Thank you very much, Mr. Chair. It's a great pleasure for me to be here.
I was particularly excited to be asked to come before the finance committee for two big reasons: one, because I've never appeared before committee with your able chairmanship; and two, I have great admiration and respect, and even a bit of affection, for the finance critic of the official opposition. When I was asked to come here, I just thought what a great opportunity it would be for him to ask me questions and to have an exchange with him. As I'm not the finance minister, I don't have that luxury in the House of Commons. I have great respect for him, and I'm looking forward to his able questions and his wise helmsmanship of the finance file for the official opposition.
So thank you for being here, Mr. McCallum.
I have prepared a speech, but I thought I might just speak off the cuff about infrastructure spending.
Obviously we're facing some global economic uncertainty, global economic challenges. Canada is not immune to that. All the G20 leaders have agreed there is a need for major stimulus. We started that in 2008 with significant tax reductions. We started that with significant infrastructure investments, but we realize we have to build on that. We think it is incredibly important to push infrastructure projects. We believe they are not the whole answer, but they could be an important shot in the arm for the Canadian economy. That's why we're moving aggressively on infrastructure spending.
The one thing that successive governments have established is that, in a federation like Canada, you have to work together with provincial and territorial governments, and you have to work together with municipalities across the country. These issues are never easy. They're never fast.
The previous government and our government have set up programs and often taken a year or even three years—in the case of the previous government's infrastructure program announced in 2003—to negotiate framework agreements with every province and then to get projects going. Particularly, major projects don't turn on a dime. We're moving forward aggressively, for example, as a partner with the Spadina subway extension in Toronto, and the City of Toronto—the TTC—doesn't have the luxury of being able to have significant amounts of engineering work and design and environmental assessments all done before federal funding kicks in, because they simply don't have the financial flexibility to do that.
We have to deal with a lot of regulatory, legislative, and process issues. When the Prime Minister asked me to take on this position, one of the mandates he gave me was to speed up the process, because I don't think any of us—any provincial or territorial or municipal government—is satisfied with the speed with which infrastructure programs have worked, even over the last 25 years.
We are making record investments in infrastructure. One of the principal ways we do that is by providing a gas tax transfer directly to municipalities. We made that permanent in last year's budget, and those cheques are sent out twice annually to municipalities across the country, sometimes through the provincial government and sometimes through municipal associations, depending upon where you are in the country. That's very important, as is the GST rebate, which is another source of financial support that municipalities have to be able to count on in the long term. That is dealt with by the Department of National Revenue.
Those two constitute the majority of infrastructure spending. When it comes to the individual framework agreements we have with provinces, they have taken too long. They are too slow. They are too bureaucratic. And when the Prime Minister gave me these responsibilities he asked me not just to work with my officials but to speak to every single province, every single territory, and municipal leaders from across the country. We did that in December and concluded a final few in January.
I went out to every single provincial and territorial government and asked what the barriers were to things happening on infrastructure. We listened and we learned. We looked at the work that had been done by successive committees in the House of Commons. We got a lot of advice from the Federation of Canadian Municipalities. We got it from the Association of Municipalities of Ontario. In these infrastructure meetings around the country we invited municipal leaders to participate, and I think the process was stronger because of that.
We've come forward with a five-point action plan, which is the federal response to what we could do to speed these projects up. We're going to be proposing amendments to the Navigable Waters Protection Act. Everywhere we went there was virtual unanimity that we had to tackle this problem. One premier called it the biggest job-killer in his province, and we agree. We got unanimous consensus from all of the provincial and territorial leaders to make changes. Those are contained in the budget bill. They're in the budget bill because they're an important part of our national economic plan, and we believe we need to move expeditiously on it.
We looked also at the issue of regulatory reform. Every single province and territory that we spoke with asked, do we need one, two, three, four different types of environmental assessments? We need to protect the environment and we do that in different ways.
I was interested to learn that under the infrastructure program our government inherited, the overwhelming number today—before any changes are made—of environmental assessments preclude requiring any federal environmental assessment to take place. We'll give $20-odd billion for the transfers in the gas tax for infrastructure, and then the GST rebate, and there's not a single requirement whatsoever for any federal environmental assessment to take place in those direct transfers; neither is there in the base funding of our federal infrastructure program, which gives a base to every province, however big or small, to deal with.
We talked to all the premiers. I talked to premiers who are particularly well respected for their role on the environment: Gary Doer, Gordon Campbell, and Dalton McGuinty particularly. We said, could we not have one environmental assessment that could be done? The challenge is that if there is an infrastructure project all ready to go—“shovel-ready” is the common word—it can't go forward. It can't go forward because they don't have money, and the minute the federal government gives them one dollar, in today's regime, directly it triggers a full federal environmental assessment. That could delay the project for 18 months or two years, despite the fact that it's had a full environmental assessment at another level of government.
So we're making changes under existing legislative authorities for the next two years to fast-track these projects. I think that's a result of what we heard in our consultations. It's also an acknowledgement of the significant economic challenges we're facing.
We're also making changes to try to streamline consideration of issues under the Fisheries Act with my colleague the Minister of Fisheries and Oceans. We're looking at what we can do to have more direct consultations with first nations. If you're going to build a 300-kilometre highway, obviously that's a significant issue; if you're simply repaving a road at a $25,000 cost, that's a very different issue.
Finally, we're looking at what we can do to streamline the bureaucratic rule-making and red tape within government. Wayne Wouters, the Secretary of the Treasury Board, was reported to have given a speech recently in which he talked about the web of rules that has been built up by successive governments. Every time, under a Conservative or a Liberal government, in this country that there was a scandal, there were more and more rules placed on these projects, and they have almost strait-jacketed us.
None of the ones that we put forward in the Federal Accountability Act dealt with these, but when I was the President of the Treasury Board I appointed Frances Lankin, now the Honourable Frances Lankin, to head up a blue-ribbon task force on the web of rules and what we could do concerning grants and contributions, particularly in non-profit agencies, to make sure that we had important accountability measures in place but that we didn't measure accountability by the tonnage of paper used annually. They came forward with some significant positive recommendations for us, and we're looking at what we can do to reduce some of that red tape web of rules at Infrastructure Canada.
We're committed to doing our part to make things happen. Things have not happened fast enough. There is often a significant delay from the time we announce the project until the shovel goes in.
Finally, I'd highlight that one of the good financial administration practices brought in by the previous government, of which Mr. McCallum was a member, was that we have very tight money management policies. We don't give a $2 billion cheque out to someone if they're not ready to start putting a shovel in the ground.
For example, we're very proud to be supporters of the Spadina subway extension at Infrastructure Canada. We announced it two years ago. We didn't give them all the money up front because they weren't spending it. They're going to be putting the shovel in the ground shortly.
And we've come forward with a new policy to guarantee to municipalities and provinces that we'll pay invoices within 30 days. If there are specific requests for advance payments that will allow the project to go forward, we will entertain those and respond as expeditiously as possible.
That gives you a bit of an outline of where I see things standing, Mr. Chair. I particularly look forward to the well-respected questions from my colleague the member for Markham—Unionville.
