March 22, 2011

 

Government Not Getting Out of Infrastructure Business:
Budget Reflects ACEC Recommendations

 

The Honourable
James Flaherty,
Minister of Finance

Earlier today, the government released its 2011-2012 federal budget A Low Tax Plan for Jobs and Growth. Of interest to ACEC members is that the government has reaffirmed its “pre-stimulus” infrastructure commitments under the Building Canada Fund through to 2014 as previously planned. In addition, a modest amount of new infrastructure money has been allocated.

Perhaps more significantly, the government has committed to work with provinces, territories and other stakeholders to develop a long-term plan for infrastructure that goes beyond the expiry of the Building Canada Plan.

“We recognize the need to recapitalize
the Building Canada Fund”
– Finance Ministry Official


In its submission to the pre-budget consultations, ACEC recommended three things:

1. Provide flexibility on the stimulus deadline
2. Maintain infrastructure funding at pre-stimulus levels
3. Commit to developing a long-term infrastructure plan

All three of these recommendations are reflected in the 2011-2012 budget.

INFRASTRUCTURE

While ACEC had expected that pre-stimulus commitments would be met, some additional new money has been allocated for infrastructure:

Completing Canada’s Highway From Coast to Coast to Coast: $150 million over five years, starting in 2012-2013

The construction of an all-season road between Inuvik and Tuktoyaktuk will connect Canada from coast to coast to coast, contributing to Canada’s economic and social development in the North.

Maintaining Safe and Reliable Bridges in Greater Montréal: $228 million over three years

The Jacques Cartier and Champlain Bridges Incorporated will receive funds for repairs and major maintenance to ensure that federal bridges in Greater Montréal continue to meet the highest safety standards.

Creating New Capacity at Ridley Terminals

Ridley Terminals Inc. is a federal Crown corporation which owns and operates a marine terminal in Prince Rupert, B.C.. To ensure that Ridley Terminals Inc. can accommodate growth and meet the needs of its customers, the Government will allow the corporation to borrow from capital markets so it can proceed with the necessary expansion of its facilities.

Maintaining and Improving Federal Infrastructure: $148 million over five years

This money is to allow PWGSC to make capital expenditures to maintain the safety of government-owned engineering assets such as bridges, dams and other specialized assets, across Canada.

Repairing Storm-Damaged Small Craft Harbours: $57 million new money over three years

These funds will provide for repairs and associated dredging to fix storm-damaged harbours that are essential to commercial fish harvesters and other harbour users.


Other Budget Provisions Relevant to Infrastructure

  • The government also reaffirmed its commitment to moving ahead on the Peterborough-Toronto Rail Service and the refurbishment of the Saint-John’s Harbour, NB.
  • The Department of National Defense has committed to develop a procurement strategy in consultation with industry to maximize job creation, support Canadian capabilities and innovation and bolster economic growth in Canada.
  • The budget provides $405 million in 2011-2012 to Atomic Energy of Canada Limited (AECL) to cover commercial loses and support its operations.
  • Legislating the permanent annual investment of the Gas Tax Fund to provide $2 billion for predictable, long-term infrastructure funding to municipalities.

RESEARCH AND DEVELOPMENT

The budget contains a number of provisions to encourage research that could potentially make the consulting engineering industry more competitive, including:

  • $37 million per year to support the three federal research granting councils.
  • $53.5 million over five years to support the creation of 10 new Canada Excellence Research Chairs
  • $35 million over five years to the Natural Sciences and Engineering Research Council of Canada to support excellence in climate and atmospheric research at Canadian post-secondary institutions
  • $12 million over five years, starting in 2011-2012, through the Idea to Innovation program to support joint college-university commercialization projects
  • $40 million over two years to Sustainable Development Technology Canada to continue to support the development and demonstration of new clean technology projects
  • $80 million over three years through the Industrial Research Assistance Program (IRAP) to help small and medium sized businesses adopt new technologies
  • $2.1 million per year starting in 2012-2013 to the Standards Council of Canada to modernize national standards and support a stronger Canadian voice in developing international standards.

PROMOTING EDUCTATION AND TRAINING

The budget contains provisions that could help engineering firms attract qualified personnel, including:

  • $60 million over three years to promote increased student enrollment in key disciplines including engineering
  • Tuition tax credit now applicable to examination fees required for professional licensing, or certification
  • Help for foreign trained professionals to cover costs related to tuition and other training costs associated with the foreign credential recognition process.

ENVIRONMENTAL OPPORTUNITIES

The budget also provides funding intended to protect Canada’s natural environment and address environmental risks, including:

  • $870 million over two years for Canada’s Clean Air Agenda, including $400 million for the ecoENERGY Retrofit – Homes program
  • Continuing action to assess, remediate and monitor federal contaminated sites
  • Renewal of the Chemicals Management Plan with $200 million over two years to assess and manage the risk of harmful chemicals
  • $27 million over two years to improve Environment Canada’s weather services.

REDUCING BUSINESS COSTS

Budget provisions are also proposed to make businesses more competitive, including:


  • One-time Hiring Credit for Small Business of up to $1,000 against an employer’s increase in 2011 Employment Insurance premiums over 2010 to help defray the costs of additional hiring
  • Extension of work-sharing agreements by up to 16 weeks so that companies can avoid layoffs
  • Extension of the Mineral Exploration Tax Credit for flow-through share investors for an additional year
  • Continuation of the Red Tape Reduction Commission.

NATIONAL DEFICIT

The deficit for 2011-2012 is project to be $29.6 billion (down from an actual deficit of $55.6 billion in 2009-2010).

The deficit is expected to decline to $0.3 billion in 2014-2015.

A surplus of $4.2 billion is projected for 2015-2016.

USEFUL LINKS

This document has been prepared by ACEC for the convenience of its Member Firms. To consult the official budget documents, please visit Finance Canada.

The Globe and Mail also provides a strong budget analysis.

To view ACEC’s submission to the Finance Committee, click here.


 

Sincerely,

John Gamble, CET, P.Eng.
President

Association of Consulting Engineering
Companies | Canada
420 - 130 Albert St., Ottawa ON K1P 5G4
Tel.: 1-800-565-0569 Fax: (613) 236-6193
www.acec.ca