Evidence of meeting #4 for Transport, Infrastructure and Communities in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was municipalities.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Brock Carlton  Chief Executive Officer, Federation of Canadian Municipalities
Adam Thompson  Policy Advisor, Federation of Canadian Municipalities
Patrick Leclerc  Director of Public Affairs, Canadian Urban Transit Association
Christopher Norris  Director of Technical Services, Canadian Urban Transit Association

3:30 p.m.

Conservative

The Chair Conservative Merv Tweed

Good afternoon, everyone. Welcome to the Standing Committee on Transport, Infrastructure and Communities, meeting number four.

Our orders of the day, pursuant to Standing Order 108(2), are for a study of the national public transit strategy.

Joining us today, from the Federation of Canadian Municipalities, is Mr. Brock Carlton, chief executive officer, and Adam Thompson, policy adviser.

Welcome to the committee. I'm sure you've been following a little bit of what's been going on. I know you've been here often enough to know how the process works.

I'll open the floor to you and then we'll move to questions.

3:30 p.m.

Brock Carlton Chief Executive Officer, Federation of Canadian Municipalities

Great. Thank you.

Of course we're always interested in anything related to infrastructure, so we really appreciate being invited here today.

I should say that our president, Berry Vrbanovic, a councillor from Kitchener, was not able to be here today. He has a council meeting about some important issues, and local democracy is really important to him and to our folks.

FCM has been the voice of municipal government since 1901. Our members represent 90% of the Canadian population. We have approximately 2,000 members across the country.

Public transit is key to a strong economy, and must be part of a new federal long-term infrastructure plan. To compete globally and protect our quality of life, Canada will need cities and communities with fast, efficient transportation networks that connect companies to customers, workers to jobs, and communities to markets.

In a country that needs to increase its economic productivity, traffic gridlock is choking the economy, slowing the movements of goods, services, and people to a standstill.

A recent Statistics Canada report indicates that Canadians spend approximately 32 days per year on the road, commuting to and from work. That amounts to an average of over 75 minutes per day in Canada's biggest cities. In Toronto, going to and from work takes an average of 81 minutes.

Every hour Canadians spend on the road is an hour not spent at home, at work or at school.

The Canadian Chamber of Commerce estimates that road congestion costs the greater Toronto area's economy $5 billion a year in lost productivity. Nationally, that number is much higher.

During these difficult economic times, lost productivity undermines investments made by all governments to help Canada emerge from the recession and improve our economic competitiveness. Gridlock is on the rise in our cities because of Canada's municipal infrastructure deficit. Repairs and construction on our communities' most fundamental asset are being pushed back.

For 25 years Canadians watched the symptoms of infrastructure deficit grow: rusting bridges, crumbling roads, crowded buses and subways, and health warnings to boil local drinking water. However, after decades of underinvestment, Canada has started to confront its municipal infrastructure deficit. Recent investments by federal, provincial-territorial, and municipal governments have helped Canada fight the global recession and rebuild thousands of aging roads, bridges, water systems, and other essential infrastructure.

Ottawa's growing collaboration with municipalities has produced policies and programs that deliver better value for Canadians. The Building Canada plan and the permanent gas tax fund are examples of long-term funding tools the country needs to properly maintain infrastructure over 30-year, 50-year, even 70-year lifespans.

We must protect and build on recent investments to build a country that can support families and businesses. The long-term infrastructure plan promised in the last federal budget is critical to repairing our aging infrastructure. It must include transit investment and solutions to fight gridlock, cut commute times, and connect communities to growing markets and new opportunities.

The permanent federal gas tax invests in public transit, but the high cost of building modern transportation systems requires dedicated funding. Canada's only national source of dedicated transit funding, the Public Transit Capital Trust, expired in 2010. Canadian cities do not have the tools to build and repair modern transit systems on their own while also building roads and bridges, providing policing and fire protection, and carrying out new responsibilities, including many downloaded by other governments.

Without a share of the income and the sales taxes generated by new growth, communities have been forced to raise property taxes, cut core services, and, most often, put off infrastructure repairs. The resulting infrastructure deficit is bad for families, business, and our economy.

A quick tour around the world--New York, London, Singapore--shows that cities with great transit systems aren't forced to rely on property taxes to build them.

All governments must work together, as well as with the private sector, to identify the challenges facing Canada's infrastructure. They must make investments immediately to build the quality roads, water systems, community facilities and public transit that Canada needs to support families, businesses and our future economic growth.

Moving people efficiently requires commonsense cooperation among all governments. In the end, ensuring that Canadians have the capacity and opportunity to move efficiently in our cities and communities will help us address all of our objectives in the service of Canadians.

