Infrastructure cornerstone of federal budget
New investments good news for consulting engineers, clients and Canadians
Minister of Finance
On March 22, the Liberal government’s first budget was tabled by Finance Minister Bill Morneau. The Budget focused on immediate and long term growth of the economy through investments in infrastructure and innovation with a goal to strengthen and expand the middle class.
- Over $60 billion in new federal infrastructure investments in two phases ($12 billion in the first phase) in addition to the existing Building Canada Fund;
- Acceleration of portions of the existing Building Canada Fund;
- Previously uncommitted money from the previous Building Canada Fund added to the Gas Tax Fund over the next two years;
- An additional $3.4 billion in investments for federal infrastructure assets;
- $2 billion over three years of new money for infrastructure investment in post-secondary institutions;
- Deficit of $29.4 billion in 2016-17, decreasing to $14.3 billion in 2020-21; and
- Debt-to-GDP ratio of 32.5% in 2016-17, decreasing to 30.9% in 2020-21.
The government’s approach to infrastructure investment is a strong indicator that recommendations presented by ACEC and other stakeholders over the past several years and during the pre-budget consultation period were taken under advisement. ACEC applauds the government for reaffirming its commitment to invest over $120 billion on infrastructure over 10 years.
The federal budget also contains significant measures to encourage and support environmental sustainability. While encouraged that the government proposes a rigorous environmental assessment process based on science, ACEC will be seeking assurances that processes will be efficient and won’t encourage frivolous or vexatious delays to infrastructure and resource projects that are important to the economy.
ACEC is disappointed that there was minimal assistance to the resource sector which has carried Canada’s economy over many decades. The deferral of tax relief for small businesses is also unfortunate for this important segment of the Canadian economy.
On balance, this appears to be a positive budget for most of the consulting engineering sector. ACEC will continue to work with the government to ensure that successful implementation of the budget is effective, efficient and timely for ACEC members, their clients and Canadians.
PHASE 1 OF CANADA’S NEW INFRASTRUCTURE PLAN
- $11.9 billion over five years, starting right away:
- $3.4 billion over three years to upgrade and improve public transit systems across Canada;
- $5.0 billion over five years for investments in water, wastewater and green infrastructure projects across Canada; and
- $3.4 billion over five years for social infrastructure, including affordable housing, early learning and child care, cultural and recreational infrastructure, and community health care facilities on reserves.
- The federal government will increase its contribution to 50% of eligible costs for projects funded under these three new infrastructure funds.
- Transferring responsibility for PPP Canada Inc. to the Minister of Infrastructure and Communities and eliminating the mandatory PPP screening.
- There was no mention of the expected plan to create an infrastructure bank.
- $3.4 billion over the next five years to maintain and upgrade federal infrastructure assets such as national parks, small craft harbours, federal airports and border infrastructure as well as supporting the clean-up of contaminated sites across the country.
- Continuation of the $3 billion per year in dedicated funding for municipal infrastructure projects through the Gas Tax Fund and the incremental GST Rebate for Municipalities.
- Acceleration of $9 billion available under the New Building Canada Fund’s Provincial-Territorial Infrastructure Component and other existing infrastructure programs.
- Transfer of remaining uncommitted funds from older federal infrastructure programs to municipalities through the Gas Tax Fund in 2016–17.
SELECTED INFRASTRUCTURE HIGHLIGHTS
The Government will fund up to 50 per cent of eligible costs for projects. Funding under the program will be allocated to municipalities based on ridership. Projects include:
- Upgrades to subway tracks, bridges, signals and switches for the Montreal Metro;
- Fleet replacement, including the purchase of new subway cars, low-floor buses, and streetcars by the Toronto Transit Commission; and
- Accelerated design, implementation and construction work for new large-scale projects (e.g. light rail transit lines in Greater Vancouver and Ottawa).
- $75 million in new funding for local governments to address climate change, to be delivered by the Federation of Canadian Municipalities;
- $125 million over the next two years to the Federation of Canadian Municipalities to enhance the Green Municipal Fund.
Developing Community Capacity for Asset Management
- $50 million capacity-building fund to support the use of asset management best practices across Canada delivered through the Federation of Canadian Municipalities;
- Infrastructure Canada will work with Statistics Canada to improve infrastructure-related data.
New Clean Water and Wastewater Fund
- $2.0 billion over four years for immediate improvements to water distribution and treatment infrastructure;
- Government will fund up to 50 per cent of eligible costs for projects; and
- $1.8 billion over five years to ensure proper facility operation and maintenance on First Nations reserves.
Expanding Affordable Housing
- $2.3 billion over two years (including $739 million for First Nations, Inuit and northern housing).
Cultural and Recreational Infrastructure
- $168.2 million over two years in the Canada Cultural Spaces Fund to support renovation and construction of arts and heritage facilities;
- $150 million to Regional Development Agencies over two years (cost-shared with municipalities, community organizations and non-profit entities) to renovate, expand and improve existing community and cultural infrastructure.
Indigenous Community Infrastructure
- $1.8 billion over five years to support clean drinking water and the treatment of wastewater on reserves;
- $409.0 million over five years to improve garbage and waste management on reserves;
- $270.2 million over five years to expand and enhance health facilities in First Nations communities;
- $732.0 million over two years to address housing needs on reserve and in Inuit and northern communities;
- $129.4 million over two years for repairs and renovations of Indigenous early learning and child care facilities;
- $76.9 million over two years to support the construction of cultural and recreational communities on reserve; and
- $10.4 million over three years for renovations and the construction of new shelters for victims of family violence in First Nations communities.
