Evidence of meeting #24 for Transport, Infrastructure and Communities in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was projects.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Harry Nyce  President, Union of British Columbia Municipalities
Hans Cunningham  President, Federation of Canadian Municipalities; and Director for the Regional District Central Kootenay, British Columbia
Brock Carlton  Chief Executive Officer, Federation of Canadian Municipalities
Gary MacIsaac  Executive Director, Union of British Columbia Municipalities
Barbara Steele  First Vice-President, Union of British Columbia Municipalities
Michael Buda  Director of Policy, Federation of Canadian Municipalities

9 a.m.

Conservative

The Chair Conservative Merv Tweed

Good morning, everyone.

Welcome to the Standing Committee on Transport, Infrastructure and Communities, meeting number 24.

Pursuant to Standing Order 108(2), we are doing a study of the impact of the government's deadlines of March 31, 2011, for infrastructure stimulus projects, and of December 31, 2010, for the completion of projects under the recreational infrastructure Canada program, RinC, and the water and waste water pipeline renewal program, PRECO.

Joining us today, representing the Union of British Columbia Municipalities, is Mr. Harry Nyce, president; Barbara Steele, first vice-president; and Gary MacIsaac, executive director.

Also, from the Federation of Canadian Municipalities we have Hans Cunningham, president, who is director for the Regional District of Central Kootenay, British Columbia; Brock Carlton, chief executive officer; and Michael Buda, director of policy.

Welcome. I know some of you have been here before. Basically, the floor is open for 10 minutes for presentations; then we'll move to questions and answers from the committee.

I understand, Mr. Nyce, you're going to start us off.

Please proceed.

9 a.m.

Harry Nyce President, Union of British Columbia Municipalities

Thank you.

Good morning, honourable members. My name is Harry Nyce. I am president of the Union of B.C. Municipalities. I'm joined here today by Barbara Steele, first vice-president, from Surrey, and Gary MacIsaac, who is the executive director for UBCM.

UBCM is an advocacy organization that acts on behalf of local governments in British Columbia. Membership of UBCM is voluntary, but we are proud to say that all municipalities and regional districts in B.C. are members of UBCM.

In preparing for this submission, we were instructed to provide examples of situations facing local governments in British Columbia. We will do so, presenting several instances today.

First of all, we wish to state that the commitments made by the federal government to local government infrastructure in the 2009 budget were substantive and welcomed by the communities of British Columbia. The stimulus funding programs are proving to be successful. For many years, local governments have made the case that there is a need for all governments to work together to renew and expand community infrastructure. We believe there are some localized issues with respect to the March 31, 2011, deadline that are best dealt with on a case-by-case basis in an administrative manner, rather than by wholesale program change.

In preparation for this submission, we surveyed our membership. In every instance, the survey respondents indicated that they are working towards completing projects in advance of the deadline; however, there are some instances in which certain concerns have been voiced about the March 31 deadline.

As you consider the impact of the deadline for these programs, we would ask that you do so in consideration of another date: when the funding decisions were made. The rollout of the infrastructure stimulus fund and the Building Canada community top-up fund was slower in British Columbia than in most other provinces. We understand that as soon as funding announcements in most other provinces and territories were made, in late spring or early summer of 2009, they were in effect allowed two construction seasons to complete the projects. This did not happen in British Columbia. The vast majority of announcements involving local governments did not occur until the end of September 2009.

The principal reason for the delay was that there was a provincial election in May of 2009 and a need for the newly elected government to bring forward a budget update, which was not introduced until September 1, 2009. Not all of the British Columbia approvals were announced in September. Some were later.

Let's take a look for a minute at Metro Vancouver, with a population of 2.3 million. In Metro Vancouver's case, funding for Annacis Island Centre for Excellence was not announced until January 2010. This is despite the fact that their application was submitted early in 2009. The project was indeed shovel-ready when it was submitted early in 2009, but almost a full year passed before it was approved.

