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A TTC bus stops to drop off and pick up passengers on Bay St. in Toronto's Financial District on March 12, 2020.Fred Lum/the Globe and Mail

The federal government is ramping up plans to move Canada’s public transit fleets from diesel to electric buses with a dedicated $2.7-billion fund.

In an interview with The Globe and Mail, federal Infrastructure Minister Catherine McKenna said the money, which will be announced Thursday, is in addition to the $1.5-billion funding for electric buses that was announced earlier this year by the Canada Infrastructure Bank.

She said the goal is for the bank and the new fund to work together so that cities have a range of options, including low-interest loans from the bank and direct government grants, to buy new electric buses and build the charging infrastructure that’s needed for them to operate.

“We need to reduce emissions in our transportation sector because it represents 25 per cent of our emissions and we’ve committed to net zero by 2050. So we need to tackle the transportation sector so that we can tackle climate change,” she said. “But on the flip side, this is really an economic and jobs story for Canada. Because when we make these announcements, the companies that are the ones that are producing the buses are often Canadian.”

The $2.7-billion fund for electric bus infrastructure will come from a plan to spend $5.9-billion over five years on transit-related projects. That fund was announced in February, along with an announcement to create a dedicated public-transit transfer to municipalities worth $3-billion a year, starting in 2026.

The February funding announcement was praised by the Federation of Canadian Municipalities, as mayors pitch urban infrastructure as a priority for government stimulus programs as Canada emerges from the COVID-19 pandemic.

Canada is home to several companies that manufacture zero-emission buses, including Nova Bus Inc. in Saint Eustache, Que.; Lion Electric Co. in Saint-Jérôme, Que.; NFI Group Inc. in Winnipeg; and GreenPower Motor Co. Inc. in Vancouver.

Ms. McKenna said Canadian cities will not be required to buy Canadian-made buses, but recent history indicates they are already buying from Canadian firms.

“The procurements are done by the municipalities. But in Quebec, they are very focused on Quebec manufacturers,” she said. “But the municipalities, they go out to tender, and they are finding that they are coming up with the Canadian manufacturers as the ones [with] the appropriate technology for them.”

The Canada Infrastructure Bank was created by the Liberal government and has an approved budget of $35-billion over 10 years. The bank has faced criticism for only allocating a small fraction of its budget to projects to date. It recently underwent an overhaul of its senior leadership.

Vancouver Airport Authority chief executive officer Tamara Vrooman was named in January as the new chair of the bank. A new CEO, Ehren Cory, was announced in October.

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