Thank you, Madam Chair.
Members of the committee, the Union of Quebec Municipalities was eager to accept the invitation to take part in your deliberations regarding the implementation of economic stimulus measures, because this is a question of crucial importance to its members.
The President of the Union, and Mayor of Maniwaki, Robert Coulombe, has asked me to represent him, as he was unable to be here today. He asks that I convey his greetings.
The UMQ represents municipalities of every size and in every region of Quebec. Its mission is to promote the fundamental role of municipalities in the social and economic progress of Quebec as a whole and to support its members in building democratic, innovative and competitive communities. More than 5 million Quebeckers are represented by the Union of Municipalities.
For several years, the Union has been calling for massing spending by governments to make up the deficit in municipal infrastructure.
At the request of the UMQ, the Conference Board of Canada did a study on municipalities' fiscal situation and the hidden infrastructure deficit. The findings were clear: the deplorable state of municipal infrastructure in Quebec is the result of underfunding since the 1970s; the infrastructure deficit in 2003 was estimated at $18 billion, or $1 billion per year for the next 15 years.
Since then, the UMQ's voice has been heard, and major efforts have been made by all levels of government to rehabilitate municipal infrastructure. The federal government's economic action plan has been implemented to rapidly stimulate the economy in the global financial crisis and the economic recession. It has added to existing programs by targeting projects that can be carried out between now and March 31, 2011.
Our reading of the current situation as it relates to implementing economic stimulus measures for municipal infrastructure has resulted in the following observations and recommendations.
In Quebec there are hundreds of projects underway, illustrating the positive effect of the plan. However, there are many projects still waiting for approval before they can start up.
Some delays can be explained by the discrepancies between the priorities of the various levels of government. It is sometimes difficult for a project to reflect both federal and provincial intentions.
Greater consistency between provincial and federal considerations is needed for each program. It would be preferable to agree on common priorities that projects will have to meet in order to facilitate approval, and ultimately implementation.
For example, the agreement between the federal and provincial governments on the Green Infrastructure Fund has not yet been signed. In the meantime, projects have to continue to fit into the requirements of each government and start-up is delayed.
The Union believes that the gas tax transfer program is an example that should be followed. It enables municipalities to do long-term revenue planning and offers them the flexibility they need in order to adapt better to their circumstances.
The UMQ would also like to see greater flexibility in the program criteria to enable municipalities to meet the needs of their own communities.
For example, socioeconomic infrastructure projects could be made eligible.
In addition, infrastructure projects require municipalities to invest a significant minimum amount, up to one third of total spending. But the fact is that municipalities do not have new sources of revenue to fund that contribution.
Property taxes are still the main source of revenue for Quebec municipalities. In addition, for every dollar invested in infrastructure, and funded equally by the three levels of government, Quebec City and Ottawa share $0.35 in direct tax refunds, while municipalities receive zero.
At present, for a $100 million investment, Ottawa gets a refund of $18 million, Quebec City gets $17 million, and the municipalities get zero.
That is why the Union would like to see a little more flexibility in the programs, to recognize municipalities' ability to pay.
The Union would also like to see investment maintained at a constant level, to allow us to move ahead with rehabilitating our infrastructure. It would therefore be desirable to ensure that programs like Building Canada are permanent.
The UMQ is also concerned about the current status of public finances and believes it is imperative that the budget is not balanced on the backs of municipalities.
On May 15, at the UMQ annual convention in Gatineau, the members of its executive committee had discussions with the Rt. Hon. Stephen Harper, Prime Minister of Canada, and with Michael Ignatieff, the leader of the official opposition, and Gilles Duceppe, the leader of the Bloc Québécois, regarding the importance of maintaining and speeding up investments in municipal infrastructure and working in close cooperation with Quebec to secure economic prosperity for our province and for Canada.
The return of Parliament led to debates about the federal government's plan to balance the budget. This is a major issue, one that is of the utmost concern to municipal leaders. Given this situation, the members of the UMQ board of directors unanimously adopted a resolution on September 18 calling on the leaders of the federal parties to make a formal commitment that any plan to balance the budget would rule out postponing the funding allocated to infrastructure projects and preserve the other gains that have been made, such as the GST refund and a permanent gasoline tax.
They are also calling for a firm commitment from the federal political parties to make infrastructure programs permanent so that we can continue to catch up on the needed rehabilitation of municipal infrastructure. The strategy of balancing government budgets cannot be pursued on the backs of municipalities without directly affecting services to the public and the quality of the infrastructure.
In conclusion, Quebec municipalities are key economic actors and partners. Every year they inject $11.5 billion into the Quebec economy. Investing in infrastructure will mean an environment for the public and business that will support sustainable development. In terms of infrastructure alone, they invest $2.7 billion dollars every year, and they will invest an additional $2.5 billion over five years in contributions to the new programs.
Municipalities want to support economic growth and job creation by investing their share in infrastructure programs. Stable funding, permanent programs and greater flexibility in program terms and conditions will enable them to do their full share as engines of socioeconomic development in their communities.
Thank you for your attention.