Metro Vancouver has reported that while they plan to substantially complete construction for the $9 million centre by the deadline, they are aware that the short timeline allows no room for any delays.

Our most important message to you, the committee, as you consider the March 31, 2011, construction deadline is that the late announcement of funding decisions effectively limited the period of construction for these projects to a single season. In many communities, the construction season is April to October, with key suppliers such as asphalt plants closing operation in mid fall and opening in spring. So while the funding announcements in B.C. might have been four months later than in other parts of the country, some communities effectively lost a year when you consider that we lost a full construction season.

To offset the challenges resulting from the late announcements, some local governments are taking aggressive steps to implement projects.

Let us take the District of Chetwynd, for instance. Chetwynd is a municipality of 3,000 residents in the Peace River region of northeastern British Colombia. In their case, they decided to award a construction contract to implement a communities component top-up storm drainage project in advance of securing a signed agreement with the funding partners. While the grant had been announced, and verbal commitments in relation to the funding agreements were given, the decision to award the construction contract was not without risk for the municipality, a risk that Chetwynd was willing to take to ensure the project could be completed by the deadline. Chetwynd comments that it simply would not be possible to have completed the full scale of the project in the timeframe allotted had they not taken this extraordinary step.

We provide the District of Chetwynd as an example to show the commitment of B.C. local governments to meeting the March 31, 2011, deadline. Other local governments also reported fast-tracking various parts of their projects to do everything possible to ensure they could meet the construction deadline. This was a common response to our survey.

However, we all know that despite best efforts, unexpected events and delays do occur. Many of these were outside of the direct control of the local governments. We think there needs to be a level of flexibility around the March 31 deadline on a case-by-case basis. We will provide a couple of examples of the need for this flexibility.

When it comes to managing local government infrastructure projects, there are many aspects of the process that lie outside a local government's scope of power or authority. As projects move through the design, engineering, and construction stages, federal and provincial bodies play a vital regulatory role.

Most of these projects involve approvals from multiple regulating entities, including everything from approval of work plans, to environmental assessments, to a host of permitting requirements. Consider the case of the city of Kamloops, a city of 86,000 in the Thompson Nicola area of south central B.C. The city received approval for the Westsyde riverbank protection under the Building Canada fund's communities component.

An environmental assessment is required for the project, and the city began preparing the environmental assessment document months ago. One of the components of the document was an archeological overview assessment to be provided by the Kamloops Indian Band. As of last week, the archeological assessment had not been completed, which means the city's environmental assessment document remains incomplete and the project cannot proceed.

Kamloops is working to meet the expectations of the Department of Fisheries and Oceans, which requires that the construction occur within the limited timeframe due to fish habitat constraints. If the timeframe is missed due to the issues associated with the environmental assessment, the project could potentially be delayed until the next appropriate window, which will likely be some time next year. This would mean that Kamloops would not meet the March 31, 2011, deadline.

There are a number of examples of situations in which the regulatory process can delay a project. These delays are often out of the hands of the local government, and indeed may be out of the hands of the regulatory agencies, particularly where several approvals from multiple agencies are required.

Some of our members, particularly in the northern, rural, and remote regions, are experiencing delays due to shortages of material, qualified workers, and professionals. A good example of this is a project under construction in Tumbler Ridge. The District of Tumbler Ridge is located in northeastern British Columbia, 1,200 kilometres from Vancouver. It received funding to upgrade its recreation centre under the recreational Infrastructure Canada program.

The panelling specified for the project is a new, high-energy-efficient product, carried by only three suppliers. The product is popular due to its energy efficiency, and the suppliers are unable to keep up with demand, resulting in delivery delays. In the case of this project, delivery has delayed the project by about six weeks.

Tumbler Ridge is also experiencing a shortage of qualified professionals and has experienced lags of up to a month to obtain approvals from structural engineers at critical points in the construction process. This problem is exacerbated by the limited number of contractors in the area, since their work must be coordinated with that of the engineering professionals.

