Transport Committee on June 15th, 2010

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

It's not a point of order. It's not relevant either.

Ms. Steele, I just wanted to ask you as well, in your opinion... There's construction everywhere, everyone is working, and that's a terrific thing, but I want to ask you what the unemployment rate in Surrey is. Is it the national average of 8%? Higher? Lower?

[Barbara Steele]

I can't answer that question.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Are women benefiting as well from the jobs that have been created from the infrastructure...?

[Barbara Steele]

I can't answer that question either. I don't know.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Is the infrastructure program benefiting more men than women, would you say, in the construction industry? I wonder if women's jobs are being created.

[Barbara Steele]

I wouldn't even be able to answer that question at all.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

I wanted to ask Mr. Carlton or Mr. Cunningham the following. Other municipalities have told us that only those projects that were well under way benefited from the program. So if you were through the feasibility study plan, you received funding, but other projects were ineligible. Was that your situation in B.C.? If you have projects that were ready to go, you benefited from the plan; otherwise, you didn't benefit. Would you agree?

[Hans Cunningham]

That's a technical question, and I'll refer you to Mr. Buda for that.

[Michael Buda]

In my job at FCM I spend a lot of time on the phone with our members, who are usually phoning us and asking how we can help them solve their problems related to the infrastructure stimulus fund and to ensure that their projects get done. In the vast majority of cases, municipalities don't actually do a lot of planning and engineering work until they know the project is budgeted. In the case of the infrastructure stimulus fund, they would have chosen projects that may not have had the designs fully complete, but for which they knew they could complete the designs relatively quickly.

To your question of whether the people who were more or less on schedule happened to have projects that were fully drafted, I know for a fact that was not true, because lots of municipalities phoned and said they have begun drafting plans and doing engineering and all the rest, after finding out they had got the money. That's normal. There is a whole variety of reasons why people are on target. Anyone who has renovated their home will know that if you tear down a wall and find something you didn't expect, it puts you back six weeks, eight weeks, two months, or a year. The same thing happens when you dig up a road or pull down a building. So there is a variety of reasons to explain why people are on target or not on target.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Mr. Buda, thank you. I just want to get in one more question really quickly before I'm out of time.

My concern is that this infrastructure stimulus plan was a real lost opportunity for a once-in-a-generation legacy project. For instance, Toronto could have built a subway. We could have had a high-speed train. We could have had LRTs in Mississauga, for that matter. We've invested $50 billion, and, frankly, all we have to show for it are some roads and sewer maintenance and bridge repair.

Would you agree? Was there a legacy project that you would have otherwise undertaken in your communities if the deadlines in particular weren't so punitive and restrictive?

[Michael Buda]

Certainly, our members discussed that extensively in December 2008 and January 2009, before the stimulus funds were announced. Even at that time, most of our members understood that it would be difficult to undertake legacy projects if the government's intention for this program was to focus mainly on creating jobs. Of course, that was a government decision.

Our members are here. We have a range of needs, from rehabilitation of existing infrastructure to the creation of new legacy projects, as you described. They were certainly willing to work with the government of the day to complete projects that were consistent with meeting national objectives, like job creation, but you're right, there were other projects that were available. It really was up to the government to decide what the objectives of that program were.

[The Chair, Conservative, Merv Tweed]

Thank you.

Mr. Jean.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Thank you, Mr. Chairman.

Thank you, witnesses, for coming today.

First of all, I just want to point out some facts. I've been here six years now--in this job, four and a half--so I've had an opportunity to work with the FCM. I've found that partnership very good, and I think we've developed some good programs together with the federal government.

I see you nodding your head in agreement, so I see you're happy.

In 2007 the FCM identified that there was a $123 billion deficit in infrastructure across this country. We came forward, as a government, with a $45 billion plan to put some infrastructure back—$45 billion from the federal government, which, if you utilize three ways, includes $33 billion through Building Canada and Canada's economic action plan and the stimulus fund.

