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Evidence of meeting #3 for Government Operations and Estimates in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was infrastructure.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Karen Wilson  Assistant Chief Statistician, National Accounts and Analytical Studies Field, Statistics Canada
Marilyn MacPherson  Assistant Deputy Minister, Corporate Services Branch, Privy Council Office
Stephen Richardson  Associate Deputy Minister, Department of Finance
Michel Girard  Director, Industry Accounts Division, Statistics Canada
Paul Rochon  Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
Simon Kennedy  Deputy Secretary to the Cabinet, Plans and Consultation, Privy Council Office

Noon

Liberal

Martha Hall Findlay Liberal Willowdale, ON

That's interesting news.

Do I have time for a quick question?

Noon

Liberal

The Chair Liberal Derek Lee

No. You're way over. I'm sorry, but we'll get back to you.

Monsieur Roy for five minutes.

February 10th, 2009 / 12:05 p.m.

Bloc

Jean-Yves Roy Bloc Haute-Gaspésie—La Mitis—Matane—Matapédia, QC

Thank you, Mr. Chair.

I have the same question because I was the mayor of a municipality for a long time. I do not think that a single provincial government is going to come up with 50% of the cost so that an infrastructure program can get underway. If the federal government is providing 50%, I do not see many provincial governments also coming up with 50% to get to 100%.

This question goes to the Statistics Canada representatives and I will come back to the Department of Finance shortly. I would like to know if you already have a study on the debt level of municipalities in Canada and on the municipalities' ability to take on a new infrastructure program that requires them to go even deeper into debt.

12:05 p.m.

Assistant Chief Statistician, National Accounts and Analytical Studies Field, Statistics Canada

Karen Wilson

We do have statistics on municipal debt. It's not provided at the individual municipal level, but by province.

12:05 p.m.

Bloc

Jean-Yves Roy Bloc Haute-Gaspésie—La Mitis—Matane—Matapédia, QC

Can you give me an idea for all cities and municipalities in Canada? Do you have a figure in mind now?

12:05 p.m.

Assistant Chief Statistician, National Accounts and Analytical Studies Field, Statistics Canada

Karen Wilson

Not here, no. I have not even analyzed all the statistics.

12:05 p.m.

Bloc

Jean-Yves Roy Bloc Haute-Gaspésie—La Mitis—Matane—Matapédia, QC

I can still continue with my question. In most cases when a municipality's debt level is too high, it is impossible to pass a loan by-law without the agreement of the Ministry of Municipal Affairs, without the province, and the municipality will not get that agreement to become involved in the infrastructure program, even for 15%, when its debt level is too high. Currently, there is a serious problem at municipal level, even in large cities. I could mention Toronto and Montreal, which probably have the highest level of debt of all municipalities and which will find it extremely difficult to find funds to invest in the infrastructure program. You are now telling us that no agreement is in place, no negotiations are underway, nothing that gives us any reason to feel that cities like Montreal and Toronto, or even small municipalities, could make any investment. Especially since we are in an extremely serious credit crisis that makes it very difficult for towns to borrow.

12:05 p.m.

Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance

Paul Rochon

I can answer. As to the provinces' budgetary position, they have a lower level of debt than the federal government.

12:05 p.m.

Bloc

Jean-Yves Roy Bloc Haute-Gaspésie—La Mitis—Matane—Matapédia, QC

I am not talking about the provinces, I am talking about municipalities and cities.

12:05 p.m.

Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance

Paul Rochon

I do not have those figures at hand, but I think that if we looked at the municipalities' debt levels, it is not very high, because, you are right, they can only borrow for capital projects. If you take provinces and municipalities together, their debt level is lower than the federal government. They have about the same amount of revenue as the federal government. They have more or less the same tax base. There is no reason in principle for provinces not to be able to approve the funds required for infrastructure projects, just like the federal government.

12:05 p.m.

Bloc

Jean-Yves Roy Bloc Haute-Gaspésie—La Mitis—Matane—Matapédia, QC

That more or less answers my question, since you do not have the figures with you.

I have another question about the federal government's program. In the past, we have seen it take for ever to spend the funds. Not only did it take for ever, it took just as long to negotiate with provincial governments. The federal government has its requirements, the provincial government has requirements of their own and so do municipalities. Are negotiations underway? Does the federal government have a coordinating committee, perhaps in the Privy Council Office, to make sure, once the measures are announced, that the process is going to be speeded up, that negotiations are going to take place and that we are not going to get hung up with dotting i's and crossing t's, as the Premier of Quebec said not so long ago? In Quebec, they were saying that money had been announced but not spent because people were hung up dotting i's and crossing t's. This is no time for those kinds of hang-ups. This is a real crisis. Will there be a more transparent coordinating committee that will let us know how things are going?

12:10 p.m.

Associate Deputy Minister, Department of Finance

Stephen Richardson

A number of steps are being taken to try to ensure that this money, which has been provided for in the budget, and in particular for infrastructure, will be available on the most efficient basis. Of course one of the things the government has to do in providing this money is to ensure that there is appropriate responsibility and accountability for decisions and that in providing money more rapidly, appropriate controls are still respected. Having said that, a number of these steps should lead to a number of things happening faster than they have in the past.

