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February 27, 2014

No Surprises in a ‘Stay the Course’ Budget

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No one was expecting any surprises in this year’s Budget Speech as Federal Finance Minister Jim Flaherty released the 2014 Budget on February 11. Titled "The Road to Balance – Creating Jobs and Opportunities", the title says it all — the federal government is on track with its mission to reach a balanced budget (surplus) by 2015. So while there was very little news in this year’s budget, we can start to look forward to next year’s budget and the potential for new programs and the lifting of the freeze over all federal departments. 

First and foremost, the government reaffirmed all the commitments they made to infrastructure funding in the 2013 Budget.  The have confirmed more than $53 billion over the next 10 years, including almost $22 billion through the Gas Tax Fund and $14 billion through a renewed Building Canada Fund. The Finance Minister committed to working with the Federation of Canadian Municipalities (FCM) and others toward a launch of the Building Canada Fund on March 31, 2014. No specific support was identified to assist with the costs of the new Wastewater Systems Effluent Regulations (WSER). Our challenge now is to ensure that municipal leaders identify water and wastewater projects as a priority in their communities and apply to use those funds for critical water and wastewater infrastructure renewal.  

The federal government is still placing a lot of emphasis on the potential for P3 funding and reaffirmed $1.25 billion to PPP Canada over the next five years. Any project valued over $100 million will be directed for a P3 review. Specific water projects were noted including the $58.8 million Regina wastewater plant, the $57.3 million Saint John water plant and the $22.9 million Hamilton biosolids project. While CWWA has voiced concerns that the P3 model does not work for many of us, it seems the federal government has been listening. In the budget document they state they will, "undertake additional efforts to provide smaller communities with information, guidance and tools to support P3s and promote the bundling of projects."

CWWA had also been calling for the federal government to demand proper asset management as a prerequisite to funding, but they have directed efforts to promote proper planning. "The Government is providing increased support to help municipalities pursue long-term planning, including asset management plans, through the Gas Tax Fund," and they refer to the maintenance and rehabilitation costs over the project’s full life cycle. So asset management plans would be eligible under the Gas Tax Fund. 

On other programs: $323.4 million was committed over two years to the First Nations Water and Wastewater Action Plan; $305 million is committed to expanding broadband internet access that could assist our rural and more remote members; and $200 million was committed over five years through Public Safety Canada toward the National Disaster Mitigation Program. 

Meanwhile, the spending freeze continues over all federal departments and agencies, which in reality translates to reductions. So we cannot expect too much in the way of new funding initiatives or financial support for our sector from our federal colleagues ... but we’ll still try!

A lot of the federal announcements were on job creation efforts with a commitment to moving ahead with the Job Action Plan.  Many are excited about the support for Apprenticeships offering interest-free student loans. This may benefit some of our private-sector members, but will not benefit our municipal sector until water and wastewater trades skills are identified as a ‘red tag’ trade.

So for CWWA, the challenges are:

• To get water/wastewater projects identified as local priorities
• To work with the Federal Government, PPP Canada, FCM and other partners in developing and promoting funding models and asset management programs for smaller communities
• To work with FCM and other partners to identify priorities for the 2015 Budget



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