for long-term, predictable funding…this is the first time we've had a 10-year predictable plan," she said.

The $14-billion Building Canada Fund is 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.

The opposition NDP and Liberals have argued the new fund is not an annual increase from previous spending. Both parties are calling for Ottawa to spend considerably more on infrastructure.

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Quebec's Minister of Intergovernmental Affairs, Alexandre Cloutier, expressed fear that Ottawa will approve projects individually.

"It would have so much more simple to negotiate with Quebec. Instead they chose to act unilaterally," he said.

With files from Rhéal Séguin in Quebec City, Dakshana Bascaramurty and Bruce Laregina in Toronto and Kelly Cryderman in Calgary

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