Public Accounts Committee on May 11th, 2021

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

What I can tell you, Ms. Gillis, is that in 2019, the federal government changed the criteria for the program.

Currently, the only sources of revenue for small municipalities are, for the most part, from gas taxes and municipal taxes.

The federal government is currently prioritizing remediation work, and the municipalities can't use the money they are rightfully owed for infrastructure work.

Are you aware of this problem?

[Kelly Gillis]

I can assure you that the federal government has not changed the criteria or their interpretation. It has not changed the agreement with Quebec.

Quebec has its own program, and it's within that program that the eligibility of certain types of projects has been changed. It wasn't the federal government that changed the agreement. Nothing has changed in the agreement that was reached with Quebec a few years ago.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Ms. Gillis, for the clarification.

Madam Chair, how much time do I have left?

[The Chair, Conservative, Kelly Block]

You have 35 seconds.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Ms. Hogan, I hope you can leave us on a positive note. How do you see things going forward?

Indeed, there were recommendations today. However, what can the committee do to help move things forward, despite what appears to be, in light of your report, an impasse?

[Karen Hogan]

I would encourage you to discuss ways to improve the management of horizontal programs.

This isn't just about infrastructure spending. As I mentioned previously, it's also about climate, biodiversity and indigenous services challenges.

So I would encourage the federal government to begin discussions to find better ways to manage horizontal projects.

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Blanchette-Joncas.

We will now go to Mr. Green for six minutes.

[Matthew Green, NDP, Hamilton Centre, ON]

I appreciated the previous questions coming from my friend from the Bloc, Maxims.

As some of you on committee know, I'm a former city councillor for Hamilton, and I recall the announcement—which is where some of my frustration comes from, quite frankly. I recall the announcement, particularly when it came to one-third/one-third/one-third funding. Big programs would be announced. That would raise the expectations of the residents, but then those would require willing partners in the province and the municipalities. As Mr. Blanchette-Joncas has so aptly described, municipalities, as you know, are able to raise revenues only through property taxes and building permits.

I'm going to take this moment just to—for the benefit of those watching and even for the members of this committee—ask Ms. Gillis to maybe explain the process. An announcement happens. What are the parameters around successful partnerships as they relate to municipalities in particular? As well, what would the typical timeline be from announcement to shovels in the ground, with the understanding that maybe some of these programs need to be, by requirement, shovel-ready?

[Kelly Gillis]

I'll give you examples of the different programs, because the process will differ depending on whether it is a provincial allocation program or it is merit-based or it is a transfer, like a gas tax.

I'll start with the gas tax, because it's the simplest. It's an allocation. The payment is made—and we've accelerated it for last year and this year so that one payment of $2.2 billion is flowed to the provinces and territories and that goes to about 3,600 municipalities across the country. There is no cost sharing. It's 100%. It pays for 100%. There are no applications.

[Matthew Green, NDP, Hamilton Centre, ON]

Can we pause for one moment on the gas tax? What are the parameters on the gas tax? What is the purpose of the gas tax, and what is the mandate for municipalities to spend this, to invest this money?

[Kelly Gillis]

The gas tax was the result of an agreement that was signed with the provinces and territories in 2014. It has 18 different categories of investment, so it's very broad. It can do sidewalks. It can do water. It can do connectivity. It's really the municipalities that prioritize its capital.

It's not operating, so there is a restriction there to prioritize infrastructure they need. It can pay for 100% of the projects. There is no cost-sharing requirement. No applications are required. There's reporting after the fact on what they've done, and it is audited after the fact. It isn't a project-by-project application, so it's quite flexible.

Also, they can save it, so if a smaller municipality wanted to do a big project the following year, they could save that money for the following year.

[Matthew Green, NDP, Hamilton Centre, ON]

My apologies, because I'm just trying to unpack this. You're going to have to explain it to me like I'm five.

Would there be a climate lens on the gas tax? If I recall, was there not an initial intention or spirit to use the gas tax to help with the transition to oppose carbon economy investments and things like transit?

[Kelly Gillis]

The types of eligible projects lend themselves very well to reducing emissions resiliency or adaptation, so water quality projects and transit projects would be included in the eligible types of projects.

[Matthew Green, NDP, Hamilton Centre, ON]

If we could pause there, has it not been the experience...? You're talking about municipal governments. You can give a municipality a hundred buses, but if there's no support for operations, municipalities will pass on this. In terms of transit, particularly investments in public transit, how often has it been the case or what is the uptake rate for municipalities to do capital investments in things like buses or LRTs and those types of things, absent supports from operational funding?

[Kelly Gillis]

Various provinces and municipalities prioritize. Again it's up to the municipalities to prioritize the types of projects they're bringing forward, but transit is one of the most popular types of eligible investments with the gas tax, as well as other.... They can do bus stops. They can do a number of different capital investments that are required for municipalities. Certainly, when I'm talking with city managers, this is a program they very much appreciate, given the flexibility and the certainty it provides for their capital plans.

[Matthew Green, NDP, Hamilton Centre, ON]

Has there ever been any conversation about providing a small ratio of support for operationals on it?