While these delays may seem minor, they must be considered in the context of a construction season that is extremely short. A delay of even a month or two will mean that construction cannot be completed before winter sets in, delaying further construction until late March 2011.

As stated earlier, we are not recommending an overhaul of stimulus programs that by and large are working well. Instead we believe there may be opportunities to provide some flexibility around the March 31, 2011, deadline, on a case-by-case basis, while maintaining Canada's objectives for the program. Two specific ideas to provide this flexibility relate to claims management and an integrated management approach for regular and top-up communities component funding. Claims could be managed by using the federal portion of the grant towards costs incurred prior to March 31, 2011, and for those projects that are not fully complete at that date, withholding provincial funding pending project completion. Integrated management of the regular and top-up funding would provide an opportunity to recognize any communities component project completed by March 31, 2011, as a stimulus project.

While we have shown some examples of top-up projects that are behind schedule, there are examples of regular communities components that are ahead of schedule and will be complete prior to the March 2011 deadline. Integrating the management of both programs would provide the needed flexibility to designate any project completed by March 31, 2011, as a stimulus project.

As we have indicated throughout this presentation, we are not seeking an across-the-board extension of the March 31 deadline. However, as these examples show, there are circumstances where local governments have acted in good faith but are threatened with circumstances beyond their control. In these instances, we would like to see administrative flexibility to address these projects on an individual basis.

I thank you for this opportunity, Mr. Chairman and honourable members.

9:10 a.m.

Conservative

The Chair Conservative Merv Tweed

Thank you very much.

We have a second presentation.

June 15th, 2010 / 9:10 a.m.

Hans Cunningham President, Federation of Canadian Municipalities; and Director for the Regional District Central Kootenay, British Columbia

Thank you, Mr. Chair and members of the committee.

Before I start, I'd like to thank and recognize UBCM, one of our provincial association partners, for joining us today to provide details from the front lines in B.C.

I have with me our CEO, Mr. Brock Carlton, and Mr. Mike Buda, our policy advisor. They are here to help answer any technical questions. As well, Mr. Carlton will provide some comments in French as part of our presentation.

I'm pleased to be here to talk about Canada's economic action plan and the importance of building strong cities and communities.

I'd like to ask Mr. Carlton to start our presentation with a bit of background.

9:15 a.m.

Brock Carlton Chief Executive Officer, Federation of Canadian Municipalities

Thank you, Hans.

The FCM has been the national voice of municipal government since 1901. We represent 90 per cent of the Canadian population in more than 1,900 municipalities in every province and territory. Members include Canada's largest cities, small urban and rural communities, and 18 provincial and territorial municipal associations, like our friends in British Columbia.

We are here today to discuss three issues: Canada's Economic Action Plan, the importance of continuing to work together for the three levels of government, that is the municipal, provincial-territorial and federal, and what will happen after the Economic Action Plan is gone.

9:15 a.m.

President, Federation of Canadian Municipalities; and Director for the Regional District Central Kootenay, British Columbia

Hans Cunningham

Thank you.

I'm here today to deliver three messages. First, Canada's economic action plan is a model for how governments can work together to meet national challenges. The plan established very clear national objectives and brought federal, provincial, territorial, and municipal governments together to achieve them. We should apply the same principles to longer-term national challenges, everything from traffic gridlock to homelessness.

The second message is this: when there are challenges in completing projects, governments must continue working together in the best interests of Canadians. We expect the stimulus plan to stay on track and the vast majority of projects to remain on schedule. When delays, as were mentioned, are caused by forces beyond a community's control, governments need to use common sense to make sure the project is finished and costs are shared fairly.

Finally, our biggest concern about the economic action plan is what happens after it's gone. Stimulus spending will end, but the underlying partnership must continue to grow.