We'd like to thank you again for taking the time to invite us and for listening to the comments I've just made. We're prepared, Mr. Chair, to answer any questions. I might add, just before doing that, that with me is Adam Thompson, who is a policy analyst in our shop and focused on these issues, so he's also here to help with any questions you may have.

3:35 p.m.

Conservative

The Chair Conservative Merv Tweed

Thank you, Mr. Carlton.

Mr. Nicholls, seven minutes.

3:35 p.m.

NDP

Jamie Nicholls NDP Vaudreuil—Soulanges, QC

Given that governments present and past have had difficulties in improving productivity in our economy, do you think a national transit strategy would strengthen Canada's economy in terms of productivity, and how?

3:35 p.m.

Chief Executive Officer, Federation of Canadian Municipalities

Brock Carlton

We believe very strongly that infrastructure generally is an essential foundation for the economic competitiveness of our country. Within that framework of infrastructure and the discussions of the commitments of the government to long-term infrastructure planning, it's really clear to us that transit is a critical component of that larger question. We believe very strongly that an approach to urban transit that is national, that is based on some key principles and backed up with financial resources from all three areas of government, and where there is possible leveraging private sector interest is going to strengthen the economic competitiveness of this country.

3:40 p.m.

NDP

Jamie Nicholls NDP Vaudreuil—Soulanges, QC

What are some of the challenges of municipalities both small and large in implementing efficient transit systems?

3:40 p.m.

Chief Executive Officer, Federation of Canadian Municipalities

Brock Carlton

Let's start with....

3:40 p.m.

NDP

Jamie Nicholls NDP Vaudreuil—Soulanges, QC

Sorry, it's a big question.

3:40 p.m.

Chief Executive Officer, Federation of Canadian Municipalities

Brock Carlton

Yes, it's a big question, but let's start with the reality that municipalities are really strapped for cash. If you look at the tax dollars collected in this country by different orders of government, the municipalities collect eight cents out of that tax pie, and that is simply not sufficient to do all the things that municipalities are expected to do, whether it's transit or whether it's roads and bridges or policing and community safety, and in some provinces it's social housing. But the bottom line is that the financial resources are not there for municipalities to deliver all the things they are expected to deliver on.

3:40 p.m.

NDP

Jamie Nicholls NDP Vaudreuil—Soulanges, QC

But the government has made permanent the gas tax funding. Is this not sufficient to answer communities' needs?

3:40 p.m.

Chief Executive Officer, Federation of Canadian Municipalities

Brock Carlton

The permanent gas tax is an enormously important financial support for municipalities in this country. It is not indexed, so as inflation carries on into the future the value of that gas tax will diminish.

Secondly, the gas tax, while invaluable and predictable, which is a really important feature, is not sufficient for the size of investments required to bring our urban transit systems up to what I think we would consider modern, 21st century, competitive cities in a global context.

3:40 p.m.

NDP

Jamie Nicholls NDP Vaudreuil—Soulanges, QC

Do you think federal agencies such as the Canada Housing and Mortgage Corporation could assist municipalities in implementing things like transit-oriented development?

3:40 p.m.

Chief Executive Officer, Federation of Canadian Municipalities

Brock Carlton

Federal leadership in urban transit is critical. Any time we have a national challenge that challenges us as a country socially, environmentally, or economically, we think there's a really important role to play for the federal government. The federal government and its agencies can take a leadership role in considering national principles and national-level policy or national-level resource allocation that will leverage resources from other orders of government and other actors. But the bottom line in terms of your question is we believe that the federal government and its agencies have a really important leadership role to play, not on its own, but playing a leadership role can really focus the energies of our country in ways that make us a better place in which to live and make us more economically competitive.

3:40 p.m.

NDP

Jamie Nicholls NDP Vaudreuil—Soulanges, QC

I think that's all, Mr. Chair.

3:40 p.m.

Conservative

The Chair Conservative Merv Tweed

Do you want to share it with anyone?

3:40 p.m.

NDP

Jamie Nicholls NDP Vaudreuil—Soulanges, QC

I'll share my time with Mr. Sullivan.

3:40 p.m.

Conservative

The Chair Conservative Merv Tweed

You have four minutes.

3:40 p.m.

NDP

Mike Sullivan NDP York South—Weston, ON

Thank you.

You said the gas tax is not indexed and that's a problem. I'm trying to come to grips in my own mind. I think I know what the order of magnitude is of the difference between what the gas tax provides and what is necessary for infrastructure, but maybe you could enlighten the rest of us.

For example, the “Big Move” project proposed by Metrolinx in Toronto is estimated to be worth about $50 billion over 15 years. The gas tax is a small fraction of that for the City of Toronto, so where is the rest of the money going to come from, and is that typical of big municipalities across Canada?

3:40 p.m.

