Transport Committee on May 5th, 2015

[Hoang Mai, NDP, Brossard—La Prairie, QC]

I have a question that is related to the new building plan. We got complaints from the ferry association, which moves 55 million passengers annually and operates across the country. There is an issue with the building Canada plan in that it excludes passenger ferries operating outside urban centres from receiving funding. Can you tell us why?

[Stephanie Tanton]

My understanding is that nothing precludes ferry providers from being eligible recipients; however, under our categories, ferries are eligible only as part of public transit systems. Is that what you're referring to?

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Yes, but our understanding is that they can't access the funding from the building Canada plan, and even though they are a major economic contributor, moving millions of passengers, they can't access that fund. Their complaint is that they don't fall under the criteria.

[Stephanie Tanton]

As I said, yes, the issue is that currently under the public transit category we fund ferries. It requires them to be part of a public transit system, so the ferries that are outside that.... That is my understanding of the issue you're raising.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Is there any plan—

[The Chair, Conservative, Larry Miller]

You're out of time but if you're very brief....

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Very briefly, is there a plan to include them? Because I think it is important to include ferries even though they're not in urban centres.

[Jeff Moore]

We have a business guide that shows what's eligible and what's not eligible in our programs. Under the public transit category of our program we say we can support:

Transit infrastructure and rolling stock, including but not limited to bus rapid transit (BRT), light rail transit (LRT), subways, buses, urban passenger ferries and regional commuter rail.

[The Chair, Conservative, Larry Miller]

Thank you.

Mr. Yurdiga, you have five minutes.

[David Yurdiga, Conservative, Fort McMurray—Athabasca, AB]

Thank you, Mr. Chair, and to Infrastructure Canada for being here today.

Mr. Moore, on the gas tax fund, funds are allocated largely based on population. What other criteria are used in determining the amount of funds a municipality gets?

[Jeff Moore]

That's pretty much it.

[David Yurdiga, Conservative, Fort McMurray—Athabasca, AB]

That's it?

[Jeff Moore]

That's based on a pro-rated population base in terms of allocations, yes. The funds flow through us to provinces and territories, and they flow the funding to municipalities. But it's purely population based unless—

[Bogdan Makuc, Director General, Program Integration, Infrastructure Canada]

Yes, from the federal government to the provinces it's population based, with exceptions for the smallest: the three territories and P.E.I., which get a fixed amount of 0.75% of the total amount.

But how they transfer to municipalities varies a lot, actually by jurisdiction. Some provinces do have a minimum floor that each municipality will get; some provinces do not. There's actually quite a bit of range as to how the funds are flowed from within each jurisdiction. We could spend a lot of time going through it blow by blow. It's pretty much different I think for almost each jurisdiction, slight nuances, but primarily, as Jeff said, it's on a population basis.

[David Yurdiga, Conservative, Fort McMurray—Athabasca, AB]

Is the province involved at all in determining the amount that goes to a municipality?

[Bogdan Makuc]

The allocation formulas are all included in the agreements that we negotiate and sign with each of the provinces and territories. It's an agreed-upon formula.

[David Yurdiga, Conservative, Fort McMurray—Athabasca, AB]

That was my concern because a lot of these smaller communities are a service centre and they may have a population of less than 1,000 but what happens is that they're servicing an area of 20,000. There's a lot of pressure on them to provide infrastructure to meet the needs. That was why I asked that question, because some municipalities expressed some concern on that.

Moving on, but still on the gas tax fund, who else qualifies? Do first nations qualify? Do the Métis settlements qualify for the gas tax fund?

[Bogdan Makuc]

Under the gas tax fund there is a specific allocation amount that is taken out of the program off the top and provided to Aboriginal Affairs and Northern Development Canada to manage for on-reserve groups, for first nations on reserve. That is managed outside of our department and not only through the gas tax fund. There are allocations taken off other programs as well under the provincial and territorial infrastructure component under the NIC.

