Transport Committee on Oct. 19th, 2010

[Roger Gaudet, Bloc, Montcalm, QC]

The officials have nice projects in mind. It's just like in Ottawa, in Quebec City and in all the other provinces: the officials have the ideas, but the governments make the decisions.

[Brock Carlton]

I know, but the only reason I mentioned it is to clarify that we were not given carte blanche. Plans were in place. The elected members made the decisions, but they did so based on a list of projects prepared by officials.

So it is a factor in the provinces, but it is just one among many.

[Roger Gaudet, Bloc, Montcalm, QC]

In Quebec, given that we started the projects late, we were lacking materials, such as pipes and so on. The contractors did not want to wait and some of them more than likely went to work in Ontario or somewhere else which resulted in a shortage in Quebec.

It's not that it is a bad program. It is a very good program and I fully support it; I really hope it will be renewed. But other provinces will soon go through elections. I would like the government to take action and make things fair. In other provinces, elections have already been delayed because of floods somewhere in the country. As well, in the event of death, elections can be pushed back a month.

In my opinion, the idea to push back the deadline a few months is quite valid.

[The Chair, Conservative, Merv Tweed]

Mr. Mayes.

[Colin Mayes, Conservative, Okanagan—Shuswap, BC]

Mr. Carlton and Mr. Miller, I just want to say as a former mayor that I have appreciated the work of the FCM in representing municipalities on the national stage.

One of the things that the FCM did in the past was to secure certainty and funding for capital works for municipalities through the gas tax funding. That certainly has helped municipalities to plan. Of course, our government has accelerated that funding, and we've also extended the life of that funding, which, I think, is something that we're missing.

The stimulus funding was a one-time, very unique funding to address economic concerns, not just capital infrastructure concerns. The uniqueness of it is that our former minister, John Baird, made sure that the application forms were streamlined so they would move out quickly. He guaranteed payments within 30 days of receiving invoices from municipalities. I think our minister did a great job in speeding things up.

So I'd like to ask you a question on the gas tax funding. That comes into play, so that is something that's ongoing. When you talk about the next steps, that should be included in your next steps. How do you feel about that?

My other question is on the application forms. Did they work well? Were they clear enough? Have you had good feedback from your membership as far as the application forms are concerned?

Finally, have you heard any problems with the payments not being in a timely fashion?

[Brock Carlton]

On the gas tax question, there is no question that the gas tax is a cornerstone to the ongoing support for municipalities and municipal infrastructure into the future--absolutely. We would like to underline this and to certainly acknowledge the governments, past and present, for initiating the gas tax and extending it and making it permanent. It was extremely important.

However, one thing that is important is that, over the long term, the gas tax is not tied to economic growth; it will diminish in value over time. The second is that the gas tax alone is not sufficient, in our view, to support the long-term infrastructure needs of the country. While it is an important part, it can't be the sole part of the long-term plan.

The second question you asked was with respect to application forms. There is no doubt that this program and the administrative elements of this program have been streamlined in ways that are very significant for our members. With Minister Baird, and now with Minister Strahl, we've had a discussion about doing a bit of a “lessons learned” to analyze how this model can be adapted so that it becomes the model, in some form, for future programming.

We have thanked Minister Baird many times for his work in streamlining that administrative process. We thank the bureaucrats as well for their work in making the application process much more effective and the payments more effective.

Where we have heard—and it's not frequent—about issues of delays in payments, we don't know whether it's a provincial or a federal issue. It's a complicated process, but certainly in comparison to the traditional cost-shared program, this is groundbreaking in some of its elements, which we look forward to having in future programs.

[Colin Mayes, Conservative, Okanagan—Shuswap, BC]

Thank you. That's a good report for our government.

The issue of elections was brought up by Mr. Gaudet. We did have a municipal election in Saskatchewan during the time of this stimulus funding and the projects. As well, in the province of British Columbia, there was a provincial election. It was quite interesting, because we were under a lot of pressure to roll out the funding prior to the provincial election. We were very successful in doing that, working with our municipalities. Then, after the election, it took a while before we had the second wave.

Still, I have not heard of any challenges from any of the municipalities within my constituency. I'm just wondering if you've heard from any other regions about the issue of provincial or municipal elections affecting the timeliness of their getting the projects done.

[Brock Carlton]

No. We do know that things were slow off the mark in B.C. because of the provincial election.

