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.
Liberal
Gerard Kennedy Liberal Parkdale—High Park, ON
Mr. Chair, I just think it's important that we hear complete answers from the witnesses. We have only a handful of municipal organizations coming forward, and I think it's fair that they be heard.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
When Mr. Kennedy has the floor, he can ask whatever questions he wishes to have answered. Until that time it should be left to the person who has the floor.
Conservative
The Chair Conservative Merv Tweed
That's not a point of order, but we do want to hear the complete answers.
Please continue.
Chief Executive Officer, Federation of Canadian Municipalities
I was going to finish by saying that you started off I think with a very interesting set of comments about the projects being timely, targeted, and temporary, and we all understand that. I don't think what we're talking about changes those three characteristics. All we're saying, in some very specific instances, is that flexibility is required so that the project can be completed, so that the jobs that were anticipated are delivered, and so that the targeted exercise is finished. That's all we're saying. I don't think we're compromising those three fundamental elements of the stimulus package.
Conservative
Lois Brown Conservative Newmarket—Aurora, ON
May I ask how many projects are being asked for consideration?
Chief Executive Officer, Federation of Canadian Municipalities
We don't have a concrete list, because, as I said to a question from Mr. Kennedy, we work through our provincial associations. We work with the data from the department.
Conservative
Lois Brown Conservative Newmarket—Aurora, ON
How much time is being requested? When we say the jobs are temporary and obviously targeted to be kept within a budget year for the government, the March 31 deadline coincides with the end of the 2010 budget. Obviously that's very important for the government to ensure that we meet our obligations. When I look at projects that have been able to be finished, I find it difficult to say to other communities who have been able to meet the deadline, well, we always intended for there to be flexibility. They might have applied for something else. My town might have applied for money for a project that really does need to be done, but they knew it wasn't doable within that two-year time period, so they said they'd have to forgo that one in favour of a manageable, operational, “we can get this done” project.
Conservative
Chief Executive Officer, Federation of Canadian Municipalities
Our members are not telling us that perception of fairness is an obstacle to seeking flexibility, where flexibility is required so that projects can be completed as a result of delays that are beyond the control of the municipalities. I should also say that municipalities are one-third partners in this. The federal government is certainly taking a lead and putting a lot of money on the table, but so are the provinces and the municipalities. We shouldn't forget that there are three different orders of government working on this, not just one.
Liberal
Sukh Dhaliwal Liberal Newton—North Delta, BC
Thank you, Chair.
Welcome, witnesses. As all politics is local, my questions will be going to one of my favourite councillors, Madam Steele.
Madam Steele, you mentioned that the Surrey mayor and council, management, and staff worked really hard to meet those deadlines imposed by the federal government. Did any of the projects in Surrey have to pay premiums to meet those deadlines?
First Vice-President, Union of British Columbia Municipalities
Project by project, I don't have the funding in front of me. I'm sure there were some premiums paid, but I wouldn't know for sure.
We do have one that's still not complete and that we are working very hard to complete. I didn't intend to say that they were all finished and done and we're sitting back smiling; we have one that we're working very hard to complete, and getting people to work on it has been an issue. There are also possibly one or two in Delta that we are still working very hard on. We were able to get through most of ours, but we still have a couple that are not complete.
Liberal
Sukh Dhaliwal Liberal Newton—North Delta, BC
So a couple of them are not complete.
On one of the projects that you mentioned, you are trying to meet the deadline. It's also my understanding that there is going to be a 10% premium on that particular project. If the federal government does not cooperate on this extension of the deadline, the 10% premium that will be paid will be transferred to the local taxpayers. Is that true?
First Vice-President, Union of British Columbia Municipalities
I'm not all that familiar with that particular number, so I'm really not prepared to make much of a statement about it.
Liberal
Sukh Dhaliwal Liberal Newton—North Delta, BC
Let me put it this way. In general, my research shows that there is one project in the city of Surrey for which the city taxpayers have to pay 10% in addition to what they will have to pay on their property taxes if the deadline is not extended. Can you tell me if there would be any additional burden on the federal government if the federal government were to extend that deadline?
First Vice-President, Union of British Columbia Municipalities
I'm going to let Mr. Buda answer that question.
Director of Policy, Federation of Canadian Municipalities
I'm not familiar with that specific example, but the situation you've described actually happens in municipalities in any federal-provincial-municipal one-third cost-share program. Municipalities are actually more than a one-third cost-share partner in most of these projects because there are a large number of capital costs associated with the project that are not eligible under the rules of the program. They include unanticipated and unbudgeted costs such as those, so in that specific case it may be that if the risk premium or the costs associated with meeting the deadline weren't budgeted, they may not actually be eligible. It will depend upon how they budgeted it.
As I said, that holds true for any number of things. When you open up the road to replace the sewage pipes, you budget for a certain number of conditions and factors. If you find things you didn't expect underneath the pavement, the costs will rise. In all cases of federal infrastructure programs going back to 1993, it has been the responsibility of the municipal government to pay for that. This is common not just to the stimulus program but to previous programs as well.
Liberal
Sukh Dhaliwal Liberal Newton—North Delta, BC
When you say the cost is going to be a burden on the municipality, are all the municipalities in a state to afford that kind of tax burden on the taxpayers?
Director of Policy, Federation of Canadian Municipalities
It will depend on the fiscal capacity of the municipality, but, as I said, all municipalities go into federal infrastructure programs with their eyes open. Anyone who has renovated their house knows that things almost never go exactly as planned; municipalities know that if the project doesn't go exactly as planned and there are cost overages, they know they are going to be picking up those differences, although obviously if they could budget them, they would be included in the project budget and then covered. Almost anyone who is doing a house renovation keeps a notional reserve so that they know they can cover it.
In the grand scheme of things, municipal fiscal capacity is extremely pressed and property taxpayers are pressed, but specific projects are affordable, yes.
Liberal
Sukh Dhaliwal Liberal Newton—North Delta, BC
My next question is to the UBCM. You mentioned that you sent a survey out, and 22 out of 39 surveys stated that the projects would benefit from deadline extensions. Generally speaking, what timeline are we looking at for those projects?
President, Union of British Columbia Municipalities
At this point we didn't have any specific time allotted. What was found was that on a percentage basis, some of the projects would meet the deadline—50% would--and 50% just weren't sure.
Liberal
President, Union of British Columbia Municipalities
We don't have that at this point.