Evidence of meeting #58 for Transport, Infrastructure and Communities in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was projects.
A recording is available from Parliament.
Conservative
The Chair Conservative Larry Miller
We'll call our meeting to order.
We have three different witnesses or groups with us today, all by video conference. We have representatives here from the City of Burnaby, the City of Surrey, and Clean Energy Canada.
With that, we'll start with presentations of 10 minutes or less.
We'll start with you, Mr. Corrigan. Go ahead.
Derek Corrigan Mayor, City of Burnaby
Thank you for allowing me to contribute my comments on this important issue.
As you have been told repeatedly, the infrastructure deficit in Canada has reached serious proportions, leaving billions of dollars in future expenditures as a burden on the next generation. Anything we can do to lighten that load is welcomed by municipalities across Canada. Certainly, the present commitments will make only a small dent, but continued support from all levels of government will be crucial to our eventual rehabilitation of the assets that make Canada strong.
My city, Burnaby, is a model of sustainable asset management and fiscal responsibility. We have no debt, and we maintain reserves in the amount of $700 million for the replacement of our infrastructure and the development of our community. There are many cities that strive for the same goal, but there are consistent obligations placed upon us by other orders of government that make our job much harder.
On a regional level, we have recently completed the massive upgrade of our water system to meet federal and provincial objectives, with minimal contributions from senior governments. We are now obliged to replace the existing Lions Gate waste water treatment facility, and again we are struggling to obtain support from the very government that ordered the replacement. It is incredibly frustrating and disheartening.
In British Columbia, many people believe that the political influence on the distribution of federal funds is a major factor in the decisions on infrastructure projects, rather than the prioritization of the projects by level of importance and impact. In my 28 years of experience on municipal council, I tend to agree that the process is not sufficiently objective or impartial. In fact, the political lobbying required to get support for much-needed infrastructure has become unseemly in a democratic policy-driven society. We need to know that the process is based on solid criteria and is a transparent process. That has not always been the case.
I am also greatly concerned about the diversion of federal infrastructure funds to private sector organizations such as railways. It came as a great surprise to me that railway infrastructure was being funded by building Canada fund money. It seems to me that the private sector should be responsible for its own needs, based on their own market viability. Public funds should be for public purposes.
Finally, I am very aware of the debate going on in this committee about the privatization initiatives that are euphemistically called “private-public partnerships”. As one of the mayors involved in the Canada Line project, I could go on for hours about the flawed process that was undertaken to build a transit line operated by the private sector. Suffice it to say that the project has created very little new ridership at a massive cost to local municipalities. We ended up funding well over half the project and continue to pay higher interest rates on the money borrowed by the private sector.
Over and over again, auditors general in various provinces write lengthy reports on the excess costs of the P3 model, but their voices are not heard in Ottawa. Instead, the federal government relies on reports from the organizations that benefit the most from these projects and ignores the reality. In fact, the federal government insists that all major projects go through this lens, and it is made clear that projects will not be supported if they fail to embrace this ideological commitment to turning public sector infrastructure into private sector for-profit operations.
At the municipal level, we are quite capable of determining which projects will benefit from a private sector presence and which must necessarily remain public. We do not need Ottawa playing Big Brother from 5,000 kilometres away, and we certainly resent being forced into privatization initiatives on the threat that funding will be withheld.
To summarize, we need a fair and impartial process for infrastructure funds that is based on objective criteria. We need to be sure that there is no political interference in the dissemination of funds that come from our hard-working communities and are redistributed by Ottawa. We need Ottawa to cooperate in an open procurement process where the best interests of our communities is the highest priority and there is no predetermined political direction that insists on privatization.
Canada should be an example to the rest of the world in showing that the even-handed management of limited financial resources can achieve great results for our citizens. We can all accept losing in a fair process, but it is un-Canadian to stack the deck and cheat communities out of their fair share of limited financial resources for political reasons. We can do better and we should do better.
Thank you very much.
Conservative
The Chair Conservative Larry Miller
Thank you, Mr. Corrigan.
We will now move on to Ms. Hepner, mayor of Surrey, for 10 minutes or less, please.
Linda Hepner Mayor, City of Surrey
Thank you, Mr. Chair, and thank you to the committee for inviting the City of Surrey to appear in front of you today.
Joining me is Vincent Lalonde, our city manager; Jaime Boan, our manager of transportation; and Paul Lee, our rapid transit and strategic projects manager.
I'd like to take a moment to introduce the committee to the city of Surrey. We are one of the fastest growing cities in the country, with a thousand new residents arriving each month. We are currently the 12th largest city by population in Canada, and we will grow from our current population of half a million people to 800,000 over the next three decades, surpassing Vancouver as the most populous city in British Columbia. Our employment will double to more than 300,000, making Surrey a key player in the economic development of the region and the province.