There is a letter, I believe, coming to the committee from the Union of British Columbia Municipalities, saying that things are on track, things are in good shape. But no, we haven't heard of this issue, an election-related delay, in other parts of the country.

[The Chair, Conservative, Merv Tweed]

Go ahead, Mr. Dhaliwal.

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

Thank you, Mr. Chair.

Mr. Chair, when we look at the number of cents out of a dollar in taxes going to municipalities, we see that it's about 8¢ or 9¢, compared to 45¢ each to the provincial and federal governments. What we see in our cities is that our water, sewers, roads, and infrastructure are deteriorating, right? It's a big deficit. What type of future vision and plan do you foresee to meet those challenges that municipalities will face?

[Gabriel Miller]

What we know--and probably everyone around this table knows--about infrastructure is that it's a never-ending job. You build it, you have to maintain it, you have to repair it, and someday you have to replace it. As a country, we're only starting--and only have just started in the last few years--to realize that governments need to start planning their investments in that way. For a very long time, the federal government's involvement in infrastructure was of a much shorter term than was required. The gas tax, introduced by a previous government and made permanent by this one, is your foundation, then, for ongoing investments.

Now it's time to bring cost-shared programs into that vision, put them on a long-term basis, and bring the three orders of government together to have a much fuller discussion about the types of investments that should be the priority for those cost-shared investments. Right now, we still labour in a system in which a municipality throws a bunch of applications to the government, and then the government looks at them and chooses something. We need a much more strategic approach to the way we select the projects that governments try to undertake together. We need to set some objectives and measure our progress.

A very good example is public transit. There have been substantial investments in public transit, but what sorts of reductions are we trying to make in terms of commute times? What are we trying to accomplish in terms of traffic gridlock? There are very few national goals tied to our infrastructure investments. This is the discussion that we feel needs to be had, and it's extremely important that discussions start now.

Here's the reason: three years from now, the cost-shared federal infrastructure programs that exist under the Building Canada fund will expire. We know there's not going to be a lot of new money. If we spend the next couple of years planning how we can learn the lessons of the projects we've just built and the programs we've just used, and designing the next generation of programs, then as we come out of the deficit, we'll be ready to start making those investments.

If we don't have that conversation now, we won't start planning those new programs until 2013 or 2014 or 2015; our experience with infrastructure programs is that it's a further three or four years before any money gets spent, because you have a year of building a budget commitment, a year of doing funding negotiations with provinces, and a year of choosing projects before you're finally into building things.

For us, starting that conversation around those long-term principles now is essential, because otherwise three or four years of tight budgets could turn into a decade of no investment and no plan for our infrastructure.

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

Basically, you're telling us that because the Building Canada fund will expire by 2014, if we do not make that decision and do not have a plan in place, then the municipalities--and, indirectly, the taxpayers--will feel undue pressure on them?

[Gabriel Miller]

Let's be clear: the next couple of years won't be easy either. Most of the Building Canada funding has been allocated. The main source of funding from the federal government will be the federal gas tax, and there will be a few tough years. Municipalities themselves had to find their one-third funding for infrastructure stimulus projects, so they have tight budgets too. It's one thing to say we're going to get through two or three tight years with the knowledge that we'll be ready to resume a long-term plan after that--that's a challenge I think the municipal sector is up for--but if it is an indefinite uncertainty as to when we'll resume our work on infrastructure, that's a much bigger problem.

So, yes, your description is absolutely right: there's a looming end to the programs in place, and we need to be ready to replace them when the budget outlook improves.

[The Chair, Conservative, Merv Tweed]

Thank you.

Ms. Brown.

[Lois Brown, Conservative, Newmarket—Aurora, ON]

I'll be sharing my time with my colleague.

[The Chair, Conservative, Merv Tweed]

You have five minutes.

[Lois Brown, Conservative, Newmarket—Aurora, ON]

Thank you very much.

Mr. Miller, I'm really glad you touched on that. I think that's one of the most important aspects of everything we've been talking about here: for the first time in Canadian history, we've seen a government that has put in place a long-term economic plan for our country.

What we saw was Advantage Canada, which was laid out in 2006. That included this whole aspect of building Canada and the fund that was put forward. It was something that was longer than a four-year fund. We were looking down the road. We're at that point again, where you're saying that we need to do that.

