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April 2014

New Building Canada Fund: ACEC seeks clarifications, proposes improvements


In February, the federal government made its long-awaited announcement on the New Building Canada Fund (NBCF), a $14 billion fund that “will support projects of national, regional and local significance that promote economic growth, job creation and productivity.” The NBCF is a key component of the New Building Canada Plan (NBCP) which also includes the P3 Fund of $1.25 billion over 5 years. Other components include $2 billion/year (plus 2% indexing) for the Gas Tax Fund and $10.4 billion over 10 years under the incremental Goods and Services Tax Rebate for Municipalities.

This significant investment is welcome news for the consulting engineering sector and its clients. ACEC looks forward to working with the government and its stakeholder partners on the successful implementation of the NBCF. In the spirit of continuous improvement, ACEC and other stakeholders, including the Federation of Canadian Municipalities and the Canadian Construction Association, have identified a number of outstanding issues for consideration by the government. These issues have been raised with Minister Lebel’s office: 

  • The NBCP is a complex and long-term program and the stakeholder community has requested that there be regular ongoing consultations throughout the life of the plan. This would allow, where warranted, adjustments to the plan in order to reflect changing priorities, offer opportunities to streamline processes, or reallocate funds to reflect those elements of the plan where there is more uptake or demonstrable need.
  • There is concern that the decision of PPP Canada on whether large scale projects should be delivered as a public-private partnership would be considered final and binding. This change from the previous program is a concern which warrants further discussion. Municipalities may resent the perception of "bureaucrats" in Ottawa making such a determination on their behalves. ACEC also seeks clarity on whether a P3 screen would be required if a project had previously been subject to a provincial screen. There is a concern that a P3 screen could add up to 18 months to the application process. This would all but ensure that major projects over $100 million will miss this construction season.
  • It appears that funds will no longer be “stackable” as they were in the previous program. For instance, a municipality had previously been able to use money from the Gas Tax Fund as its contribution in order to leverage access to NBCF or P3 funds.
  • Some municipalities in some of the smaller provinces are concerned in some cases about their province’s ability to contribute the provincial one-third funding portion.  Some of the larger municipalities have suggested that they would be willing to contribute up to 50% for certain key municipal projects, if there was flexibility on the part of the federal government to increase their contribution to 50%, when the provincial contribution is not available to them.  This flexibility may be helpful in some regions to get this funding moving.
  • The government may wish to consider granting a municipality additional flexibility as to how to invest infrastructure funds if it has a robust asset management plan in place. This would also act as an incentive for municipalities to develop and adopt asset management plans.

ACEC and other stakeholders will continue to reinforce support for infrastructure investment and continue to explore opportunities to provide the most effective program possible with government representatives.

For more information about the NBCP and NBCF, please refer to Infrastructure Canada’s website.

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