Budget 2007 makes a historic investment of more than $16 billion over seven years in infrastructure—bringing federal support under a new long-term plan for infrastructure to a total of $33 billion, including the funding provided in Budget 2006. This historic investment will be dedicated to things that matter such as roads and highways, public transit, bridges, sewer and water systems, and green energy. The plan provides greater predictability, flexibility and accountability, and makes an important contribution towards the economy, the environment and our energy needs. Initiatives in Budget 2007 to create an Infrastructure Advantage include:
Canada needs modern, world-class infrastructure to make our country a world leader for today and future generations, and to create a cleaner Canada through new public transit and wastewater management.
Modern, accessible infrastructure matters to Canadians. It helps move people and goods to markets, allowing our economy to grow and prosper. Through public transit and water treatment systems, infrastructure investments will mean a cleaner, greener Canada. Investing in infrastructure:
Over the past two years, the federal government has made significant commitments to build and modernize Canada’s infrastructure. As part of restoring fiscal balance, infrastructure was identified as one of the joint priorities of federal and provincial-territorial governments. Early action was taken in Budget 2006 as federal infrastructure support for provinces, territories and municipalities was increased to an unprecedented level of $5 billion per year by 2009–10, a level eight times greater than those recorded during the 1994–95 to 2004–05 period.
Infrastructure support must reflect the long life cycle of infrastructure projects. The latter should be managed as strategic assets for which continuous planning and long-term, predictable funding are required. Following the tabling of Budget 2006, the Minister of Transport, Infrastructure and Communities consulted with provinces, territories and municipalities to seek their views on how to improve federal infrastructure programs.
Budget 2007 delivers on the commitment made in Advantage Canada by implementing a comprehensive plan for infrastructure based on the advice received during the recent consultations with provinces, territories and municipalities on the federal role in infrastructure. The plan provides greater predictability, flexibility and accountability, and makes an important contribution towards the efforts of Canada’s New Government in the areas of the economy, the environment and our energy needs.
A key element of the plan is base funding, which will consist of the Gas Tax Fund, and the increase from 57.1 per cent to 100 per cent in the rebate that municipalities receive on the goods and services tax (GST) they pay. This base funding will be significant, stable, predictable and long-term in nature, and thus will directly benefit municipalities. Budget 2007 includes $8 billion to extend the Gas Tax Fund at $2 billion per year for another four years (2010–11 to 2013–14).
Budget 2007 also provides a total of $6 billion in funding for four other key elements of the plan:
In addition, Budget 2007 provides each province and territory an additional $25 million per year to support investments in national priorities throughout the country, such as trade-related infrastructure like gateways, roads, highways and other transportation facilities. This represents an expenditure of $2.275 billion over seven years. All provinces and territories will participate in building this modern transportation network in Canada, including smaller jurisdictions, which generally have limited basic infrastructure and lower population densities.
In total, Budget 2007 delivers more than $16 billion to infrastructure. Including the infrastructure funding provided in Budget 2006, federal support under the plan will total $33 billion over the next seven years (2007–08 to 2013–14), that is about $1,000 for every Canadian:
|2007– 2008||2008– 2009||2009– 2010||2010– 2011||2011– 2012||2012– 2013||2013– 2014||Total|
|Gas tax funding||800||1,000||2,000||2,000||2,000||2,000||2,000||11,800|
|Fund for gateways|
|Fund for P3 projects||82||132||169||200||204||234||236||1,257|
|Note: Budget 2006 provides $6.6 billion over seven years (2007–08 to 2013–14) for national infrastructure programs: $4.6 billion has been allocated to the Building Canada Fund, $1.1 billion to the national fund for gateways and border crossings, $658 million to the national fund for P3 projects, and $215 million to the Asia-Pacific Gateway and Corridor Initiative.
1 Totals $1 billion, including $24 million in initial funding in 2006–07.
2 Includes the Infrastructure Canada Program, the Canada Strategic Infrastructure Fund, the Border Infrastructure Fund, the Municipal Rural Infrastructure Fund and the Public Transit Capital Trust.
This funding is in addition to approximately $4 billion still to be provided under sunsetting infrastructure initiatives. On an annual basis, total federal support for provincial, territorial and municipal infrastructure will continue to grow over the next seven years, from $4.3 billion in 2007–08 to $5.7 billion by 2013–14, the largest such investment in Canada’s history.