Chief Executive Officer, Federation of Canadian Municipalities

Brock Carlton

I can't give you an order of magnitude in terms of a figure. What I can say is that in the particular case of urban transit, exactly because of the scenario you're painting, dedicated transit funding is essential. Municipalities simply can't live on the gas tax and the property tax.

Part of your question was on what other avenues there are to span that gap between the gas tax and the needs, and the property tax is the most significant one.

In comparison globally, Canadian municipalities rely on the property tax for significantly more than other OECD countries. In Canada the property tax makes up roughly 60% of municipal revenues. In the United States, for example, it's about 20% to 25%, and in OECD countries the standard is closer to 30%. We rely heavily on the property tax; it is the other major source of revenue. So the only option is to increase the property tax, which increases the tax burden on Canadians on where they live.

We think that if there's dedicated transit funding in the context of a longer-term infrastructure plan, you're going to complement the gas tax with the kinds of resources over the long term that will be needed for these kinds of challenges.

3:45 p.m.

NDP

Mike Sullivan NDP York South—Weston, ON

The gas tax is intended to cover all kinds of infrastructure, is it not? It's not just for transit. Some cities have said they are going to use it for transit, but if you have no transit system you can still get your share of the gas tax and put it into water and sewers and recreation centres. Is that fair to the cities that need more?

3:45 p.m.

Adam Thompson Policy Advisor, Federation of Canadian Municipalities

The gas tax was always set up to be the funding envelope from the federal government that was long-term, predictable, and, importantly, flexible for the needs of local communities.

You've identified correctly that in smaller municipalities large public-transit-specific projects aren't required. In that case, through local democracy, the issues are chosen, like water systems, waste-water facilities, roads and bridges, and other municipal needs.

On the appropriateness of the gas tax, again it's a very significant portion of what is ideally a federal commitment around municipal infrastructure to provide long-term and predictable funding streams. So in that sense the gas tax, in the way it's administered and designed now, is appropriate for the various and diverse needs of municipalities. But as Brock indicated before, it is not indexed, so protecting its purchasing power in the years ahead is something FCM is looking for.

3:45 p.m.

Conservative

The Chair Conservative Merv Tweed

Thank you.

Mr. Coderre, you have the floor.

3:45 p.m.

Liberal

Denis Coderre Liberal Bourassa, QC

Thank you, Mr. Chair.

Welcome to our witnesses. It is not the first time that we have had the opportunity to discuss these issues.

This is all rather confusing. We are talking about a national public transit strategy, but infrastructure and funding are related realities. Do you favour a comprehensive approach rather than a strategy that is strictly limited to public transit? Should we not instead find a new way to manage the relationships between municipalities and the other levels of government? We are talking about the first approach here.

Regarding the second approach, I recognize that the needs are primarily in municipalities. We must think very seriously about an indexed gas tax fund. However, regarding the money that will come later, for example from the Government of Canada, do you favour a dedicated fund or a consolidated fund? If a dedicated fund is created, you will have to invest solely in an agreed area. If we opt for a consolidated fund, it will once again come down to the relationship between municipalities and the government, regarding the money paid by the government.

In everything we are discussing and will eventually discuss, I have the impression there is a problem of governance—the relationships between levels of government—and the way we ensure accountability.

I would first like to know what approach you prefer. Then I will have other more specific questions.

3:45 p.m.

Chief Executive Officer, Federation of Canadian Municipalities

Brock Carlton

We believe it is essential to have a fund for public transit within the context of overall infrastructure issues.

Municipalities have different challenges. Some of those challenges have to do with public transit, and others have to do with infrastructure that is not related to public transit.

In our opinion, it is essential to take a comprehensive view of infrastructure issues. We are talking about a long-term infrastructure plan, one crucial part of which, we believe, deals with public transit.

3:45 p.m.

Liberal

Denis Coderre Liberal Bourassa, QC

Obviously, without basic infrastructure, there can be no public transit.

As you mentioned and as we can see for ourselves—whether it be the Champlain Bridge or other bridges or highways—we have created a problem over time. We have neglected our infrastructure because we did not know how to secure adequate funding.

In Quebec, we took out the toll booths. At the time, the money was put directly into infrastructure in the various jurisdictions. Because of the relationship between the Federation of Canadian Municipalities and the Canadian government, we found a solution. It began when Prime Minister Paul Martin was in office. When the current government came into power, the charges became permanent. How should we deal with issue of funding?

You talked about relationships with the private sector. We have to think of new sources of financing. For instance, would you be in favour of seeking new ways to obtain funding, through toll booths, for instance?

Should we do as they do in the United States, when, in some cases, payment is made electronically, a bit like Highway 407 in Toronto? All of this requires a very clear relationship between the federal government and the municipalities. However, we must accept that, under the Constitution, you are a creature of the provinces. We do not like to say so, but it is the reality. How do you go about redefining the role of municipalities in order to have a national public transit strategy?