[Kelly Gillis]

Operating is a different particular challenge. Infrastructure Canada, in all its programming, does not support operating. It really is about infrastructure, supporting the capital investments needed in communities across the country.

[Matthew Green, NDP, Hamilton Centre, ON]

Are there any opportunities for potential partnerships horizontally, to use the buzzword of the day, between Infrastructure and Transport or Climate Change or one of these other ministries, which may have an interest in a mandate? We're both 15 minutes away from what could be an announcement: I'm just finding out locally in my city, with a project like LRT—which has been probably 15 years in the making, wrangling back and forth with the province—that the feds are now potentially coming on board to support the project. I spent four years fighting in Hamilton Centre for light rail transit, fighting to keep it public so it wasn't privatized. Significant monies were invested by the municipality. The feds come along and make an announcement today. What would that timeline look like potentially?

[Kelly Gillis]

I'll move to another type of program where we're looking at the timelines involved, like our integrated bilateral agreements. The integrated bilateral agreements are signed, and the provinces and territories themselves then determine their own cost-sharing opportunities, because they can range.

I'll talk about the COVID stream. We've just adjusted the integrated bilateral agreements to allow for projects that are relevant and important now that we're living with COVID, like HVAC in schools and long-term care in hospitals. For that particular stream, we pay 80% of the funds, so there's a 20% cost sharing on the other side, yet we approve the projects that come in within 20 working days, and so far almost 2,000 projects and almost $2 billion have been approved just since last October. Then it's up to—

[Matthew Green, NDP, Hamilton Centre, ON]

Here's to looking for some good news, hopefully at one o'clock.

Thank you.

[The Chair, Conservative, Kelly Block]

Thank you very much.

Colleagues, we'll now go to our next round of questioning, which is a five-minute round, starting with Mr. Webber.

[Len Webber, Conservative, Calgary Confederation, AB]

Thank you, Madam Chair.

Thank you to all the witnesses here today, and to my colleagues for their great questions.

Ms. Fox, in my previous role in provincial politics, I had the honour and the pleasure of working with treaties 6, 7 and 8 as the indigenous relations minister. I worked with many wonderful people in those communities.

Now, moving to federal politics, I find, Ms. Fox, you've been here many times and I find your presence here and your information very interesting. I want to focus on some comments you made today. You said:

To ensure transparency and results, a robust reporting process has been implemented, allowing both Indigenous Services Canada and Crown-Indigenous Relations and Northern Affairs Canada to provide regular updates on their overall portfolio of infrastructure projects in first nations communities.

I know this is going along the same line as Mr. Longfield earlier, but he didn't have time to get an answer. I'm hoping to get some clarification on that. You talked about a robust reporting process that has been implemented, yet you went on to say that you are committed to supporting first nations in realizing their vision of self-determination, and to respecting their autonomy by seeking opportunities to reduce reporting requirements by first nations.

First you're saying you're going to have a robust reporting period, and then you're saying you're going to reduce reporting. Can you give me some clarification there, please?

[Christiane Fox]

Absolutely. I would say it in the following way.

What we're trying to achieve as a department is getting the right balance between a reporting structure that allows us to have that open and transparent approach, while understanding that there needs to be a balance, given the level of capacity. As you know, the federal government has multiple departments; it's a big machine. We have to think about the reporting requirements from our partners' perspective.

I'll give you the example of the legacy programs. Over time, we have programs that are very much under the investment in Canada plan, and then we have these legacy programs that date back to before that. Much of that money is actually A-base funding; therefore, communities can use it for utility bills and salaries. If we started asking them to report on the details of that, we would lose sight of the importance of getting the detail around the project itself. We try to limit the burden while still being open and transparent to Canadians by posting our information online.

For example, if we want to look at health infrastructure across indigenous communities, we can say that we have 210 health-related infrastructure projects, 200 that are complete and 10 that are ongoing. We can talk about the health facilities and where we stand, with 49 projects under way. It's to get to the level of detail that helps us identify the priorities, better understand the gaps that still exist, and then work towards that versus reporting on the very small details, which frankly is quite burdensome for communities and doesn't really fit the objective of that openness and transparency. That's the nuance we're really trying to achieve here.

The water website, the infrastructure websites and the map where you can zone in on communities are helpful for us, for Canadians and for communities.

The last point I would make to answer your question would be around how we as a federal system can look at community needs through their lens, and not necessarily that we have a myriad programs. How can we engage directly with communities and ask what they would prioritize and how they would see that?

When I have conversations with indigenous leaders, they'll tell me that first they built their health infrastructure, but then because there was a new health facility, they could actually attract economic development. A mine might set up because now there's a health facility, and with that might come additional connectivity.

We have to have that conversation through a community lens versus our programming lens.

Does that answer your question?

[Len Webber, Conservative, Calgary Confederation, AB]

It does, and I have four more seconds.

Thank you, Ms. Fox, for that.

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Webber.

We will now go to our last questioner of the day.

Mr. Sorbara, you have five minutes.