WHEREAS the Building Canada Plan and a number of important federal-provincial transfer agreements vital to Canada’s municipalities, will expire in March 2014; and

WHEREAS federal investments over the last few years have helped to slow the infrastructure decline of our cities and communities, and the Government of Canada has committed to develop a new long-term plan for municipal infrastructure funding in consultation with municipal and provincial/territorial governments; and

WHEREAS a seamless transition from the Building Canada Plan to a new long term plan is necessary to ensure that municipalities can continue planning their capital spending effectively; and

WHEREAS the Federation of Canadian Municipalities (FCM) has launched a campaign to ensure the new plan reflects municipal priorities across the country and asks its member municipalities to pass a Council resolution supporting the campaign; and

WHEREAS the Alberta Association of Municipal Districts and Counties (AAMDC) has been a strong advocate for long-term, sustainable funding to meet the infrastructure need of rural municipalities;

THEREFORE BE IT RESOLVED that the AAMDC endorses the FCM campaign and urges the Minister of Transport, Infrastructure and Communities to work with FCM to ensure the new long-term infrastructure plan meets the core infrastructure needs of municipalities and is fully in place when existing programs expire in 2014.

Federal infrastructure funding agreements have been in place since 2007 and have involved a total budget of $33 billion. Programs within this funding include the Building Canada Fund that has provided $8.8 billion in provincial and municipal funding and the Gas Tax Fund will provide $11.8 billion directly to municipalities.

Municipalities continue to need long-term, sustainable funding options supported by other levels of government. Federal infrastructure funding is critical to alleviating the growing pressures in municipal infrastructure deficits. Restoring Municipal Fiscal Balance, a 2006 report issued by FCM, notes that municipalities only receive 8 cents on every tax dollar collected in Canada. This demonstrates the challenge municipalities face as they balance limitations in tax revenue with ever-increasing operational and capital expenses.

In July 2012, the Minister of State for Transport, Steven Fletcher, hosted a roundtable consultation with representatives from industry and government to share their ideas on what a new funding framework should offer. The AAMDC presented the following four asks and while they were developed for this consultation, they would apply to municipal funding models from all levels of government.

1.     Funding should be delivered on a non-competitive free-flow basis that supports certainty and predictability for financial planning. Proper financial planning requires a long term focus; however, the current reality is that municipalities are dependent on transfers from federal and provincial government. These transfers are rarely certain nor predictable. This presents significant challenges for municipalities to prepare long term financial plans that will enable them to properly maintain and replace infrastructure such as roads, bridges, buildings and water and wastewater systems.

2.     Funding should be long term with a commitment of at least a 10 year funding cycle. A long term commitment to funding levels allows municipalities to properly prepare for their financial future knowing exactly when and what levels of funding will be received.

3.     Funding should be indexed to protect the present value of the funding. Without an indexation of funding agreements, the long term value of the funding will be eroded due to inflation. For instance, the federal government’s 2007 commitment to provide $2 billion per year through the Federal Gas Tax Fund for the four years of 2010 to 2013 amounted to $199.5 million each year for Alberta. However, when applying Alberta’s consumer price index, the value of that $199.5 million has reduced by 10% to only $179 million by 2013. In fact, that original $798 million commitment will only provide $741 million in value over the length of the four year term.

4.     Funding should be flexible to support local infrastructure needs. Local government is the government closest to the people and as such, municipalities are best positioned to know what citizens want and how to provide it. A flexible federal infrastructure plan will ensure each municipality can respond to local needs efficiently. Over 175 municipalities and municipal associations across Canada have passed similar resolutions in support of this initiative.

The AAMDC has no active resolutions directly related to this issue.

Infrastructure:

In the summer and fall of 2012, Alberta Infrastructure participated in cross-ministry discussions with Treasury Board and Finance, Municipal Affairs, Alberta Transportation and other ministries in an effort to provide feedback to the Federal Government on its Long-Term Infrastructure Plan (LTIP).  This effort was led by the Ministry of Treasury Board and Finance on behalf of the Government of Alberta (GoA) and included the following underlying principles:

•Equitable funding;

•Stable and predictable funding;

•Provincial control over the administration of funds; and

•Reduced administrative footprint.

Based on the cross-ministry review of the LTIP in the summer and fall of 2012, it is the GoA’s position that any agreements between Canada and Alberta concerning the LTIP be bilateral in nature.  Due to the significant funding to municipalities, the allocation of any funding between the province and the municipalities, agencies or non-profit organizations must be determined by the province with input from the municipalities.  This funding would supplement the substantial capital commitment that Alberta already makes to its municipalities through various programs such as: 

•Municipal Sustainability Initiative;

•GreenTRIP Fund; and

•Municipal transportation and water infrastructure grants.

The GoA also recognizes that the Federal Government’s Gas Tax Fund has had a positive impact in funding municipal projects in Alberta.  The current provincial treatment of the Gas Tax Fund would not change, and the fund would continue to be a flow-through to the municipalities.

Municipal Affairs:

As the Government of Alberta lead on negotiations with the federal government, Treasury Board and Finance is the appropriate ministry to contact regarding this resolution.

Within the province, the Government of Alberta recognizes the infrastructure needs of municipalities, and contributes substantially to this end by delivering the Municipal Sustainability Initiative (MSI).  Since 2007, Alberta’s municipalities have been allocated $3.9 billion in MSI funding and the government remains committed to providing the full $11.3 billion in funding over the life of the MSI.

Under the MSI program, municipalities determine projects and activities to be funded by the MSI based on local priorities, within the general qualification criteria set out in the program guidelines.  MSI funds may be combined with, or used to fund, the municipal contribution required under federal-municipal grant programs, unless doing so is prohibited by that program.

Transportation:

As the Government of Alberta lead on negotiations with the federal government, Treasury Board and Finance is the appropriate ministry to contact regarding this resolution.

In the 2013 federal budget, the government announced plans for new infrastructure funding such as permanently implementing the Gas Tax Fund with the introduction of a 2% annual indexation. The AAMDC understands that Transport Canada did consult with FCM on its new long-term infrastructure plan but the government has not supported all of FCM’s requests.

Additionally, in February 2014, the Government of Canada released some information on the new Building Canada Fund (BCF). It included $10 billion over 10 years in a Provincial/Territorial Component, $1 billion of which will form a Communities Component reserved for municipalities with populations of less than 100,000. Despite this progress, there are several details that have still not been made available, including how municipalities can apply for BCF funding, and whether local road improvements will be eligible for funding under the new eligibility categories.

The Government of Canada proclaimed the new BCF to be “open for business” on March 28, 2014 and directed Alberta municipalities to contact Alberta Infrastructure for application details. Alberta Infrastructure indicated that they were surprised by this announcement, as no progress had been made with the federal government in setting eligibility criteria or application processes. Further, Alberta Infrastructure indicated that it would be unlikely that the Provincial/Territorial Component of the new BCF would be ready in time for the 2014 construction season.

Although the Gas Tax Fund is expected to be made available to municipalities in late 2014, and the Small Communities Fund of the BCF will be made available to municipalities in early 2015, the loss of funding for the 2014 construction season makes the government response to this resolution Unsatisfactory.