Finance Committee on Feb. 12th, 2009

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Thank you, Mr. Chair.

Mr. Perrault, in your opening statement, you said that at the very least, conditions must be established. As regards infrastructure projects, you talked about five conditions needed to guarantee a certain level of efficiency. You said that things needed to start quickly, and you also talked about adopting a streamlined process for requests. The fact that you say that suggests that the previous process was not so straightforward.

Can you give us a few detailed examples where the process has prevented work from being completed quickly?

[Jean Perrault]

The Building Canada plan entails a very long process. Take for example the 2007 budgets. We met with Mr. Harper, Mr. Flaherty and Ms. Verner. The Federation of Canadian Municipalities also had the privilege of meeting with Mr. Baird when he was just appointed Minister of Transportation. We pointed out that since 2007, the Buildings Canada initiative was very slow. Negotiations with the provinces, the requirement to have the provinces pay one third of the total, and then making the same request to municipalities was a very long process. Mr. Baird made a commitment on behalf of his entire department to streamline this process. Gathering from what I heard earlier, and what I've already heard previously, he wants to work with the provinces and territories, all the while respecting their jurisdiction. We also respect that.

What is essential is that money be distributed quickly to the provinces. Municipalities want to work with the provinces, according to specific requirements. We're simply saying that if this money is dedicated to infrastructure, to repair water pipes in basements, and waste water systems, then it is not necessary to undertake exhaustive studies in order to deliver the goods locally. I believe that we have to implement a process that will involve people being accountable at the federal, provincial and municipal levels. We're all elected by the same people; at this moment, those people are asking us to work together.

We would also like to see procedures streamlined. For example, if I have a stretch of highway to repair, and it costs $1 to $2 million for a certain distance, tell me that I'm entitled to go ahead with the repairs, I'll tell you when I will be finished, and I'll have the backing of the auditor general and independent accountants, if you require. Those people would be able to tell you that the repairs were made, according to original plans, that the money was not used to cut taxes or any other purpose, such as removing snow, as was mentioned earlier. In fact, we want to obtain answers quickly so that our engineers and workers can get down to work.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Therefore, it is only in completing a project that one can determine whether or not those involved have a sense of responsibility.

[Jean Perrault]

Yes, and I don't think it should take as long as it does.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

You also mentioned cost-sharing and the use of federal loans to help municipalities that are not able to do it on their own. We know full well that some municipalities are not ready to act quickly if they will have to share up to 50% of the cost with the province.

You probably have in mind some type of process where the federal government would undertake to lend the money directly to the municipalities, through the province. Money would be transferred—

[Jean Perrault]

I don't know if it would work in Quebec, but with respect to other provinces, perhaps a loan...In Quebec, I think the municipalities can borrow at an interest rate of 4%...It is available to us if we wish to use it, but it has to be done through the province. We have to have provincial approval. We definitely agree on that.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Earlier, Mr. Morrison said that ideally, all of the engineering work should be done by the private sector because if the municipalities call upon their own resources, this could be considered a subsidy to reduce their costs.

I would like to know what you think about that. With all of the projects that they undertake, do cities not already make ample use of the private sector?

[Jean Perrault]

Absolutely. Small municipalities deal almost exclusively with private sector professionals. Cities like Sherbrooke, Montreal and Quebec City employ generalist engineers who work with the private sector. Most of our projects are subcontracted out. We call for tenders and we work with private companies. If we are eligible for this funding, we must absolutely find a way to get it.. We don't have all of the staff that we would require to meet these objectives. We need a green light to go ahead and get the funding and start planning. If we want shovels in the ground by September, then we need to have the go-ahead today, so that we can plan, hire professionals and borrow money.

You asked earlier if the cities are able to engage in cost-sharing, to share in the funding. It isn't quite that simple for 2009, since we have already done our budgeting, the tax bills have been sent to our citizens, and we have already gone into debt.

If you ask me whether or not, as the mayor, I would be prepared to pay one third next year, I would say that I would rather pay one third than three thirds. I would much rather pay one third, rather than have to pay the entire amount to meet the needs of a city.

The government requires participation...The gas tax is a recurring amount. That allows you to determine how much money will be going to cities like Montreal, Quebec City, Toronto or Vancouver. The province also has to be included, in order to respect its jurisdiction. The federal government will have to act quickly in sending money to the province, so that we can then be given the green light. Give us the green light now, and we will be able to put people to work.

If I don't have the money this year, could the government be a little flexible? The government wants to split the funding three ways so that a total of $12 billion will be invested rather than $4 billion. I understand that. That will put more people to work. If it is flexible, then we could contribute one third in 2009 and start the projects in 2009. We could pay in 2010. It seems pretty straightforward to me.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Laforest.

Mr. Wallace, please.