We're a diverse community, both culturally and in economic terms. There are 102 different languages spoken in our city. We have a community of young people, with one third of our population under the age of 19, who will support the growing trend towards the use of and reliance upon public transit. The City of Surrey has just been named one of Canada's top employers for young people in 2015.
Geographically we're big. We're 315 square kilometres, making us bigger than Vancouver, Burnaby, and half of Richmond, all combined. We're well connected to the Asia-Pacific gateway and to the U.S. border. That means we have an opportunity to grow and to use rapid transit to shape our future, and for any city that is an important part of the future.
The city is well aware of the federal funding opportunities that have been made available in this region and in municipalities over the past decade. We have summarized a few of those key federal programs and related them to the recent infrastructure investments in our region.
Federal contributions have been pivotal in the construction of the Canada Line and Evergreen Line rapid transit projects in this region. The early commitment and leadership of the federal government were instrumental in getting the province, and then the local authorities, to commit to funding and to cost sharing.
On a local level, federal funding was provided to deliver the most recently completed Powell Street overpass project in the city of Vancouver. As with last month's announcement of the Highway 1 improvement project in North Vancouver, funding from the new building Canada plan was allocated for this significant project. Federal leadership has also been key in bringing together a large group of funding partners and delivering the Roberts Bank rail corridor program, which has improved Surrey's and the region's rail connections to the Asia-Pacific gateway. Similarly, the South Fraser perimeter road project, which benefited Surrey, was delivered under the Asia-Pacific gateway and corridor transportation infrastructure fund.
In the city of Surrey, we have benefited directly from the infrastructure stimulus program through which much needed improvements have been made to our arterial roads. For example, federal contributions were recently received for the widening of 96th Avenue and the Fraser highway in Surrey. Most recently, our biofuel project has been made possible with cooperation and contributions from the P3 Canada fund. The biofuel project uses state-of-the-art technology that enhances the city's environmental and economic sustainability. The biofuel project will be delivered under a full public-private partnership with a concessionaire responsible for its operation and maintenance.
As demonstrated by these projects, it is evident that federal funding is vital to the development and delivery of local infrastructure projects in this region.
Moving on, I'd like to turn your attention to the light rail transit project that Surrey is developing.
In June of 2014 the mayor's council of this region endorsed the implementation of light rail transit, a high-quality rail-based transit service, to meet Surrey's growth and future transportation needs. Surrey's light rail transit system is composed of 27 kilometres of light rail serviced by 19 stations along three of the city's busiest transportation corridors. Surrey's light rail transit system connects the city centre to the Langley city centre and to our local town centres and communities. The capital cost has been estimated at $2.14 billion in 2015 dollars. When completed, the light rail system will carry 170,000 passengers daily. That ridership is roughly three times the ridership forecasted for the Waterloo line or Edmonton's Valley Line.
Surrey's light rail project will significantly increase accessibility and transit coverage for Surrey and Langley residents. An additional 200,000 people will be within walking distance of a quality transit service. Urban-style light rail transit will enhance the public realm and the place-making opportunities and support transit-oriented development in my city. Urban light rail transit will also provide pedestrian-friendly, human-scale, and mixed-used neighbourhood design that offers both eyes-on-the street and from-the-street visibility. Surrey's supportive land-use policies and development plans are aligned with the light rail transit project to generate high levels of ridership. There is no question that urban-style city-shaping light rail transit is the solution to Surrey's mobility challenges.
Now I will briefly summarize the project timeline. In 2014, the city's application to the P3 Canada fund for the light rail project was screened in for further consideration. Currently, the City of Surrey, in partnership with the South Coast British Columbia Transportation Authority, or our TransLink, is refining the design and cost estimate of Surrey's light rail transit project. The project will continue with its development by applying to the P3 Canada fund in time for a full business case submission in the spring of 2016. Our work will be done in full partnership with TransLink. The project timeline calls for funding negotiation and commitment prior to 2016, procurement completion and construction starting in 2018, and revenue service beginning in 2021.
Some of what we have identified as the key benefits of the project include the expansion and diversification of local employment and investment. On a permanent basis the light rail project will add sought-after higher-valued jobs in our city. It will support the expansion of Simon Fraser University and other post-secondary institutions in the core of the city. It will also provide a vital incentive critical to the recruitment and the retention of high-tech employees and support the development of Surrey's Innovation Boulevard, which is a high-tech health and technology corridor. It will promote focused urban growth to slow sprawl and relieve development pressure on our agricultural and green spaces. Most importantly, it will generate a great economic return.