A year and a half ago, Canada was plunged into a recession by the global economic crisis, and governments had to work together to take swift and decisive action. In January 2009 the federal government released its economic action plan, and today that plan is delivering the largest ever one-time injection of federal funds into Canada's cities and communities.

The federal government designed its economic action plan to provide a dramatic but temporary boost to Canada's economy, increasing public investments for a short period while the private sector recovered from the global economic crisis. While the government has stood by its stimulus deadline, it has shown flexibility in response to concerns brought forward by FCM. Initially the government said it would not pay for stimulus projects that were not fully completed by March 31, 2011. This meant that on a cost-shared project, a municipality could end up paying the full cost of construction if any part of the project was not finished on time. The government revised its position and agreed to pay its full share of project costs incurred before the stimulus deadline, regardless of whether the entire project was complete. Of course, this took the threat of 100% clawback of federal funding off the table.

Now the priority for all orders of government is to create as many jobs and complete as many projects as possible during the next 10 months. Governments must continue working together to move the country forward towards full economic recovery. Municipalities are working flat out to finish stimulus projects by March 2011, and according to Infrastructure Canada, virtually all stimulus projects are on schedule. That's good news.

In cases in which there are challenges in specific communities, all governments need to use common sense. If a delay is caused by something outside a municipality's control, as in the examples you heard, then federal, provincial, and territorial governments should work with the municipality to finish the project and share the costs fairly.

Municipal stimulus projects are governed by separate funding agreements in each province and territory. These agreements were signed at different points during the past year and delivered funding through different programs. Some provinces and territories took longer to sign on to the plan than others. FCM is in ongoing dialogue with the federal government and provincial, territorial, and municipal associations. If there are signs that the stimulus deadline poses a substantial risk to job creation or the completion of infrastructure projects, we'll call on all governments to come together to revisit the issue. Of course, our biggest concern about the economic action plan is what happens after it's gone.

For more than a generation, governments looked the other way as Canada's cities and communities fell into disrepair. Cracks formed in Canada's core infrastructure and transportation networks, hurting our economy and quality of life.

9:20 a.m.

Chief Executive Officer, Federation of Canadian Municipalities

Brock Carlton

Now, thanks to recent investments and a new spirit of intergovernmental cooperation, Canada is starting to put the brakes on this downward slide. Thousands of cost-shared stimulus projects have brought governments together to create jobs and fight the recession.

And the permanent Federal Gas Tax Fund is giving municipalities stable, long-term infrastructure funding for the first time in history. These gains have slowed the decline in our cities and communities; now we must restore them to health.

9:20 a.m.

President, Federation of Canadian Municipalities; and Director for the Regional District Central Kootenay, British Columbia

Hans Cunningham

We cannot afford another relapse in the places where we live and work. We need to keep moving forward.

Governments must move beyond the political turf wars that cost taxpayers money and keep us from delivering results on issues that affect Canadians. Today's challenges criss-cross political boundaries. They call for greater cooperation. The economic action plan is a powerful reminder of what governments can achieve when they set clear objectives and work together to meet them. We need to take the same approach when it comes to addressing our longer-term challenges. That's a vision Canadians support and municipalities are ready to help build.

We're closer to it than we were just a few years ago. Let's not stop now.

Thank you for your time and attention. Merci.

9:20 a.m.

Conservative

The Chair Conservative Merv Tweed

Thank you, everyone. Thank you very much.

Mr. Kennedy, you have seven minutes.

9:20 a.m.

Liberal

Gerard Kennedy Liberal Parkdale—High Park, ON

Thank you Mr. Chair.

First of all, I just want to thank the representatives for the deputations, and also, through you, I think we want to express our appreciation for the work municipalities have done and are doing. We heard from your related group, the Union of Quebec Municipalities, last week. It's very clear that there is an extreme amount of hard work being done. We were reminded that there is a difference. Even though this is a partnership between levels of government—at least that's the aspiration—there's a difference between signing cheques and actually making the projects happen. I think we realize that a very large part of that is happening this year, that your municipalities are working very hard to make that happen. I think you should understand that I, at least, on behalf of our party, appreciate that, and I'm sure it's shared by others in this room. What we want to find out today and in subsequent discussion is how we can help that. How can we not have federal rules get in the way of the effectiveness of municipalities?