I notice that you're questioning the $45 billion, but if you add it all up, it's $45 billion--for sure the most money ever spent by a federal government in the history of our country to revitalize infrastructure. In fact, if you times that by three, which is the idea of all of the programs, you have, funnily enough, enough money to cover the entire deficit that the FCM identified. So I'm not surprised that you're very happy with this federal government.

I think it's clear; we've talked about the purpose of this particular fund, which is, I might remind members, less than 10% of the entire infrastructure money. It's $4 billion, so we're talking about less than 10%. And if 10% of the projects have some sort of shortfall, or you don't have enough money, or they aren't completed in time, that's less than 1%.

I just want to remind everybody of the big picture here. This is a federal government that came forward with $41 billion in money outside of the infrastructure money. We're here today talking about less than 10% of that fund, and less than 10% of that, really, is an issue, in my mind. I just want to point that out.

You see, representing governments in northern Alberta... As you mentioned, northern Alberta has a lot more challenges than most communities across this country. We have no employees; we have nobody who can do the work, in essence, in northern Alberta. You have to get them from somewhere else.

We have some of the worst weather across this country. We have a lot of problems getting material that's reasonably priced. Yet I have no complaints from my constituents.

Now, maybe you do, Mr. Carlton, but...

I have a mayor who told me over a year ago, “Listen, I'm not going to apply for that, because I can't get it. I can't do it in time.” So now I'm going to go back to that mayor and tell him, “Well, you could have applied for that. You could have applied for it. You didn't need to get it done. The FCM has come forward and said that you don't need that deadline for infrastructure stimulus.”

And it's actually a fund to stimulate an economy; it's not just to build infrastructure. I just want to make sure that's clear.

I want to talk a little bit about not just fairness but about the infrastructure stimulus fund project application. I have the application in front of me. You all have had a chance to read this, I'm sure.

First of all, it talks at the bottom about an attestation, in number 3:

I warrant that this project would not be otherwise constructed by March 31 2011, without the federal...funding requested.

It also says:

4. I understand that

(a) all costs incurred before provincial and federal approval and after March 31, 2011, are ineligible;

You didn't get the money unless you signed it. Is that right?

[Michael Buda]

Yes, that's true. I know I've spoken to municipalities in Alberta who signed exactly that form when they applied for the funding and then waited seven or eight months before they got their approval.

You're right, all municipalities went into this knowing what the guideline was. What they didn't know was when they were going to get the approvals.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

It also talks in here about environmental issues, and you've talked about aboriginal consultations. But as I look at this, it's only a one-page application, which I'm sure you appreciate after the 30- or 40-page applications from previous governments. It's a one-page application that mentions environmental issues three times: about whether or not this is to deal with an environmentally sensitive area; about whether or not it's federal environmentally sensitive land; about whether it complies with the land use or resource management plan for the area.

There are three aboriginal issues in here. It talks about aboriginal consultation, aboriginal communities, or the project having any adverse function on aboriginal communities.

Everybody knew full well what they were getting into with this agreement, and that's what I'm having problems with today. I mean, this is infrastructure stimulus money. Any economist will tell you that infrastructure stimulus money is for stimulating an economy, which we obviously needed--everybody's agreed with that--and now you're coming to the table asking for a change on, in my mind, less than 1% of the Building Canada plan that this government put forward, that you asked for.

I just really don't understand. I think it's unfair to my municipalities to go to them and say, “Sorry, you should have applied for that, because we're going to extend it.” I mean, you have to have rules in place. It's just like when you elect your board of directors; you have to have your nomination form in on time or else you're not going to be qualified to sit for that board and be elected.

We have to have deadlines, and that's what I'm here to tell you today--even though you're here to tell me something.

[Hans Cunningham]

Thank you very much. I appreciate what you've said. Of course, you're absolutely right insofar as it looks as though the vast majority of the projects are going to be completed on time and on budget, and everything's fine.

