Transport Committee on Oct. 19th, 2010

[Sukh Dhaliwal, Liberal, Newton—North Delta, BC]

Okay, one more round. Thank you. I might as well take advantage of the situation.

I have heard a lot about this gas tax model. It was brought in by the Liberal government and then made permanent by the present government, so something must be right with that model if this government took it over from the previous one. Also, when I talk to the municipalities, they tell me that they like this kind of model because they think this is a very fair model to deal with the situation.

On the other hand, on the stimulus funding, it was project-by-project funding, and a lot of people were complaining that the money was flowing into the government-held ridings and whatnot. Would you comment? This is over now. If something in the future comes up, would you like to see a model that would work fairly for all municipalities irrespective of whether they're held by one party or another?

[Brock Carlton]

Yes, of course we would. I'm certainly not going to comment on the selection and distribution in the country. It wasn't part of the municipal role to be involved in that in any way whatsoever. Certainly, the expectation is that programs are accessible to all municipalities across the country in a fair and equitable way.

The advantage of the gas tax is that it provides a foreseeable revenue source that can be planned with and banked on so that municipalities can use it to borrow other money or do whatever they need to do, whereas on a project-based program you have to apply, and there are all the upfront costs and the uncertainties, etc. So there are certain advantages to the gas tax.

Yes, any programming needs to be accessible in a fair and equitable way across the country.

[Sukh Dhaliwal, Liberal, Newton—North Delta, BC]

Go ahead, Mr. Harvey.

[Dale Harvey]

I'd just like to add one thing. We like the concept of spreading the money around, but we'd also like our leaders, both provincial and federal, to recognize the special needs of rural Canada.

A lot of times with these programs, the rural municipalities, not only in Saskatchewan but in other areas of the country as well, fall through the cracks. Some of the money is dedicated to things--specifically water and sewer--and that's very important, because we need that. But for some of the things that support industry and the resource sector and all of that, the money isn't there to support them. We come second in line.

Anyway, the gas tax is based on population, so we're not the biggest winners in that program. But we appreciate what we get, that's for sure.

[The Chair, Conservative, Merv Tweed]

I have to move on to Monsieur Guimond.

[Michel Guimond, Bloc, Montmorency—Charlevoix—Haute-Côte-Nord, QC]

I will be quick. And then I will turn over the rest of my time to my colleague Mr. Gaudet.

Mr. Miller, in the examples I gave earlier to explain why some projects will not be completed on time in Quebec, I mentioned the shortage of pipes and contractors.

Have you heard of anything else? With the tendering process made public by the municipalities, we realized that, due to the shortage of contractors since everyone is working and there are few bids, the contract amounts, in terms of supply and demand, are somewhat exaggerated.

For example, in one of the municipalities in my riding, Saint-Pierre-de-l'Île-d'Orléans, an infrastructure project was accepted. They were going to redo the recreation building. Various officials from both the Quebec and the federal government assessed the project. The project was estimated at roughly $800,000. The lowest bid was $1,400,000.

So the amounts that were granted... We are talking about a small municipality with less than 5,000 people and without really having the means. Have you heard about something like that?

[Gabriel Miller]

Yes, I have already heard about something like that. We have to study this particular challenge. I believe there are a number of reasons. Perhaps there is a shortage of contractors and companies. In some cases, there is just a lot of work. But there are also very small communities or rural areas where there is only one contractor or one company and there is no one else to do the work when that person or that company is busy.

We have to use our judgment in each case because we know that, when a deadline approaches, costs always tend to go up. However, there are also situations like yours where it's just too much.

In Quebec and elsewhere, I think the government has to tell its officials that, if a municipality can finish the work before March 31 but it will cost a whole lot more, they have to use their judgment and show some flexibility.

It is difficult to find one simple rule that applies to all cases. I understand there is a need and that, at the same time, we want to get the work done as quickly as possible. So, when there are unusual cost overruns, we need to show flexibility.

[The Chair, Conservative, Merv Tweed]

Very quickly, Mr. Gaudet

[Roger Gaudet, Bloc, Montcalm, QC]

I just want to tell my friend Colin that the preparations for the 2010 Vancouver Olympic Games started two years in advance. So they were ready for all the programs.

Thank you, Mr. Chair.

[The Chair, Conservative, Merv Tweed]

I'm not sure that was a question, but we'll let it go.

[Roger Gaudet, Bloc, Montcalm, QC]

No.

[The Chair, Conservative, Merv Tweed]

Mr. Bevington.

