New infrastructure fund includes $1B for small communities

Smaller communities across the country will now have access to the same predictable funds that large urban centres have enjoyed in the past, Prime Minister Stephen Harper said in Gormley, Ont., today as he unveiled the details of a much anticipated 10-year infrastructure plan.

"Provinces, territories, and municipalities will now have unprecedented access to predictable, sustainable, federal, infrastructure funds for a decade," Harper said.

Starting March 31, Canada's cities and provinces will be able to apply for federal funding under the New Building Canada Fund. 

• Read the details of the New Building Canada Fund
• BUDGET 2014 : Budget money for parks and bridges, but cities have to wait

The new infrastructure fund which the federal government announced in the 2013 federal budget includes two major components: $4 billion for projects of national importance and $10 billion for provincial and territorial infrastructure projects.

Under the $4 billion component, funding will not be allocated to provinces and territories but "will be determined by project merit, guided by federal priorities."

The $10 billion fund will see $9 billion of that directed to national and regional projects, and $1 billion set aside exclusively for projects in small communities with under 100,000 residents.

Under the $10 billion component, the provinces and territories "will receive a base amount of $250 million plus a per capita allocation" over 10 years.

Public-private partnerships

Harper said the government is also renewing funding to the public-private partnerships fund but making some "positive" changes as well.

Commonly known as P3s, Harper said this model is "an excellent additional tool to allow taxpayers to share risk and thus help get projects completed on time and on budget."

"We need to see more private sector innovation and we need to see it better utilized in developing modern infrastructure," Harper said.

P3 projects over $100 million will have to undergo a screening to ensure taxpayers get their money's worth but the additional step could take between six and 18 months. 

We don't want to wait six to 18 months to do paperwork.- Jim Watson, Ottawa city mayor

The Federation of Canadian Municipalities, a group that represents more than 2,000 communities across the country, welcomed today's announcement but also expressed some concerns.

"The dedicated Small Communities Fund recognizes that small, rural, remote and northern communities need greater predictability and access to infrastructure funding," Claude Dauphin​, president of the FCM said in a written statement.

"We are also concerned by rule changes that could force municipalities to carry a larger share of infrastructure costs in the future, the eligibility rules for local roads, the screening process for projects structured as public/private partnerships," Dauphin said.

$65M to clean up the Ottawa River

Ottawa Mayor Jim Watson has said the city's priority is a $355-million project to reduce raw sewage dumped in the Ottawa River which runs along the nation's capital past Parliament Hill and the prime minister's residence at 24 Sussex.

Under the New Building Canada Fund, the federal government would contribute up to one-third of the total eligible costs for projects located in the provinces.

That means Watson will be seeking approval for $65 million in federal funding for the Ottawa River Action plan.

In an interview with CBC Radio's All In a Day, Watson told Alan Neal on Thursday he welcomed the new money but it's clearly not enough for a 10-year period.

"It's not a lot of money by the time it trickles down to the municipalities… As time goes, I suspect you'll see additional dollars put into the [federal] budget because I don't think it will satisfy the municipalities that have significant infrastructure deficits," Watson said.

The Ottawa mayor also had some concerns about the rule changes surrounding the public-private partnerships.

"We don't want to wait six to 18 months to do paperwork. We want to get shovels in the ground, get the pollutants stopped from going into the river and have the project wrapped up for 2017, which is Canada 150th birthday," Watson said.

The new $14 billion fund was first announced in last year's budget but cities have been waiting for over a year to find out if they qualify for the federal funds, which will start flowing on March 31.

Canada's mayors have complained about the delay, saying it could result in them losing out on thousands of jobs that come with the construction season.

Municipalities need the money to fix crumbling bridges, roads and wastewater systems.