I've had the great privilege of being able to be at a number of announcements, both in the GTA and York Region, that have been funding announcements or ribbon cuttings for many of the infrastructure projects, be they recreational, affordable housing, or waste water projects. Also, there have been knowledge infrastructure programs. All of these are part of where we need to go.

But over and over, I've heard from people that the best thing to come out of this is the cooperation, the working in tandem of three levels of government, so that regardless of our political stripe—because although it's a Conservative government in Ottawa, we are dealing with political stripes across this country--we've managed to get the job done.

Do you think we are on the brink of a new era of cooperation amongst various levels of government? Personally, I think that's the best message for taxpayers. There's only one taxpayer, so they want to see cooperation. Do you think this can continue?

[Brock Carlton]

We think the context we've been through in the last two years has demonstrated very clearly that to tackle national priorities the three orders of government must work together. If they do work together, it can be very efficient and effective.

Let's identify the key national priorities—obviously infrastructure is one of those—and let's mobilize the resources and the cooperative element of three orders of government to address these issues over the long term.

[Lois Brown, Conservative, Newmarket—Aurora, ON]

Thank you.

Mr. McColeman.

[Phil McColeman, Conservative, Brant, ON]

I'd like to thank you for being here.

As a former contractor for 22 years, I come at it from a different angle. I'd like to talk briefly about your views on the management of projects. Often when these are conceived and scoped, a well-written proposal will include contingencies. It will include contingencies for financial and time constraints, for overtime, for whatever, and it will also account for unforeseen conditions. In the case of municipalities, I'm sure there's also an element of the politics and dynamics that will happen around city hall in terms of what turf is whose.

Having seen that, and having been part of that process as a private entrepreneur, I'm wondering what your views are on projects: the difference between how they've been managed from municipality to municipality and what you've seen and heard in terms of how well they've done from a project management view.

When you're looking at 20,000 projects with a 97% success rate, anyone would view that as a huge win for the country, in my view. But you're going to have all different types of situations because of both the good and the bad management of a project.

My question drives at two fronts. Number one, are you aware of projects that are under budget, ahead of schedule, or both? Number two, are you aware of projects that were totally mismanaged, or they are poorly managed and thus creating problems in getting to the completion date?

[Dale Harvey]

In our case, I am definitely not aware of any projects that were totally mismanaged. And some projects would be ahead of schedule. I can't pinpoint any projects specifically, but some have been done for quite a while. As far as being under budget goes, to my knowledge they were all contracted, so they would have a contract price. If the contractor spent less than what he thought he would, it's to his benefit, but it wouldn't necessarily be a benefit to the municipality.

[Phil McColeman, Conservative, Brant, ON]

Could I cite an example? Hopefully, time permits.

In my community there were some six projects, two of which were under budget. They put proposals forward for $22 million, with the project coming in at $18 million. It's ahead of schedule as well. It was the same with the roads project. One was a twin-pad arena. The second one was a roads project that came in at $1 million under what they had applied for in terms of infrastructure funding.

There are examples out there. I'm just wondering if you're hearing about those from your members.

[Brock Carlton]

There are examples of those cost savings across the country. We don't operate on a project-by-project basis at FCM, so we don't get into that level of detail, but we know of situations where there have been savings.

[Gabriel Miller]

Through our discussions with Infrastructure Canada, we know--and I think the department deserves credit for this--that they certainly did see projects coming in below budget. They were very determined to use that, to pick up those savings and invest them in additional stimulus projects, and in as quickly a manner as possible. I think that's in keeping with the spirit of the stimulus plan, which is to create as many jobs as you can in as short a period as you can.

I think it's also important to note that one of the benefits of a true stimulus plan is that prices should be down because there is less work coming from the private sector, so it's a good time for governments to get work done if they can find the money, because of course there should be overall savings. Certainly what we heard, especially in the first six months to a year after the program began, was that we were seeing very competitive bids. The sense was that people were hungry for the work.

As we've gone through this, I think that's been less true because the economy has picked up. Certainly, in some areas, private sector construction has also increased, so there has been more demand.

But yes, there are a lot of examples from Infrastructure Canada of projects coming in below budget.

[The Chair, Conservative, Merv Tweed]

Thank you.

As we have done in the past, everybody has had a chance, but we will go to one final round of questions if anybody wants to take them.

Mr. Dhaliwal? One more round.