[Dennis Bevington, NDP, Western Arctic, NT]

My first question would be, now that we've gone through this stimulus program exercise, would you say that this is in any way a preferred method of funding municipal projects, and that municipalities would normally conduct their business in this fashion, as we've seen with the stimulus funding? Would you recommend that this type of funding be applied on a regular basis? Or is this simply a one-off that has been conducted and we very clearly need to move on now to more predictable, more plan-oriented funding for municipal infrastructure?

[Brock Carlton]

Certainly there's a need for long-term and planned funding for infrastructure. There's no question about that. As we said earlier, the idea of having a period of time to plan and develop the longer-term vision would then, we would think, set the framework for following up with the kind of long-term, planned, predictable funding to support infrastructure development.

With respect to the stimulus program, the administrative elements that I was talking about earlier are elements that we think become part of a new way of working as we go forward. We know that in a context of long-term, predictable funding, there will be programs that are cost-shared one-third, one-third, one-third. In the stimulus package, the idea that municipalities have a critical role to play in national objectives and the administrative elements of effective application, with quick turnaround time on payments--those elements are fundamental to an effective cost-sharing program in the future.

[Dennis Bevington, NDP, Western Arctic, NT]

But those are not the ones we're debating here. We're debating the deadline for infrastructure funding--

[Brock Carlton]

Oh. Sorry.

[Dennis Bevington, NDP, Western Arctic, NT]

--where you have municipalities caught in a situation where they have to bid first for projects that have to end on a certain date, taking projects that are outside their normal infrastructure, capital planning process, add them in....

Would you say that for municipal planning, that was really a good thing? Or was it just simply a one-off and we're going to now move back to more sensible planning?

[Brock Carlton]

It was a way of responding to a crisis.

[Dennis Bevington, NDP, Western Arctic, NT]

That's what we're after.

[Brock Carlton]

Everyone understood that the urgency was important. The deadline was important. All of that was part of the context that we were responding to. If in the future we're operating in a context that is not a crisis context, then no, we wouldn't see that as the ideal. But all the other elements of it are really the features that are important in it going forward.

[Dennis Bevington, NDP, Western Arctic, NT]

But other than a national economic crisis, how would you perceive that a program like this would ever fit into a municipality's planning process and its capital process?

The point I'm getting to is that what you engaged in was a process where the main beneficiary was the national economy, not particularly the municipalities. They may have gained by putting programs forward, but the main beneficiary was the national economy. When municipalities get caught up on particular details--a deadline, for instance--we need to have this flexibility: municipalities went out of their way to work on the national priority.

[Brock Carlton]

To me, the main beneficiary was our country. Municipalities were part of the work and part of the benefits of that, for sure.

[Dennis Bevington, NDP, Western Arctic, NT]

Yes.

[The Chair, Conservative, Merv Tweed]

Mr. Jean.

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

Thank you, Mr. Chair.

If there is more time, Mr. McColeman has one more question, I understand.

Mr. Chair, I do want to clarify what Mr. Dhaliwal said. Of course it was James Moore in opposition who nagged and nagged the Liberal government to implement the gas tax funding for municipalities, and now of course he is the heritage minister. The record speaks for itself on that.

To our witnesses today, thank you very much for coming.

I understand that in essence today we are debating a hypothetical. We don't know what is going to be finished on time. We don't know what's not going to be finished on time. We are collecting information on it, of course. Infrastructure Canada has told us that. But in essence we're dealing with hypotheticals. We have more than six months to go in a program that really was a two-year stimulus fund.

Dealing specifically with your three points, I understand that what you're not asking for is a blanket extension. Just going through your three points, you're saying show flexibility for communities who have played by the rules and worked hard, work with the communities to adjust schedules on specific projects, and work with the provinces in the same regard.

I see a nod to the affirmative. So that's correct.

Now, my understanding, in speaking with Infrastructure Canada, is that this is exactly what they are doing. They're trying to be fair and reasonable with those people who have played by the rules and have tried hard. If that's not the case, I would invite you and ask you to come back to the committee and tell us that, giving specific cases with specific information, because our information here today is that they are working to be fair and reasonable, along the exact lines that you've suggested.

Finally, I do have a question on this. You say that infrastructure spending is two times more effective at creating jobs. Now, any economist, I think, or at least the ones who taught me, will tell you that this is true--in the short term, hence “stimulus” fund.

Is it fair to say--I see your head nodding again, Mr. Miller--that in the long term it's just not sustainable, that in fact tax cuts over the long term will provide more jobs because that stimulates the economy? It gets rid of the freeloaders, where people don't pay taxes and have a false economy, which happens in many, for instance, developing countries?

So it's fair to say that, short term, as the government has done, we're trying to create jobs, and it's two times more effective, but over the long term it's not sustainable. Is that fair to say? Because of course you will run out of tax money after a period of time.