Beyond that, the gas tax fund that we then deliver to provinces that flows to municipalities, it goes to the municipalities as defined by each jurisdiction. They will decide who the recipients are within that jurisdiction.

One thing that is encouraged under the gas tax fund is collaboration and working together to try to address some of the issues you mentioned about these very small jurisdictions. We know that some provinces, and Saskatchewan is a great example, have encouraged small municipalities to work together, whether it be with first nations or other groups, to try to promote infrastructure that makes sense on a regional basis.

[David Yurdiga, Conservative, Fort McMurray—Athabasca, AB]

I have a municipal background, and some of these smaller communities.... As a county we actually shared in infrastructure costs because we recognized the importance of helping our partners, because we're one community, a community within a community, so you always like to look after each other. Some communities do that and some don't, and that was the concern of mine.

Moving on to the P3 projects, how successful is the program? Are there a lot of P3 programs being implemented around, say, the province of Alberta?

[Jeff Moore]

It's funny you should ask that because the first project we actually approved under the new building Canada fund was a P3 project in Edmonton for their light rail project. That was our first and our only one so far. There will be others. We hope there will be others.

The way that we deal with P3s through the new building Canada fund is that we look at projects that hit a threshold of a total project cost of $100 million. Once you hit that threshold, we do a P3 assessment to see if the project would be viable as a P3. It means we have to go through a suitability assessment with the proponent, make sure that we do almost like an initial screen and then, if that's positive for a P3, we do a procurement options analysis that will tell us what kind of procurement method would be best suited for that type of project.

If the analysis shows that it's going to be a P3, then that's going to affect our cost-sharing ratio. In most cases we will cost share at 33% for a project. If it's a P3, it would be at 25%.

[David Yurdiga, Conservative, Fort McMurray—Athabasca, AB]

Further on the P3, what can qualify for a P3? Is it any type of infrastructure or is it only for programs that don't qualify under other programs?

[Jeff Moore]

Again, it all depends on the situation. Every project is assessed on its own merit. Some asset classes perform better as P3s than others. It also depends on size. The bigger a project is probably the more viable it might be as a P3. That's why we use the $100-million screen for total project cost. Again, it all depends on the merits of the project and what's involved.

[The Chair, Conservative, Larry Miller]

Thank you.

Mr. Komarnicki, you have five minutes.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

Thank you.

We hear a lot about the infrastructure deficit—whatever that might mean—and the estimates vary quite widely. I see in our notes here that the size of municipal infrastructure deficit, based on surveys published between 1996 and 2012, has been estimated at between $44 billion and $238 billion. That's quite a variance and hardly anything that you can specifically rely on. To my way of thinking, an infrastructure deficit would mean that if you had to replace an asset and hadn't replaced it after whatever its lifespan was, you're in some kind of a deficit situation. Therefore, most municipalities amortize their core infrastructure, whether it's a water or sewer line or a waste water management plant. The aging of it maybe has some significance.

When I look at your speaking notes, you talked about the average age of core infrastructure over the past 10 years, and you show a decline of 2.8 years. At least that would tell me that we are making progress. Similarly, when you look at the spending on the infrastructure base to GDP, if you're going upwards, that's progress.

When you look at the amount of money you've spent—in your speaking notes you said it's risen from 2.5% in the 1990s to 13% at its peak—you can say that's progress.

How do you arrive at the aging formula relating to core public infrastructure? Where do you get your information? What does it mean? How do you assemble the specific age of an infrastructure project across the country? Can you get into that detail a little bit for me?

[Jeff Moore]

In terms of the average age for infrastructure, the best data that's available to us is from Statistics Canada. They use a number of key variables to determine the average age. They look at the amount of investment that's made in public infrastructure. They also look at the year in which the investment was made, and they also look at what we call year-end gross capital stock. Year-end gross capital stock is measured by value, not by the number of units. It's not by the number of assets that you have; it's the value of the assets that you look at.