Here are some of the highlights of an economic benefit study that was completed. From construction activities, 24,600 jobs will be generated in B.C., with 4,200 more across Canada. As well, $354 million in federal personal income tax revenue and $132 million in B.C. personal income tax and sales tax revenue will be generated. From a 30-year operation and maintenance period, another 14,000 jobs will be generated in B.C., and 1,200 across Canada. In addition, there will be $116 million in federal personal income tax revenue, and $101 million in B.C. personal and sales tax revenue.
The study has also identified how LRT contributes to Canada's economic action plan and B.C.'s jobs plan. As an added benefit, the Surrey LRT project will assist affordability in Surrey and across the region by reducing car dependency and increasing housing choice.
In closing, I would like to reiterate the importance of the federal presence, and the funding programs that enable infrastructure projects in all levels of government across Canada. In our region and in the city of Surrey, we have benefited from past and current federal funding programs, with key contributions to projects of different scope and different costs. It is important that the federal investment be sustained and continued into the future.
Surrey's LRT project is one such project that will need federal funding contribution for its realization. In Surrey, it makes economic and land-use sense, and the scope and operation is ideal for full public-private partnership delivery. This is evident by the interest already expressed by PPP Canada, and the screened-in status given to this project in its initial application for funding.
Personal income and sales tax revenues from the Surrey LRT project will offset some of the capital grants by the federal and provincial government. An LRT in Surrey will contribute to the success of the Asia-Pacific gateway program and its objectives. We are well aligned with Canada's economic action plan, by increasing infrastructure investment, growing trade and expanding markets, and building strong communities across this country.
I want to thank you for the opportunity to present this project to you today.
Conservative
The Chair Conservative Larry Miller
Thank you very much, Ms. Hepner.
We will now move to Mr. Woynillowicz.
Dan Woynillowicz Director, Policy and Partnerships, Clean Energy Canada
Thank you, Mr. Chair, and thank you to the committee for inviting us to participate today.
I'm pleased to be with you this afternoon on behalf of Clean Energy Canada, a climate and energy think tank based at the Centre for Dialogue at Simon Fraser University. Our focus is on accelerating our nation’s transition to clean and renewable energy systems by studying and documenting the global shift to clean and low-carbon energy sources, by hosting multi-sector dialogues and by inspiring and informing policy leadership.
The transition to a cleaner energy system in Canada is a national challenge that requires federal leadership. While many decisions about energy production and transmission are within the domain of the provinces, the federal government has both areas of oversight and the ability to catalyze and support provincial and interprovincial decisions that shape our energy system.
The Canadian Electricity Association has made it clear that our electricity system is in need of massive infrastructure renewal. The Conference Board of Canada has estimated that by 2030 close to $350 billion in new investment is needed just to maintain the reliability of the system we have today. This renewal will require capital investments in the range of $15 billion a year each year for the foreseeable future. While those investments are already beginning to reduce the electricity sector’s carbon emissions, targeted federal clean energy infrastructure initiatives and investments can accelerate the process significantly.
I'd like to just briefly recap some past federal initiatives. In 2007, the government established the $1.5-billion Canada eco-trust for clean air and climate change program, which was intended to “provide support to those provinces and territories that identify major projects that will result in real reductions in greenhouse gas emissions and air pollutants.” Eligible projects for that funding included electricity transmission initiatives.
The federal government’s green infrastructure fund, which existed between 2009 and 2014, provided support for a range of projects, including green energy generation and transmission. In 2012, the federal government agreed to a loan guarantee for the Muskrat Falls hydroelectric generating facility and associated transmission lines.
Looking ahead, much more is required. Canada has abundant renewable energy resources from coast to coast to coast. Tapping into these resources can provide us with the electricity we need to increasingly electrify our economy, a key pillar in addressing climate change. Ultimately, tackling climate change is going to require shifting away from fossil fuels to clean energy as a power source for many of our everyday activities, from driving our cars to powering our industries to heating our homes.
To prosper in a low-carbon world, Canada will need to update its electricity infrastructure across the country. We need the transmission capacity to move clean power to where it’s needed, and a modern smart grid that allows for solar rooftops, smart meters, and leading-edge energy efficiency approaches. In addition, some provinces are exploring opportunities for clean energy exports to neighbouring provinces or to the United States, but realizing these opportunities often requires significant investment in new transmission capacity.