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Mr. Chair, and thanks to our guests for coming today.

I'm going to focus on the Federation of Municipalities. I was a councillor for 13 years so I have a few questions.

I appreciate that the ACEC and the CCA are here, and the comments on job creation from the Construction Association, after the budget was released, that every billion dollars invested means more than 11,500 jobs. I also appreciate the comments this morning about getting things going.

If I'm hearing you correctly, you're looking for us to take action and get things passed. Just like in a municipal budget, you don't authorize your staff to be out doing things before your municipal budget gets passed. Is that not correct? So you would like to see us get this stimulus package passed through the House of Commons and the Senate as quickly as possible so stimulus money can start to flow. Is that correct?

[Jean Perrault]

You were a city councillor. Our staff are preparing a budget. They have seven dossiers, and you as a city councillor will approve one to five, for instance.

[Mike Wallace, Conservative, Burlington, ON]

Right, in the capital budget.

[Jean Perrault]

Okay, but the other projects are there in the capital budget. Even in the organization, our employees prepare and they hope they have the funds. If they don't have the funds, they will stop at that line.

So we're ready.

[Mike Wallace, Conservative, Burlington, ON]

You are ready. And that is my second question.

There has been some discussion in the press about municipalities not having their third. I can tell you from my perspective, from Burlington and the region of Halton, which is where I'm from, they've given me a long list of capital projects that are in their budget in 2009, approved already through council, ready to go, looking for support.

Would the vast majority of the members of your association have their capital budgets approved, they're ready to go, they're shovel-ready, they're ready to go to permit? I understand what you're saying. They're the top four or five on the list. If they get more money, the list can get longer.

Would you say most municipalities that belong to FCM are ready for that?

[Jean Perrault]

I have a list here of all the cities that have said they have many projects ready to go. If they have an acknowledgment by the province and the federal government of new funding, they'll be able to do more jobs than they already have.

This year we have $15 billion of investment by municipalities. So by asking them a third this year, it's difficult. You were a city councillor. Some are taking the chance and have approved budgets, saying they'll do this if they receive the funding from the federal and the provincial--

[Mike Wallace, Conservative, Burlington, ON]

So your answer to me is that they are ready, that they are prepared?

[Jean Perrault]

Projects are ready, and not all the cities--Toronto, Montreal, or every other one, smaller ones--say they have the third right now. I think it would be difficult. If we have flexibility from the government, as I said before, I would prefer to pay one-third than to pay three-thirds of it. So if you give me the opportunity, because this year.... Will they raise taxes this year? Will they indebt the city for one more third this year? Or can they have the chance to do it next year, for instance, and look at the whole package? I think it would be interesting. That's why we ask for flexibility. We want to--

[Mike Wallace, Conservative, Burlington, ON]

Okay. I only have seven minutes, sir. I'm going to cut you off.

You're a mayor, right? Is that correct?

[Jean Perrault]

Yes, sir, for 15 years. And 12 years--

[Mike Wallace, Conservative, Burlington, ON]

You're well versed on the issue. That's why I asked.

The question I want some clarification on is with regard to the gas tax approach, where it's a direct payment to the municipalities. That money flows based basically on the number of people in your community, right? And there were no federal requirements for EAs attached to that money, that you know of?

I don't think there's one in Ontario; I don't know about other provinces.

[Jean Perrault]

The Province of Quebec has decided, in agreement with the federal government, that the gas tax has to be used for this purpose--for instance, water, sewer, and not asphalt. They have to follow these rules for the gas tax, and that's good. Because if people in cities repair the asphalt, they don't prepare the ground underneath.

[Mike Wallace, Conservative, Burlington, ON]

Right. So in the economic action plan we've put out and the component on infrastructure, with the one-third/one-third, there has been a suggestion.... I could be wrong and Monsieur Mulcair can clarify this, but my understanding is the NDP favoured a straight gas tax approach over the one-third/one-third approach, and they're also complaining it might remove the need for federal EAs.

EAs are still required. If it's municipal, a provincial EA is required. But isn't that contradictory? Aren't we doing the right thing by removing that extra layer of bureaucracy so we can get these projects on the ground--?

[The Chair, Conservative, James Rajotte]

Just for clarification, EA is environmental assessment?

[Mike Wallace, Conservative, Burlington, ON]

That's correct, sir.

[Jean Perrault]

As municipal officers, we have to follow the rules of the land and also follow the rules of environment. No elected officers, at any level, can disrespect the environment. But if there's duplication of things, why can't we just make it easier? But let's follow the rules. Monsieur Mulcair was the environment minister in Quebec, and the cities do not want to go around the rules. We have to follow the rules.

If it's a duplication, if we can cut red tape, let's do it. But let's respect the environment. No elected officers can refuse to respect the environment. We have a legacy to leave.