I know that the British Columbia association did a survey, and I have a few questions about that in a second. I just want to double-check something. Did the Federation of Canadian Municipalities conduct its own survey? Is it in charge of data that give us the national picture?

9:20 a.m.

Chief Executive Officer, Federation of Canadian Municipalities

Brock Carlton

No, we haven't conducted a survey of all our members. We have been working through the provincial associations to understand the situation in each province, and we've been working with the department to keep track of the global data as we've progressed through the stimulus package.

9:20 a.m.

Liberal

Gerard Kennedy Liberal Parkdale—High Park, ON

Okay. Thank you very much.

Mr. Nyce, you have brought data, at least results of a survey you took on as an organization. Can you give us a feel for the results? Did that survey include the prospect of cancellations by individual municipalities? In other words, do you have instances where it's that significant? We heard from the Quebec association—for example, it mentioned La Pocatière, which is a municipality of about 5,000 people that got approved for a project but ended up not doing it because the deadline was too daunting in terms of what it could mean in local expense.

Did your survey touch on the extra costs that municipalities may have already entered into—in other words, completion bonuses, or completion insurance, or things of that nature? Is there something along those lines that was picked up in your survey?

Also, did your survey look at whether or not individual projects might be scaled down or—I know this sounds a bit extreme—left incomplete if there is a problem? The reason I include that is that we have some examples of it taking place.

I'm just wondering if you can give us a sense of the problems that you know of and what you might be able to share with the committee in terms of some of the information you've been able to collect from your members.

9:20 a.m.

Gary MacIsaac Executive Director, Union of British Columbia Municipalities

Mr. Chair, first of all, in terms of asking questions with respect to cost impacts, we did not include that as part of the survey. We prepared the survey in response to an invitation to appear as a witness, which was with respect to the March 31, 2011, deadline. That was not one of the questions.

We did hear from the members of the local governments in B.C. representing 74 infrastructure projects that had been approved. As was said by President Nyce, local governments are working very hard to achieve the deadline. They are fast-tracking; they're doing everything within their power to meet the requirements set out by Canada.

The question was about issues that arose from our survey. They've been the types of issues that have been addressed by President Nyce here today. They were typically cases where there were approvals or issues beyond the control, or outside the regulatory purview sometimes, of the local government.

The second issue we heard in some cases was the short construction season and the timing of the announcements.

Those are the two sort of predominant issues that arose, and they've been explained with some examples here today by President Nyce.

9:25 a.m.

Liberal

Gerard Kennedy Liberal Parkdale—High Park, ON

I just have a very quick follow-up, Mr. Chair. We heard about the impact of elections in Quebec. Was that a factor at all in British Columbia in terms of the capacity of municipalities to respond?

9:25 a.m.

Barbara Steele First Vice-President, Union of British Columbia Municipalities

If I may speak on that, yes. We had a provincial election, and actually things didn't get kind of settled down until about September, and after that the announcements were made. So we did lose a fair amount of time due to the provincial election.

9:25 a.m.

Liberal

Gerard Kennedy Liberal Parkdale—High Park, ON

Thank you very much.

President Nyce, you mentioned a couple of very interesting ideas around flexibility, and I wonder if I can explore them a little bit.

If I understand the first one correctly, if the federal government wanted to be very artificial about their deadline, they could charge their dollars first if a project... Presumably the other criteria would be met. In other words, the federal money could be clear and the provincial money could be held back in order to finish the project after the deadline. I just want to make sure I understand it correctly, because I think we're here to find out how we can help.