The plan, combined with other measures in Budget 2007, fulfills the commitments of Canada’s New Government to restore fiscal balance.
Saint John Harbour clean-up: The Government is contributing $26.6 million to complete the Saint John Harbour clean-up, a priority undertaking for Canada’s New Government. This project will provide long-term environmental benefits for the City of Saint John by removing sewage discharges and improving water quality in the harbour and neighbouring waterways.
Autoroute 30 near Montréal: The completion of Autoroute 30 will provide a much-needed bypass around the Island of Montréal. The Government of Quebec has the lead responsibility for implementing this public-private partnership. The Government of Canada is working with the Province of Quebec to complete the western section of this highway.
FLOW: Up to $962 million in funding has been set aside to help fund five transit projects in the Greater Toronto Area (GTA), including bus rapid transit systems in Mississauga, Brampton and York Region, an extension of the Spadina subway line and a transit study in Durham Region. Along with three highway projects being undertaken by the Government of Ontario, this will help reduce traffic congestion in the GTA and improve air quality.
Red River Floodway: As a result of a recent federal commitment of $170.5 million, Manitoba will be able to complete the expansion of the Red River Floodway and thus significantly enhance the level of flood protection enjoyed by the residents of the City of Winnipeg.
Asia-Pacific Gateway and Corridor Initiative: Using funding announced in Budget 2006, investments are being made in a number of infrastructure projects, including $100 million for the Deltaport Connector of the South Fraser Perimeter Road and $90 million for the Pitt River Bridge and Mary Hill Interchange.
Canada aspires to be a leader in public-private partnerships. Substantial investment is required in our country’s infrastructure to achieve growth in our productivity and standard of living. Public-private partnerships can be beneficial in building infrastructure projects faster and at a lower cost to taxpayers. Private capital and expertise can make a significant contribution. For example, pension fund managers have said that they are seeking to invest in infrastructure opportunities in Canada. The private sector is also better placed to manage many of the risks associated with the construction, financing and operation of infrastructure projects. The United Kingdom and Australia are often held up as world leaders in promoting and engaging public-private partnerships. In the United Kingdom, experience suggests that public-private partnerships can provide greater cost certainty and result in a more timely delivery of infrastructure. Australia, a country of almost 20.8 million people, enjoys one of the most developed P3 markets worldwide, in 2005 worth an estimated $20 billion in prospective and ongoing projects. Canada has an opportunity to take advantage of this tool on behalf of Canadians.
The national fund for public-private partnerships, which is a key part of the long-term plan for infrastructure, will encourage the development of the P3 market in Canada. In the case of large projects seeking funding from the Building Canada Fund and the national fund for gateways and border crossings, proponents will also be required to demonstrate that the option of undertaking the project as a public-private partnership has been fully considered.
Budget 2007 provides $25 million over the next five years for a new federal office that will help execute public-private partnership projects. The office’s mandate will have two main objectives:
The Minister of Finance and the Minister of Transport, Infrastructure and Communities will work in collaboration to set up and manage the office.
The Windsor-Detroit Corridor is our most important artery of trade, accounting for 28 per cent of Canada-U.S. merchandise trade. Many regions in Canada depend on the efficient movement of goods and people through this corridor. This includes not only Ontario, but also Quebec (in 2004, an estimated $5.7 billion of Quebec’s merchandise exports to the U.S. transited through this corridor). Both long-term planning studies and stakeholders have confirmed the need for a new crossing. Canada’s New Government recognizes that ensuring sufficient border capacity between Windsor and Detroit is an issue of national importance.
A binational planning process, already well advanced, will recommend a location for the new crossing by mid-2007. The International Bridges and Tunnels Act, which recently received Royal Assent, establishes a legislative framework to protect the national interest for safety, security, and the efficient movement of goods and people, and to promote competition. This law will apply to the new crossing for the Windsor-Detroit Corridor.
As promised in Advantage Canada, Budget 2007 sets out a financing strategy for a new crossing at Windsor-Detroit:
Budget 2007 provides $10 million over three years to Transport Canada to help support its legal, financial and technical work to implement this important project.Table 5.4
|Federal P3 office||5||5||10|
|Windsor border team||5||3||8|