Federal Budget Slows Down Infrastructure Allocation

OGCA, through the CDAO, participated on a conference call with officials from Infrastructure Minister Sohi’s office and received the following briefing:

The new cost-sharing arrangements will allow for the Federal government to allocate a percentage of project costs. It will be up to 40% for municipalities, 50% for Provinces, 75% for territories and 50% for transportation projects.

Allocation must be made through one of 5 streams which are: public transportation, green infrastructure, rural and northern infrastructure, trade and transportation, and social infrastructure.

The government will initiate discussions with the provinces this spring and they expect it will take most of the year to conclude and sign cost-sharing arrangements. It is anticipated that funds will begin flowing in the 2018/19 fiscal year.

Legislation is expected within weeks to establish an Infrastructure bank that will be capitalized at about $15 billion and will make funding available for private investment in infrastructure.

The Minister’s office indicated that they are following Ontario’s Community Benefits approach on major programs and will consider similar requirements on federal projects. The CDAO has written the Province with our objections and recommendations and have now been asked by the federal minister’s office to provide our insights.

The Phase I infrastructure program that was launched in last year’s budget was designed to deliver a short term stimulus package to pay for aging infrastructure improvements, and included negotiating an "outcomes based approach" with the provinces. A Report issued by the Parliamentary budget watchdog says that the $13.6 billion in infrastructure announced last year and to be spent by March of 2018, has only allocated $4.6 billion in projects. Clearly the spending will fall far short of original projections.

We expect that Ontario will issue its budget in the second or third week of April and that it will fund the commitments of its ten year Infrastructure plan that will require a commitment of approximately $13 billion in the new fiscal year. It is anticipated that the allocation will focus on transportation and mass transit priorities.