I come from an educational background, and if all of the kids except one in my class are doing very well, as a teacher, I go back and help that one who's having some trouble, especially if the troubles aren't the kid's in particular. Maybe there are things happening at home or things like that.

That's what we're talking about here. We're talking about flexibility for those who, for some reason or another that's beyond their control, need a little bit of extra help. We realize they represent a low percentage, but we don't want to throw them to the wolves.

Thank you, though.

[The Chair, Conservative, Merv Tweed]

Thank you.

Before I go to our final round, one of the questions I have deals with the delays. Municipalities I represent come to me and say they need to know what they're doing right away so they can avoid costs because of delays. Now I see the other end of it. Do you see asking for a delay or moving it into the future to some date increasing your costs at the end of the day, or does it just give you the time you need to finish the project?

[Michael Buda]

It's just gives us the time we need to finish the project so that the federal share of the total project cost can be reimbursed to the municipal government.

In some cases, construction costs might be decreased, because of course if you can spread the time to complete a project over a longer period, less overtime might be needed. In that specific case, municipalities have already budgeted those costs, so that really isn't going to be nearly as big a factor. It's simply the time to get things done.

I might add that some of the possible solutions might not actually require more time but might involve changing the parameters of the project or changing who is providing the funding and when. It's not necessarily simply a question of extending a particular project's deadline. It involves looking at other things.

As Mr. Carlton has mentioned, the government has already provided flexibility in removing the 100% clawback. Just two days ago, actually, the department confirmed that originally Treasury Board rules stipulated that the final expense claims, which included all invoices incurred up until March 31, 2011, had to be submitted by April 15, just two weeks after the deadline. Our members let us know that wasn't going to work. If you're renovating a home, you hold back the final 10% so that you make sure the project is done completely. Municipalities have holdbacks that aren't going to be paid until, in some cases, up to three months after the project is completed, even though the work was completed before the deadline. They wanted to ensure that the holdback could be covered. Just last Friday, after a brief e-mail exchange with them, the department confirmed that they understood the issue, and they agreed to extend the deadline for receiving invoices to up to 90 days after the March 31 deadline.

That kind of flexibility has actually made a pretty big difference. I heard sighs of relief from all over the country. Even though, again, it's not specifically changing the deadline for when work needs to be completed, it's making a difference for how municipalities are able to complete the project.

We're asking for those types of administrative changes, again, recognizing that this program was developed to create jobs, which is a national objective within the responsibility of federal and provincial governments. Municipalities are there to offer projects that could help federal and provincial governments create those jobs. In return, we are asking for some recognition of our partnership in other governments' primary objectives.

[The Chair, Conservative, Merv Tweed]

Has there been consultation with the provinces involved in this as well?

[Michael Buda]

Obviously you'd have to ask our provincial association counterparts, but in all cases, this is a three-way cash-sharing program. Provinces always have to be involved. Indeed, I think it's important for committee members to understand it's not just the federal government that needs to consider these types of administrative changes. Provinces are going to have to be involved as well. They're providing one third of the funds, and they're the other of the two signatories on these funding agreements. So this is definitely not just a federal government responsibility. Provincial governments need to be involved.

[The Chair, Conservative, Merv Tweed]

That was the reason I asked, just to make sure. You may get what you want from one body and not from the other.

[Michael Buda]

Exactly.

[The Chair, Conservative, Merv Tweed]

Hopefully they're ongoing at the same time.

Mr. Kennedy, you have five minutes.

[Gerard Kennedy, Liberal, Parkdale—High Park, ON]

Thank you, Mr. Chair.

I just want to say to the visitors here, just to be clear, that not all members of the committee want to lecture you on how to do your job. I know you've heard a lot from the other side. There is a real respect in the House that isn't reflected necessarily on the government side in this committee. We understand that the partnership means we have to listen to what you're saying, and we have to find ways to get things done, and that's what Canadians want too. I don't think you should feel the least bit reticent.

Ms. Brown mentioned timely, targeted, and temporary—

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

A point of order.