Government Operations Committee on March 5th, 2009

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Thank you, Mr. Chair.

Minister, earlier, when you listed the amounts allocated to the various provinces, you did not talk about Quebec. I am going to read you an extract from a press release issued by the Union des municipalities du Québec last Friday, entitled: “ Investment in infrastructure—the UMQ condemns the snail's pace at which negotiations between the federal government and Quebec are progressing “:

Although the municipalities have more than $4 billion in projects ready to kick off to stimulate the economy, they still do not have access to the announced funding as promised by the federal government back in 2007. UMQ members are extremely concerned, because, in the meantime, the employment rate continues to rise.

The President of the UMQ added the following:

The majority of mayors have said that they have literally had their foot on the shovel for the past two years. They are waiting for the agreement to be signed at any moment while the economic situation demands immediate action. Over the next few days, mayors from across Quebec are mobilizing to ensure that all provincial and federal elected representatives are aware that the money announced must be spent within the next twenty-four months.

What are we going to tell the mayors? What will the federal MPs tell the mayors about the delay in getting these agreements signed?

[John Baird, Conservative, Ottawa West—Nepean, ON]

First, I must stress that the municipalities come under provincial jurisdiction. We respect provincial jurisdiction. The Quebec National Assembly was quite clear, we must work with it in areas that fall under provincial jurisdiction. I would like to identify such projects more rapidly, in cooperation with the government of Quebec. I must say that I have a good relationship with Minister Jérôme-Forget, with Ms. Normandeau and with the office of the premier. If the federal government and the provincial government cooperate, this process could go quite quickly. It is never easy to establish intergovernmental relations.

The Quebec government has a process that has been in place for a long time, and this requires us to work with it. I am not complaining and I respect Quebec law, which states that we must work with that government. I am convinced that the Quebec government wants to make decisions as quickly as possible with regard to these new investments, in order to create jobs and break ground on these projects. A lot of progress has been made, but it is not enough. We will continue to work in this regard.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Mr. Minister, I also respect jurisdictions. The municipalities are asking to see results from negotiations between Ottawa and Quebec. When the Liberals were in power, agreements were signed.

Are you the ones delaying the process? Have you imposed requirements that the Quebec government is refusing to respect? If so, the municipalities are the ones paying the price. They have been prepared to start these projects since 2007, what is the stumbling block? Are you being too demanding?

[John Baird, Conservative, Ottawa West—Nepean, ON]

Under the communities component of the Building Canada Fund, there are $210 million for this kind of project. We need to sign an agreement with Quebec and we were very close to doing so. I am well aware that the Quebec government wants to work with us and that progress is being made. The details will follow. We have made a lot of progress with regard to Ontario, Saskatchewan and British Columbia. I am fully aware of the importance, for Quebec municipalities, of concluding a good agreement with the province. There are various policies. Under legislation passed by the National Assembly, municipalities must not only negotiate with the minister responsible for infrastructure, but also with the Minister of Intergovernmental Affairs. It is not my place to say whether their process works or not, but that is the National Assembly's wish, and I respect it. The process has not been as fast as we would have liked. My mandate is to ensure that things move more quickly.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Okay. You are telling me that you are not the ones behind the delay, but rather the Government of Quebec. It is that correct?

[John Baird, Conservative, Ottawa West—Nepean, ON]

No, I am saying that the system that is already in place ensures that we need to resolve a number of details with the Government of Quebec. Investments are shared between the Government of Quebec and the federal government. My deputy minister went to Quebec City on Monday, where he met with his provincial counterparts. This meeting went well and we are very close to making a number of announcements.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

If you do not sign agreements with the provinces, you could decide to keep the $4 billion set aside in the budget and invest it elsewhere. Do you intend to do everything possible to sign an agreement with Quebec? Is the province at risk of losing that money?

[John Baird, Conservative, Ottawa West—Nepean, ON]

Absolutely.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Is it at risk of losing it, if an agreement is not reached?

[John Baird, Conservative, Ottawa West—Nepean, ON]

No, of the $4 billion, we want to spend approximately $1 billion or slightly less in Quebec. Some projects fall under provincial or municipal jurisdiction, and we respect that. Among the projects under federal jurisdiction, many concern bridges, airports and ports, for example. I received a number of requests from Sept-Îles, Quebec City and Montreal concerning federal infrastructure. Our top priority is to maintain good relations with the province and the municipalities. As Minister of Transport, I receive a lot of requests regarding airports and ports, in each region. We could also do a little bit of everything, meaning provincial or municipal projects or in other areas. If we could work with the province, we could, with a provincial portion and a municipal portion, do a lot more and create many jobs. That is our top priority.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

You are hoping that there will be an agreement with Quebec, but if there is not, you will act within the framework of your own jurisdiction, if I understand correctly.

[John Baird, Conservative, Ottawa West—Nepean, ON]

I am going to answer in English.

My first priority and my first objective is to work constructively with Quebec. What we won't be doing with any province, with this new fund, is spending two years negotiating a framework agreement. We don't have the time in this economic situation. What we hope to do is work cooperatively with the Government of Quebec and establish a group of projects that can be funded expeditiously, so that Canadians and Quebeckers can get the much-needed shot in the arm.

I'm not going to contemplate failure. I am committed to do my level best to work with the province. We don't have time to spend a year or two years debating wording of contribution agreements, debating whether we should fund this or that. We need to move expeditiously. I strongly believe this is the view of the Province of Quebec. That's the view of the average Quebec family. They want to see us work constructively and get results.

[The Chair, Liberal, Derek Lee]

Thank you.

Mr. Gourde, you have eight minutes.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Thank you very much, Mr. Chair.

I want to thank the minister for coming and for being available at a time when, we know, his time is extremely limited.