I'd note again that in order not to have to wait for appropriations through the regular supply process, a number of these funds will be appropriated through Bill C-10. Also, the Treasury Board Secretariat of Canada will be making arrangements to try to process funding decisions on an expedited basis. In addition, as we mentioned, Infrastructure Canada, which is responsible for much of the infrastructure funding, has already been in discussions with provinces. It has been actually identifying specific projects and analyzing these projects ahead of time. There will be an interdepartmental committee within the government that will review on a regular basis the progress of making this funding available.

I'd also note that some of the substantive policy decisions in the infrastructure initiatives will assist in making funding available and getting funding out more quickly. For example, to the extent that infrastructure funding is being provided for repairs and renovations, this can happen a lot faster than when very large new projects are being done. That is one of the reasons that approach was taken with a number of the infrastructure initiatives in the budget.

12:10 p.m.

Liberal

The Chair Liberal Derek Lee

Thank you, Mr. Roy.

Mr. Brown, for five minutes.

12:10 p.m.

Conservative

Patrick Brown Conservative Barrie, ON

Thank you, Mr. Chair.

I want to follow up on a few of the questions to our finance department officials. I am concerned that some of the questions might have obscured some of the successes of this economic stimulus. I notice that a lot of the people cheering from the sidelines and watching the budget were from our municipalities. To hear this complaint that municipalities are going to have to contribute a cost I think misrepresents what's occurred in Canada over the last twenty years.

My first question is about infrastructure programs. In the 1990s, when we had a slowdown, and more recently under the previous Liberal government, we had infrastructure programs. Was it not a staple arrangement for federal infrastructure investments that there'd be other governments involved--municipal and provincial?

12:10 p.m.

Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance

Paul Rochon

You're correct, for the most part. Past and current infrastructure programs require some funding, but not entirely. For example, the gas tax transfer is not shared or matched, if you will, and that hasn't been changed at all.

12:15 p.m.

Conservative

Patrick Brown Conservative Barrie, ON

But in terms of specific one-time infrastructure projects, it has been the practice that there are cost contributions from other levels of government.

12:15 p.m.

Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance

Paul Rochon

Yes, for the most part. One of the important rationales behind that is that this is not federal infrastructure; it tends to be provincial or municipal.

12:15 p.m.

Conservative

Patrick Brown Conservative Barrie, ON

I appreciate that clarification, because to suggest otherwise I think misrepresents the success of this endeavour to help Canadian cities. This is a tremendous infrastructure investment. This $12 billion is the largest investment in infrastructure on a one-time basis in Canadian history. I think it's something municipalities are excited about, and they are certainly eager to take up the offer.

The challenge in past infrastructure programs has not been municipalities' unwillingness to partake in these; too many have been ready to. There are usually two to three times the number of applications as there are funds. So the question was how to handle this, and the answer was to invest more money in it, not to make a statement that municipalities weren't interested in cost-sharing. I think it is unfortunately a way to obscure the success of this stimulus. I think there's going to be tremendous interest among municipalities to be involved in this, and I'm excited about the projects that will be undertaken.

On the topic of this low-interest financing, that was dismissed as well, and I thought it was important to note that this, from what I understand, came out of a resolution proposed by municipal councillors at the most recent Federation of Canadian Municipalities conference. Could you comment on where that originated? Is my understanding correct that this was proposed by municipal councillors?

12:15 p.m.

Associate Deputy Minister, Department of Finance

Stephen Richardson

Yes. I can't verify whether it came out of that particular source, but I can say that the provision of the $2 billion line of financing through CMHC is a very important potential new source of low-cost funding for municipalities and that there's been a very positive reaction to that from the municipalities.

12:15 p.m.

Conservative

Patrick Brown Conservative Barrie, ON

I looked at a project in my riding at the water pollution centre, and 20% of the cost was in the interest payments. I think the fact that it came out of Quebec City at the FCM conference is another example of how municipalities are getting the infrastructure partner they had hoped for.

There have been a lot of exciting items in this economic stimulus. Could you touch a little more on the support for energy retrofits in terms of...? Is that the continuation of the program, or is anything new being added under that envelope or that $7.8 billion to stimulate housing construction?

12:15 p.m.

Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance

Paul Rochon

Yes, the funding for the program is being increased. I don't have the numbers right in front of me, but as I recall, it is by about $150 million a year over two years. It is probably worth pointing out that one can claim both the renovation tax credit and make use of this program at the same time, so they are complementary.

12:15 p.m.

Conservative

Patrick Brown Conservative Barrie, ON

It's another terrific program.

Another comment I wanted to--

12:15 p.m.

Liberal

The Chair Liberal Derek Lee

Mr. Brown, you're a great cheerleader. We've hit five minutes, but if you want to make it ten seconds--

12:15 p.m.

Conservative

Patrick Brown Conservative Barrie, ON

Yes, a quick one?

12:15 p.m.

Liberal

The Chair Liberal Derek Lee

Sure, if it's in line with your current line, yes.