The State of Canada's Cities and Communities 2012 - FCM

Chapter 3
Page 9
The 2005 federal budget delivered the New
Deal by providing municipalities with more than
$9 billion in funding over five years. This included
$5 billion in gas-tax revenues, renewing existing
infrastructure programs “as necessary,” and
more than doubling the Green Municipal Fund’s
endowment with an infusion of $300 million.
The 2005 budget also proposed creating a new
Infrastructure and Communities department to
be the Government of Canada’s primary contact
for municipal issues, and promised continuing
pre-budget consultations between the Minister
of Finance and municipal representatives.
5.
CANADA’S NEW GOVERNMENT:
BUILDING CANADA
“The health of our societies is driven by the
health of our cities. And the challenge for
policymakers like us is to keep our cities healthy
and strong.”—Stephen Harper, World Urban
Forum, 2006
The 2006 federal election changed the game
for FCM and its members, but not their goals.
With the arrival of Stephen Harper’s minority
Conservative government, some feared municipal
progress might stall, although the Conservative
Party had expressed its support for “efforts
to eliminate the infrastructure deficit, develop a
long-term plan for the gas-tax transfer, maintain
infrastructure funding, and include municipalities
in discussions of issues related to their jurisdiction
and concerns.”
The party also pledged to tackle the fiscal
imbalance and, in a letter to FCM, to “immediately
upon being elected…begin consultations with
the provinces and municipal representatives with
the intention to reach a long-term, comprehensive
agreement, addressing both the vertical and
horizontal fiscal imbalance.”
The new government’s first budget delivered on
infrastructure, with $5.5 billion over four years
for a new Highways and Border Infrastructure
Fund, Canada’s Pacific Gateway Initiative, the
Canada Strategic Infrastructure Fund, the Municipal
Rural Infrastructure Fund, and a Public Transit
Capital Trust. Although much needed, these
investments did not fully respond to municipal
needs. The sector adapted to the new political
environment and, in Budget 2007, got results.
The 2007 federal budget launched the Building
Canada Plan: a seven-year plan providing
$33 billion in “stable, flexible and predictable
funding to provinces, territories and municipalities,
allowing them to plan for the longer-term
and address their ongoing infrastructure needs.”
This $33 billion included the existing municipal
GST refund, worth $5.8 billion, and the Gas
Tax Fund, worth $11.8 billion.
This plan provided funding to municipalities for
priorities such as transit, water and wastewater
infrastructure, as well as the rehabilitation of
local roads. Budget 2008 delivered more good
news by making the gas-tax transfer permanent,
responding to a key FCM position that municipalities
should be able to rely on the Gas Tax Fund
when planning and financing their long-term
infrastructure needs. The budget also set aside up
to $500 million for capital investments to improve
public transit, a key municipal priority.
6.
SHOULDER TO SHOULDER:
GOVERNMENTS PARTNER TO
FIGHT GLOBAL RECESSION
“The doubters and critics said municipalities
wouldn’t have the shovel-ready projects…that
municipalities couldn’t move that fast. They said
they wouldn’t—and couldn’t—bring money to
the table. Well, we knew that the big cities and
small towns were up to the challenge—and you
have proven us right.”—John Baird, Minister of
Transport, Infrastructure and Communities,
FCM Annual Conference, 2009
Just as the outlook began to brighten for
municipalities, 2009 brought a new and bigger
storm. In the face of a potential global financial
meltdown and a recession in the United States,
world governments turned to stimulus spending
to offset the slowdown and create jobs.
In Canada, FCM and its member municipalities
were quick to volunteer their “shovel-ready”
municipal infrastructure projects, leading to the
largest-ever federal investment in municipal
infrastructure in Budget 2009.