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How Budget 2008 Affects Engineers

Good news: Gas Tax Fund for infrastructure made permanent
Bad news: Little new money for infrastructure

The Honourable James Flaherty, Minister of Finance

Gas Tax Fund permanent: By making the Gas Tax Fund for infrastructure permanent, the Minister of Finance, James Flaherty, brings good news to municipalities even though there is relatively little new money in the short term for infrastructure. A permanent Gas Tax Fund will allow municipalities to better plan and finance their long-term infrastructure needs. Is it estimated that the Gas Tax Fund will, at 5 cents a gallon, generate $2 billion in 2009-10. The Federation of Canadian Municipalities is pleased with this budget provision, but it would like the amount to be adjusted annually to meet inflation.

New $$ for transit: The only significant new infrastructure money is $500 million for further investments in public transit. This new money is for the current fiscal year only and will be made available for projects for which provincial governments are prepared to make a firm commitment prior to the end of March 2008. The Canadian Urban Transit Association (CUTA) would have preferred predictable and permanent funding for transit and is disappointed that decisions on funding must be confirmed in such a short period of time through a trust-fund agreement. The Railway Association of Canada (RAC) is also pleased with the announcement because it includes rail link systems.

Creation of PPP Crown Corp:
The Minister of Finance announced the establishment of a Crown corporation, PPP Canada Inc., to work with the public and private sectors to support public-private partnerships.

Other new money: The budget provides for a number of new investments including:

• $330 million over two years to improve access to safe drinking water in First Nations;
• $250 million for a full-scale commercial demonstration of carbon capture and storage in the coal-fired electricity sector, research on the potential for carbon storage in Nova Scotia and economic and technological issues;
• $300 million to support nuclear energy, including the development of the Advanced CANDU Reactor and maintaining the safe, reliable operations of the Chalk River Laboratories;
• $100 million for the reconstruction and development of Afghanistan, bringing Canada's total projected Afghan aid program to $280 million in 2008-09;
• $34 million over two years for geological mapping to support economic development;
• $10 million over two years to enable repairs and environmental cleanup to permit the transfer of more small craft harbours across Canada from the federal government to interested parties;
• $8 million over two years for a commercial harbour in Pangnirtung, Nunavut.

Other measures: Budget 2008 announced other measures of interest to consulting engineers including:

• Extending the Mineral Exploration Tax Credit for an additional year;
• Extending GST/HST relief to land leased to situate wind- or solar-power equipment for the production of electricity;
• Providing an additional $10 million over two years to strengthen the operations of the Canadian Light Source research synchrotron in Saskatoon;
• Investing in knowledge by providing an additional $80 million per year to Canada's three university granting councils for research in support of industrial innovation, health priorities, and social and economic development in the North;
• Enhancing Export Development Canada's guarantee programs to support the automotive and manufacturing sectors;
• Removing disincentives to work for seniors by raising the current Guaranteed Income Supplement earned income exemption to $3,500 from its current maximum exemption level of $500;
• Supporting Canadian students with a $350-million investment in 2009-10, rising to $430 million by 2012-13, in a new, consolidated Canada Student Grant Program that will reach 245,000 college and undergraduate students per year when it takes effect in the fall of 2009;
• Committing $123 million over four years starting in 2009-10 to streamline and modernize the Canada Student Loans Program.