Second, there's a potential swath of projects in the BCF communities fund. One set doesn't have a deadline, and another set that was the top-up done under stimulus does. The idea was that maybe municipalities could arrange their portfolios in order to be eligible for the money, and not be penalized because of what would really be a technicality.

Is that a correct way to phrase those suggestions?

9:25 a.m.

President, Union of British Columbia Municipalities

Harry Nyce

That is correct, and I think flexibility is our goal here on a case-by-case basis.

9:25 a.m.

Liberal

Gerard Kennedy Liberal Parkdale—High Park, ON

We believe here that there are quarters of government that have equal value and there is no senior or junior. If we want to be in partnership, we have to listen to you, and our action should reflect that.

It was suggested last week by the Quebec municipalities' association that if we didn't have that flexibility, it wouldn't really be treating municipalities fairly. In other words, there were delays on the federal end and there may have been some on the provincial end. You mentioned the election. But it wouldn't be fair that the only governments that paid for delays were the municipal ones.

I'm not trying to put words in your mouth, but is there something constructive in terms of...? This is the only committee that looks at the infrastructure part and a big part of the municipal partnership. Shouldn't we have some ground rules like this? Shouldn't we be encouraging this to be part of every federal-provincial arrangement? When the municipalities say something like “flexibility” and “still prepared to work very hard for it”, shouldn't that be built in? Maybe that's something we should do in the future to make sure a partnership is really based on those kinds of principles.

9:25 a.m.

President, Union of British Columbia Municipalities

Harry Nyce

When we're looking at the partnerships that have been built among the municipalities, I think the administrative label--if I can use that term--is to have a look at them and be flexible in how the projects are being rolled out.

At the end of the day, as I mentioned in my presentation, the construction season for some of these is short. When you're working with other partners, like the Kamloops Indian Band, for example, they also have a timeline. So that's out of the control of the municipality. The other example I used was the Department of Fisheries and Oceans. They also have their own timeline.

So I think it's important, when we're looking at that and the construction season, for example, to have a look at an administrative process to deal with it.

9:30 a.m.

Liberal

Gerard Kennedy Liberal Parkdale—High Park, ON

Thank you, Mr. Chair.

9:30 a.m.

Conservative

The Chair Conservative Merv Tweed

Monsieur Laframboise.

9:30 a.m.

Bloc

Mario Laframboise Bloc Argenteuil—Papineau—Mirabel, QC

Thank you very much, gentlemen, ladies, for your presentations.

We have a very difficult task ahead of us, that is to try and convince the government. In the presentation given by the Union des municipalités du Québec, the mayor of Laval was very clear. When we develop programs, we need to have deadlines. No one is challenging that fact. We have deadlines, everyone must respect them, and that is the problem.

In fact, there are constraints that are specific to certain areas, in a country as vast as Canada. For example, Quebec is a massive province, so imagine the entire country of Canada. How can we get the government to understand that in the beginning, when people sent in their applications, they were all aware of the deadline, and they all felt they would be able to meet the deadline? The problem is that on a day-to-day basis, managing it is not easy. There have been elections in some areas, there are particular applications that concern some departments, and there are administrative procedures. As a result, some municipalities will not be able to meet the deadline in the end.

Is my interpretation correct? Mr. Cunningham and Mr. Nyce of British Columbia, given your expertise, and are you aware of the fact that certain municipalities will not be able to meet the deadline?

9:30 a.m.

President, Federation of Canadian Municipalities; and Director for the Regional District Central Kootenay, British Columbia

Hans Cunningham

Certainly, yes, some are having those kinds of difficulties. As you heard from the Quebec instance and from the B.C. instance, generally those things are beyond the community's control. That's why we're asking for flexibility.

9:30 a.m.

Bloc

Mario Laframboise Bloc Argenteuil—Papineau—Mirabel, QC

Mr. Nyce, are you also aware of that in your community?

9:30 a.m.

President, Union of British Columbia Municipalities

Harry Nyce

Yes, we are.