Canada makes largest and longest investment in infrastructure

The construction industry’s reaction to the Federal Budget delivered on Thursday, March 21 by Finance Minister James Flaherty has been positive — not surprisingly since infrastructure spending was front and centre in the announcement.

John Gamble, president of the Association of Consulting Engineering Companies-Canada (ACEC) applauded the government “for this significant investment in Canada’s future,” and in particular for adopting its recommendations and taking a long term funding approach.

The Building Canada plan will see $4.7 billion per year spent on infrastructure projects over the next 10 years beginning in 2014-2015. ACEC noted that the plan “represents the largest and longest federal investment in provincial, territorial and municipal infrastructure projects in Canadian history.”

Karen Leibovici, president of the Federation of Canadian Municipalities, also applauded the new plan, in particular praising the government for indexing the gas tax transfer, which she noted was the first indexing of funds transferred to municipalities: “By protecting the purchasing power of the gas tax transfer, and by extending program funding for 10 years,” Leibovici said, “this budget entrenches the principle of longer-term sustainable infrastructure funding.”

In its announcement, the government says the Building Canada plan provides a total of $53 billion “to build roads, bridges, subways, commuter rail and other public infrastructure in cooperation with provinces, territories and municipalities.”

The plans include:

– $32.2 billion through a Community Improvement Fund consisting of an indexed Gas Tax Fund and the incremental Goods and Services Tax Rebate for Municipalities to build roads, public transit, recreational facilities and other community infrastructure.

– $14 billion for a new Building Canada Fund to support major economic projects that have a national, regional and local significance.

– $1.25 billion for a renewed P3 Canada Fund to continue supporting innovative ways to build infrastructure projects faster and provide better value for Canadian taxpayers through public-private partnerships.

In the next 10 years the government will also spend $7 billion on First Nations infrastructure and $10 billion on federal assets, including “bridges, fishing harbours, ports, military bases and departmental accommodations.”

Overall, the government says that the new Building Canada plan, combined with other federal infrastructure investments will result in $70 billion in federal infrastructure funding over 10 years, “the largest federal investment in job-creating infrastructure in Canadian history.”