Improving Access for Rural Communities to the Digital Economy
- $500 million over five years starting for a new program to extend and enhance broadband service in rural and remote communities.
Accelerating Federal Infrastructure Investments
- $3.4 billion over the next five years to maintain and upgrade federal infrastructure assets, over and above the government’s commitment to provide nearly $60 billion in new infrastructure funding over the next 10 years, including:
- $191 million on trails and highways in national parks;
- $149 million to revitalize small craft harbours across the country;
- $217 million for environmental remediation work on contaminated sites;
- $139 million to federal laboratories and other federal assets that support science, research and innovation;
- $281 million to support construction of a new collection and conservation centre for the Canada Science and Technology Museum; renewal of the National Arts Centre’s performance venues; and repairs to the National Gallery of Canada;
- $232 million in safety and security including National Defence infrastructure and marine infrastructure at Canadian Coast Guard bases;
- $91 million to support transportation infrastructure for airports and ferries; and
- $2.1 billion for repairs and retrofits to its properties and buildings, including greening of government assets.
BUILDING A MORE INNOVATIVE COUNTRY
- Budget 2016 proposes several interim measures to promote research and accelerate business growth by:
- Focusing new federal support for science on world-class discovery research;
- Maintaining funding for commercialization of promising scientific discoveries and industry take-up of emerging applications; and
- Building a better evidence base to identify gaps, evaluate performance and inform future decisions.
Strategic Infrastructure Investments at Post-Secondary Institutions
- $2 billion over three years to support up to 50 per cent of the eligible costs of infrastructure projects at post-secondary institutions and affiliated research and commercialization organizations.
Strengthening Canada’s Research Capacity and Excellence
- $95 million per year on an ongoing basis to granting councils:
- $30 million for the Canadian Institutes of Health Research;
- $30 million for the Natural Sciences and Engineering Research Council;
- $16 million for the Social Sciences and Humanities Research Council; and
- $19 million to support indirect costs of post-secondary institutions undertaking federally sponsored research.
Help to Small and Medium-Sized Companies to Innovate and Grow
- An additional $50 million to increase the number of companies served by the National Research Council’s Industrial Research Assistance Program; and
- $4 million over two years to renew the Canadian Technology Accelerator Initiative.
STRENGTHENING NORTHERN ECONOMIC DEVELOPMENT
Mineral Exploration Tax Credit
- Extension of the 15-per-cent Mineral Exploration Tax Credit until March 31, 2017 resulting in $20 million to junior mining companies over 2016–18.
PROMOTING A CLEANER, MORE SUSTAINABLE ENVIRONMENT
- $1 billion over four years starting in 2017–18 to support clean technology in the forestry, fisheries, mining, energy and agriculture sectors;
- $130 million over five years to support clean technology research, development and demonstration activities;
- $62.5 million over two years to Natural Resources Canada to support infrastructure for alternative transportation fuels, including charging infrastructure for electric vehicles and natural gas and hydrogen refueling stations;
- $50 million over two years to invest in technologies to reduce greenhouse gas emissions from the oil and gas sector;
- $3.4 billion over five years to address climate change and air pollution, protect ecologically sensitive areas and evidence-based the environmental assessment processes;
- $56.9 million over two years to for the development of regulations and standards for clean transportation technology;
- $128.8 million over five years to Natural Resources Canada to deliver energy efficiency policies and programs;
- $10.7 million over two years for renewable energy projects in off-grid Indigenous and northern communities ;
- $129.5 million over five years to build the science base to inform decision-making for building resilience in the North and Indigenous communities; and
- $40.0 million over five years to integrate climate resilience into building design guides and codes.
CANADA’S ENVIRONMENTAL ASSESSMENT PROCESSES
- $16.5 million over three years to the National Energy Board, Natural Resources Canada and Transport Canada to support public and Indigenous participation in enhanced consultations in projects undergoing reviews by the National Energy Board and to support Crown consultations with Indigenous people based on the following:
- Project reviews will continue within the current legislative framework and in accordance with treaty provisions;
- Decisions will be based on science, and traditional knowledge of Indigenous peoples;
- The views of the public and affected communities will be sought and considered; Indigenous peoples will be meaningfully consulted, and where appropriate, impacts on their rights and interests will be accommodated;
- Direct and upstream greenhouse gas emissions linked to the projects under review will be assessed; and
- Funding provided to the National Energy Board will be fully cost-recovered from industry.
- $14.2 million over four years to the Canadian Environmental Assessment Agency to support its responsibilities under the Canadian Environmental Assessment Act, 2012.
- $10.1 million over four years to the Canadian Northern Economic Development Agency to improve the timeliness, predictability and transparency of northern regulatory review processes.
This communication has been prepared by ACEC for the convenience of its member firms. It is not intended as a comprehensive guide to the budget. For details on Budget 2016, please visit the Government of Canada’s Budget 2016 website.
ACEC, the voice of consulting engineering in Canada, advocates for a business and regulatory climate that allows its members to provide a high level of service and value to their clients. For information on ACEC’s advocacy on behalf of its members, visit www.acec.ca.
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