Chair of the committee Tweed, Vice-Chairs Laframboise and Volpe, ladies and gentlemen members of the committee, the Union des municipalités du Québec eagerly accepted your invitation to take part in the committee's work regarding the impact of the March 31, 2011 deadline set by the government for the completion of infrastructure stimulus projects. This is an issue for all municipalities in Quebec, and particularly for members of the Union of Quebec Municipalities.
The UMQ represents municipalities of all sizes in every region of Quebec. Its mandate is to promote the fundamental role of municipalities in enhancing social and economic progress across the province, and to support its members in building democratic, innovative and competitive living environments. More than 5 million Quebeckers are represented by the UMQ.
For Quebec municipalities, the pressures caused by the deadline have been made worse as a result of several factors, including the lengthy negotiations between the federal and provincial governments, which meant that measures were really only put in place several months after the announcement. This had the effect of slowing down municipal processes which must go forward before any work can begin.
In addition, municipal elections held in November of 2009 all across Quebec also slowed the pace at which projects got underway. Almost 50% of city and town halls saw changes to their elected officials, something which had a major impact.
Finally, Quebec municipalities have to deal with harsh winters, which means that there is no construction work being done between the end of November and the end of March under the Water and Wastewater Pipeline Renewal Program, or PRECO.
Taken together, these factors have resulted in increased pressures on Quebec municipalities as a result of schedules being shortened. Despite that, the municipalities have acted quickly and diligently to respond to requests from governments.
As we were frequently reminded by ministers of both the Government of Canada and the Government of Quebec, without quick action by municipalities to get major infrastructure projects underway, the effects of the economic crisis would have been far worse. We hope this partnership will continue.
Municipalities are currently doing everything possible to meet the tight deadline that has been imposed, which means important concessions on their part.
The City of Laval, for example, has stepped up the pace of its work to renew water and wastewater pipelines. In 2010, we are planning to carry out all the work approved under the PRECO, which represents an investment of almost $45 million. However, factors beyond our control may result in part of the work not being completed on time.
Furthermore, engineering principles recommend that paving work be done in two stages, with a period of freezing/unfreezing between the first and second layers, in order to ensure a longer life. This standard cannot be followed if the deadline of December 31, 2010 is to be met.
However, the City of Laval is certainly not the only city to be facing these challenges and the work done by municipalities across Quebec is worthy of mention. That is the case for Sainte-Marie, Beauce, which has been commended for its efforts by elected members from the region, both federal and provincial.
In that specific case, the municipality only has 12 months to carry out work that would normally take almost twice as long. Despite the fact that it will not be able to meet the March 31, 2011 deadline, Sainte-Marie began work last March on the construction of a sports and multi-purpose complex at a cost of $28 million. It is doing so in order to meet the pressing needs of its residents.
Moreover, in spite of the diligence they have demonstrated, municipalities have to contend with an administrative process that always extends over many months. For example, for a relatively simple project submitted on January 29, 2010, the deadline for committing projects under the stimulus measures, the municipal process will result in the work only beginning five or six months later, around the month of July or August, depending on contingencies.
First of all, at the same time that it proposes a project, the municipality moves forward with approval of its borrowing by-law, which takes approximately three months. In the meantime, the municipality will have received approval for the project from the Ministère des Affaires municipales, des Régions et de l'Occupation du territoire.
This year, because of the large number of projects that came forward in January of 2010, most municipalities only received their memorandum of understanding in March, almost two months after submitting their project. Very often, it is only once that confirmation has been received that a municipality will begin preparing plans and estimates, something that may take two to three months, which brings us to the month of April. Once the plans have been completed and the borrowing by-law has been authorized, the municipality issues a call for tenders and examines the bids approximately one month later, in June.
Based on this accelerated process, and assuming that the bids come in within the budget set by the municipality, it will only be possible to begin work in July, at the earliest. In the specific case of street infrastructure work funded through the PRECO, the deadline for the completion of work is December 31, 2010. Because the month of December is automatically out of the question because of the weather, that leaves only four or five months for the municipality to carry out its programming, whatever the magnitude of its projects.
This process, which is critical for proper municipal management, demonstrates the extent to which this deadline is simply unrealistic in a great many cases. It may result in higher construction costs than the municipalities will ultimately be in a position to absorb on their own. As was recently mentioned by Mr. Dany Lachance, President of the Quebec Municipal Engineers Association, imposing time constraints on a contractor generally results in higher costs. Without a deadline, no such constraint exists.
The Municipality of Matane experienced this with respect to its project to upgrade the local arena when it had to shorten the work schedule from 16 to 10 months in order to meet the deadline. The compressed timeline resulted in increased project costs of approximately $1.7 million which it absorbed on its own, by passing a second borrowing by-law.
The other issue that the Union des municipalités du Québec would like to draw attention to today is the fact that many municipalities which have already begun this work may not be able to meet the March 31, 2011 deadline. That would mean they would be forced to incur 100% of the costs of all work completed after the deadline. I'm sure you will agree with me that this is contrary to the spirit of the partnership between governments and municipalities. This is a situation that several municipalities will face.
I would like to give you another example, because an example is worth a thousand words. The City of Saint-Hyacinthe has just begun construction work on a recreational/tourist complex. Initially, in 2006, this was expected to cost $24 million. Since then, the City has lowered the cost to $16 million, with a view to meeting the deadline. It went even further, by dividing the project into separate work packages in order to speed things up. According to estimates on March 21, 2011, only about 60% of the work is likely to have been completed, leaving the Municipality of Saint-Hyacinthe with a bill of about $4 million that it will have to pay on its own.
The examples I have given of projects that are already underway through the stimulus funding are not the rule, however, because several municipalities are not able to run the risk of having to take on such a heavy financial burden. That is the case for the Municipality of La Pocatière, which has a population of less than 5,000. Faced with the possibility of not being able to complete the work in time, it decided to abandon a $600,000 project under the PRECO to upgrade its water and wastewater pipelines, and believe me, it is in dire need of that work. Yet the project was approved by both levels of government. The municipality has assured us, however, that were the federal government to show some flexibility regarding the deadline for completing the work, it would roll up its sleeves and get the work done, because it is very important that the project be completed.
Although the March 31, 2011 deadline seems far away, municipalities are now having to make decisions, and it is now that they are in need of greater flexibility on the part of the federal government. All across Quebec, there are examples like the Municipality of La Pocatière. That illustrates the fact that, despite the monies earmarked for these economic measures having been committed—more than $1 billion for Quebec—many projects will not go ahead, meaning that much of the stimulus money will remain unused.
In summary, the UMQ would like to remind members that factors such as the slow negotiations between Ottawa and Quebec, the provincial elections, and weather are totally beyond the control of municipalities. And yet, in the context of infrastructure stimulus projects, they are nonetheless suffering the consequences, as an unrealistic deadline is being imposed.
Municipalities which are unable to change or even cancel large-scale projects that improve residents' quality of life will therefore have to take full responsibility for all costs incurred after the deadline. That is contrary to the spirit of a partnership between governments and municipalities.
In closing, the UMQ is asking the federal government to demonstrate some flexibility in this regard and allow municipalities which have already begun construction work to complete it after the December 31, 2010 or December 31, 2011 deadlines, so as to fully benefit from the federal government's financial contribution.
Thank you for your attention. I am now ready to take your questions.
