News
New Building Canada Fund is Flawed, Municipalities say
March 11, 2014
The Federation of Canadian Municipalities (FCM) is seriously concerned about the design of and gaps in the New Building Canada Fund announced in the recent federal budget. 
"As this is the longest and largest infrastructure program in Canadian history, it is critical that these gaps be addressed so that the program can meet the needs of communities over the next decade and give Canadians the best value for money." says FCM President Claude Dauphin, speaking on behalf of the Board of Directors. "These gaps could have been addressed through more meaningful consultation with municipalities, and it is unfortunate that they remain a problem," Dauphin explains. "We must work together to fix what we can now. We must also work to prevent similar flaws from emerging in the future by improving the quality of federal consultations with local governments." In 2012-2013, effective consultation with municipalities led to ground-breaking federal infrastructure investments, including a commitment to a new 10-year, $14 billion Building Canada Fund (BCF), a 2 % annual index of the federal gas tax transfer, and a pledge to work with FCM on the detailed design and rollout of the plan. "Due to the lack of meaningful program design consultations that followed, however, there was inadequate study and discussion of the issues, leaving important concerns with the New Building Canada Fund unaddressed and important questions unanswered," notes Dauphin. Municipalities own the vast majority of Canada's roads, water systems, public transit and other core infrastructure, but to date they have received no clear indication that a fair share of the new BCF will be invested in municipal projects, according to an FCM statement. "The new BCF's funding rules further reduce local flexibility by eliminating core infrastructure categories from eligibility such as local roads," says Dauphin The new BCF also introduced new requirements that could result in unnecessary red tape and cost property taxpayers more money, including a cumbersome "P3 screen" and rules that could force local governments to carry a higher share of project costs, says FCM. "These challenges are not insurmountable - all they require is the will to work together to find practical solutions," says Dauphin. "The first and most important step is for federal, provincial and territorial governments to ensure that at least 70 % of the BCF is invested in our cities and communities, ensuring local governments receive a fair and predictable share of this important new program. "It's not too late to work together to address these issues, and it is our joint responsibility to do so. Canadians count on all governments to make informed decisions to serve their communities and get the most out of every tax dollar." Download a copy of the complete press release HERE