We will also need to think more regionally, with a focus on optimizing our electricity system on a national or even North American scale. Grid and transmission investments could allow Canada’s jurisdictions to integrate more variable renewable power, such as wind and solar, into their electricity mix. Today, some of Canada’s provinces continue to rely on higher emission coal or gas-fired electricity, while others have built significant hydro or renewable power infrastructure. Greater regional integration of our electricity system can help deliver clean, renewable power to markets currently reliant upon fossil fuels.
Similarly, many states in the U.S. are heavily dependent upon coal-fired power, and will be seeking out low-carbon sources of power to comply with President Obama’s clean power plan, creating new export opportunities for Canada.
One example of that is a recent agreement between Minnesota Power and Manitoba Hydro. It's a renewable optimization agreement under which electricity from excess wind power produced in North Dakota can be stored in Manitoba’s hydro reservoirs. The 15-year deal is worth $4 billion and is the single most lucrative export deal that Manitoba Hydro’s has ever struck. The 500-kilovolt cross-border great northern transmission line will allow the utilities to balance variable power from North Dakota wind farms with dispatchable power from Manitoba hydro facilities. These investments are part of Minnesota Power’s plan to achieve a one-third renewable, one-third natural gas, and one-third coal-generated electricity portfolio.
That stands in stark contrast with their grid today, which gets 80% of its electricity from coal. Canada is doing a lot to help them achieve that goal.
Finding additional ways to move clean electricity to coal-powered grids would have significant benefits, but it will require regional coordination and cooperation at the state and provincial levels, and also at the federal level.
Last summer the Canadian Academy of Engineering published an important study entitled “Canada: Becoming a Sustainable Energy Powerhouse”. The study noted that Canada has a low-carbon electricity advantage that positions us incredibly well to deliver on the goals of energy security and reduction of greenhouse gases in both Canada and the United States. The academy suggests that opportunities to significantly increase electricity trade to the United States could in fact be the necessary impetus to drive more regional integration within Canada as well, between provinces. Ultimately, this integration would offer the benefits of lower energy costs, reduced price volatility, improved reliability, and lower greenhouse gas emissions.
This study emphasizes that electricity generation is a high-value manufactured good that has the promise and potential to deliver large economic benefits through inter-regional trade. Ultimately, the academy concluded that to realize our clean electricity advantage and reap these benefits, we must expand our power grid and make upgrades to the existing interconnections and transmission systems.
There's a clear role for the federal government to enable this infrastructure investment. Increased federal support for clean energy infrastructure across Canada would contribute to numerous federal policy objectives. It would encourage economic development by supporting greater Canadian participation in the fast-growing clean energy sector, including the potential for greater exports of clean electricity and clean energy technology and services.
Given the government's recent commitment to a 30% reduction in greenhouse gas emissions by 2030, supporting clean energy infrastructure would help deliver these emissions reductions as well as support the government's goal of an electricity system that is 90% non-emitting by 2020.
What's needed? First, we need additional and targeted commitment and support for clean energy infrastructure. Second, we need a commitment to collaborate with the provinces to optimize and better integrate our domestic electricity system. Third, we need continued engagement with the U.S. government to identify new electricity infrastructure needs and to enhance the efficiency of the permitting process for international power line projects.
In closing, we can't lose sight of the fact that turnover on our electricity system happens slowly. We're now at a point in history where the Canadian electricity system needs updating, upgrading, and renewal. The choices we make in the coming years will build the system our children and grandchildren will rely upon. Policy-makers like you must choose wisely.
Thank you, and I look forward to addressing any questions you may have.
Conservative
The Chair Conservative Larry Miller
Thank you very much.
We'll now move to questioning.
You have seven minutes, Ms. Sims.
NDP
Jinny Sims NDP Newton—North Delta, BC
Thank you very much, and it's good to be here, especially as I have two of my favourite mayors presenting today: my mayor, Linda Hepner, and my dear friend Derek Corrigan as well. Both are recently elected, so congratulations to both of them.
I have a question first for Mayor Hepner. I don't think it comes as a surprise—we have been talking about this for the last number of years—that the City of Surrey is in dire need of infrastructure development, especially when it comes to public transit. We're a city that is fast growing, and we're also a city that is surrounded by bridges. Often in the morning and in the late afternoon and evening, we are in a gridlock. Because of that, I think the timeliness of the projects and getting things moving now is really critical.
We're hearing from cities across the country that they need money for big transit projects now, and that the back-loaded funds provided through the new public transit fund in budget 2015 don't actually address the current needs.
For me, specifically for Surrey, is there an immediate need for transit funding in Surrey or would you consider the back-loaded funds, which will only come two years from now, enough to improve Surrey's ability to meet ongoing transportation challenges? Also, can you comment further on the importance of getting transit infrastructure money out of the door now for big transit projects in cities like Surrey?