Minister, could you give us details about the benefits related to this unprecedented investment by our government in infrastructure, specifically with regard to Canadian municipalities?

[John Baird, Conservative, Ottawa West—Nepean, ON]

We are talking here about money for gas, the GST transfer for municipalities, provincial projects. In Canada, the investment last year and this year in construction and infrastructure remains the most significant, and that is a good thing. Given the current global economic crisis, we are extremely aware of needing to do more and do it much faster. I accept this and that is why we are taking action.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Minister, I would like to hear your comments about how these new projects set out in Budget 2009 will stimulate the economy and accelerate investments in infrastructure.

[John Baird, Conservative, Ottawa West—Nepean, ON]

I think if we make important, needed investments.... I'll use the example right here in the town where we are. We're working in cooperation with the province and the city on building a new convention centre. This will create a significant number of jobs in the short term and put a lot of money into the economy, both for labour and for materials, whether those be concrete, cement, or other building materials. When that new building is complete, we will be able to give a real boost to the tourism sector, to retail, and to hospitality, and get the associated benefits that come with that. This will allow us to do a great job, not just in the short term but into the future, because of that investment.

If we can reduce congestion on our roads with investments in public transit, that will not just improve the quality of life, but that will add environmental benefits and also make our economy more competitive. That is important, if we make investments in airports and ports that will allow goods and services and people to be moved around. We can create jobs in the short term and get more money into the economy. When we come out of this economic downturn, we'll be able to be stronger than when we went in, and we're committed to that.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Minister, how can we accelerate base funding for provinces and territories? What does this mean for them, and what is the purpose of this funding?

[John Baird, Conservative, Ottawa West—Nepean, ON]

Under Building Canada, every province is entitled to $25 million a year, for a total of $175 million a year. The process is very quick. They just have to submit a letter outlining the projects they'd like to spend the money on and we can flow the money.

We have offered to all provinces that if they would like to accelerate that and seek the full $175 million, we're prepared to do that. We have a good amount of support. Some provinces will want it all right away. Others will want it over two or three years. We make the offer on the acceleration. It has been generally positively received. It depends on the nature of the project. If you're dealing with something in northern Canada, obviously the construction season is shorter. You have to get materials in and out. There's significant transportation. If you're looking at simply resurfacing a road, obviously you can move more expeditiously. If you're looking at, as we will be in Human Resources and Skills Development Canada, social housing retrofits, they can be done far more expeditiously than building a new $100 million building.

We've offered this directly to all the provinces, so I think we're prepared to be as helpful as we can by accelerating the existing investments in addition to the new initiative we've come forward with. Sometimes a significant amount of planning has to be done, and now engineers can get to work, architects can get to work, and planners can get to work, which is good.

We also know that the best way to get infrastructure going in the future is to make decisions now. Even if it's going to take two or three years, let's not take two or three years to make the decision and then two or three years to get the project going. The good news is that we have a good amount of interest from around the country, from provinces, on this. That acceleration is just another effort on our part to be constructive and helpful.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Minister, there has been a lot of discussion about the need for all levels of government to work together. What is our government doing to encourage and support such cooperation, in order to ensure that all the provinces and municipalities get their share of the funding as quickly as possible?

[John Baird, Conservative, Ottawa West—Nepean, ON]

I think in most cases it's about leadership from the top. Where there's a cooperative spirit on all three levels of all sides, on the municipal side, on the provincial side, and on the federal side, things can happen. We can go farther faster. That takes a lot of personal engagement.

I've met with all of the premiers. I've met with all of the ministers, all the provinces and territories, and underlined that. Generally speaking, it has been well received. We've made a good amount of progress in the last month and a half to two months on getting projects announced so that municipalities and provinces can get tenders out and shovels in the ground as soon as possible.

It does take a lot of personal engagement. In your province of Quebec, I personally get involved, with cabinet colleague Christian Paradis, to work constructively with the provincial government. I think it has been well received.

Often it's tough to get decisions made when you have a good number of approvals. We've done our part at the federal level to try to expedite those. We've challenged municipalities and we've challenged provinces to do everything they can. And that's going to be good news, I think.

Obviously I can't speed up a provincial or a municipal process. That will be up to them. Sometimes it goes quicker, and sometimes it goes slower than we like, but we're working awfully hard.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

In closing, I would like to make a comment on the reimbursement of the excise tax on gas. This measure was very popular in my riding. In fact it greatly helps our small municipalities improve their water systems, roads and certain sports infrastructure.

Will this measure be renewed, Minister?

[John Baird, Conservative, Ottawa West—Nepean, ON]

Yes. We announced in last year's budget that the gas tax transfer would be made permanent. It increased this year; in fact it doubled this year.

You know, when we go into an economic hard time, rather than cutting our transfer partners we're actually increasing support. But with this new economic stimulus money, what we want to do is ask how we can stretch it as far as we can. If we can get provinces and municipalities to join us in matching our investments, we can create three times as many jobs. We can get three times as much money, three times as much of a shot in the arm.

Some municipalities have said they just don't have the money. We came forward with a $2 billion initiative to provide low-interest loans to some municipalities who are in need of that. The good news is that there will be.... There's no doubt in my mind that these programs will be oversubscribed and we'll have to turn down a lot of great projects. That speaks to the demand and to the cooperation and willingness out there.

[The Chair, Liberal, Derek Lee]

Thank you.

Mr. Martin, for eight minutes.

[Pat Martin, NDP, Winnipeg Centre, MB]

Thank you, Chair.

Thank you, Minister Baird.

Minister, two themes have come through your remarks today. One is flexibility and one is fast-tracking. I too look forward to the rollout of this money. I know you're aware of my riding; you've been there. And you're always welcome there as long as you bring your chequebook, which you often have--