Mayor, City of Surrey
Thank you for the question, Jinny. It's nice to see you this afternoon, even if it's on a screen.
The connectivity of this light rail project in Surrey and our dire need for transportation is so significant that the sooner, the better, in any case. The procurement options that will be required for this particular project, we can't achieve those for a year or so down the road in any event. I have made a commitment that this connectivity project is the only way our city can continue to grow and become the Asia-Pacific gateway success that is expected throughout the nation.
I also want to mention that we haven't had any increase in our light rail or our rapid transit for over 20 years. All of the other areas in this region have grown and have seen the advantage of that light rail system being expanded. Surrey now has to shape its community to prevent sprawl based on our geography, and we have to do it as soon as possible.
NDP
Jinny Sims NDP Newton—North Delta, BC
Thank you, Linda. I know your passion for the light rail project and your commitment to improving the transit system. As you said, we need it to prevent sprawl but also to address the quality of life for those who live in Surrey and have to travel. I've found that quite challenging even moving within Surrey, because we do have that lack of investment.
Linda, I have a question for you around the P3 infrastructure projects. Do you agree that the rules governing P3 infrastructure projects keep infrastructure investments for shovel-ready projects from getting out of the door in a timely manner?
Mayor, City of Surrey
I will refer that question to our city manager, who has dealt with the minutiae around a P3 project and what that looks like.
I'll turn it over to you, Vince.
Vincent Lalonde City Manager, City of Surrey
Thank you.
We have just been through the process of a P3 for our biofuel project. There's no doubt that the process is a little longer to go through, but then you can accelerate once you hit construction; you can accelerate the timeline. The front end of that process is quite elaborate, although it is worthwhile going through, especially if you want to seek some innovation or assuage some inherent risks to the project.
P3s are not necessarily suited for every infrastructure project. You have to look at this very carefully to determine if the benefits are there compared to some of the disadvantages. There's no question that the process is quite elaborate for good reason. You not only will sign a commercial deal that will cover the construction of a large infrastructure, but it's also often the case that there will be operation and maintenance over the long term. You have to be very cautious.
NDP
Jinny Sims NDP Newton—North Delta, BC
Thank you for that.
I also want to thank you for saying that each project needs to be assessed, because in B.C. we've seen some P3 projects not being so stellar, where temporary foreign workers were brought in and paid $4 an hour. I know in Surrey our mayor won't let that happen, because we need the jobs for those living in Surrey, and there is a need there at this time.
Linda, with regard to biofuels and clean energy, what other kind of support could the city use so that we can move towards clean energy and protecting our environment? What are some specific projects you see that would really advance moving towards cleaner energy right in Surrey?
Mayor, City of Surrey
You may or may not know that within our city centre we have actually established, as a city, our own district energy system. We can always use help on that.
Mayor, City of Surrey
Yes, we can always use help in growing that. We've made it fundamental to the development of any of the new high-rise structures or anything new coming onto the grid that they have to attach themselves to our district energy.
The clean energy power plant construction—we could certainly use some national help with that.
Conservative
The Chair Conservative Larry Miller
Thank you. The time is up.
We'll now move to Mr. McGuinty for seven minutes.
Liberal
David McGuinty Liberal Ottawa South, ON
Thank you, Mr. Chair. Thank you very much for being here, folks.
Mayors Corrigan and Hepner, I want to ask a series of questions around the existing arrangements that your cities have with the federal government. In previous incarnations of infrastructure funding, have your cities signed agreements between yourselves, B.C., and the federal government?
Mayor Corrigan.
Mayor, City of Burnaby
We haven't had much opportunity to participate in infrastructure funds in the city of Burnaby. It's been disappointing over the years that as a result of our applications we've had relatively little by way of success.
We have signed agreements on some infrastructure projects that helped promote our sewer separation projects in a part of our city, so we have been through those systems, but we certainly have not been the recipients of a major amount of infrastructure money in the city of Burnaby, certainly nothing compared to Surrey.
Mayor, City of Surrey
Thank you.
We have had the advantage of infrastructure funding. We got some $8 million for the 96th Avenue arterial widening, and we did sign an agreement. We got the Bridgeview sewer, which was at one time a gravity flow. We were having a lot of problems with that sewer system, and we got some help with that back in 2009. Most recently is the biofuel project, which is going to be the very first closed-loop system in North America. We're particularly proud to have received funding for that, and we got a small amount of funding—
Liberal
David McGuinty Liberal Ottawa South, ON
Sorry, Mayor, but time is of the essence. Can I ask, was there an agreement signed between your city, the Province of B.C., and the federal government in order to receive this infrastructure money?