Transport Committee on April 23rd, 2018

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

I want to ask you one quick question. You mentioned Bill C-69. Give us a few of the areas that you feel could negatively impact your industry as you outlined at the beginning.

[John Gamble]

At this juncture, there's really a lack of clarity. If you read it, it's a very inspirational or aspirational piece of legislation. There's nothing in there that's a bad idea.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Oh, I would disagree with that.

[John Gamble]

What we need to determine is whether it is practical. Is it something that should be done through projects? Is it too broad? You set a standard for us as engineers, and we'll meet it. Now we have members who do environmental assessment. In my background, I used to write them in Ontario. You look at the economic benefits, which is great, because these things are all connected. Our concern is that we aren't sure what some of the criteria mean yet, and our concern is whether it's going to create policy debates in what should be an approvals process. That's probably our biggest concern, and we want the objectivity and the predictability of the criteria. There are elements in it that are very commendable, such as the deadlines. As I say, there are commendable elements to it, but the devil is in the details. It's one of those things, and you might hit this side of the mark. If the regulations are complex and leave a lot of uncertainty, then you're not going to see investment.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Gamble.

Thank you very much to the witnesses. I think that was a really interesting hour.

We will suspend so the witnesses can leave and our next witnesses can join us.

[The Chair, Liberal, Judy Sgro]

This will be a 45-minute session as we have committee business at the end. We will have five minutes each and we'll do our best to get everybody in.

We're going to start with the City of Surrey, with Mr. Smith, general manager, engineering.

Welcome. I see Mr. Lalonde is not here yet, but perhaps you would like to lead off.

[Fraser Smith, General Manager, Engineering, City of Surrey]

Madam Chair and honourable members of the committee, I am Fraser Smith from the City of Surrey. I'm the general manager of engineering, coordinating our work on our light rail project. I'd like to thank you, Chair and committee members, for inviting Surrey to appear in front of you today. Vince will be joining us in just a minute.

I'm not sure if you have our slides. Those are Geoff Cross's slides. We sent in four slides as well.

[The Chair, Liberal, Judy Sgro]

We have it printed out in front of us and it's apparently behind us as well.

[Fraser Smith]

Perfect. I'll just speak to what you have in front of you then.

Again, thank you, and I'd like to take a moment to introduce the City of Surrey to the committee. We're a city of 520,000 people and growing very fast. In fact, we are one of the fastest-growing cities in the country, and approximately 1,000 new residents arrive each and every month to the city. We'll be growing from our current population of 520,000 people to over 850,000 in the next 25 to 30 years, surpassing Vancouver as the most populous city in British Columbia.

We're also a young and diverse community, both culturally and in economic terms. One-third of our population is under 19, a growing trend that will support our good public transit system.

On slide 2, we can show graphically what our community is. We're in the lower mainland of the Vancouver area. There are 21 municipalities in Metro Vancouver, and Surrey is the largest at over 315 square kilometres. That's bigger than Vancouver, Burnaby, and part of Richmond combined. We're well-connected to the Asia-Pacific gateway, and to the U.S. border, having the U.S. border in the southern area of our community, with the second-busiest truck crossing in the nation.

This context highlights the significance of immediate infrastructure needs facing Surrey and the Metro Vancouver area, and the necessity for meaningful partnership with senior levels of government. Municipalities need the provinces and the federal government to support and move forward on growing infrastructure for our community and for the nation as a whole. The investing in Canada plan provides a framework for that collaboration, and the early funding of projects in Surrey has already flowed and has been very beneficial.

Slide number 4 is an overview of our project which is focusing on the Surrey light rail project, but I'd also like to highlight a number of infrastructure projects that have recently been completed or are currently under way with support from the federal government. Those are identified as the stars on your map, on slide 3, and include the Museum of Surrey expansion, the Surrey Art Centre upgrade, and the Cloverdale Athletic Park and field house construction. We'd be happy to speak to those later on if there are specific questions.

We'd like to highlight our light rail project, which is shown in red. The first phase of our 27 kilometres is 10.5 kilometres and that is in the upside-down “L” shape that you see on the map; and the long section going from the northwest to the southeast is the second extension, 16.5 kilometres, and that goes from Surrey into the township of Langley and the city of Langley as well.

The mayors' council vision calls for construction of the 27 kilometres to connect our communities with both Langleys but also our town centres in Guildford, Newton, and city centre.

Our last slide basically talks about our collaboration with TransLink that we've been doing for quite a number of years now. I also want to highlight what's happening in our community as far as expansion is concerned. We'll be able to serve an additional 200,000 people who will be within walking distance once the light rail project is completed. Since 2006, Surrey and TransLink have collaborated on planning and delivering the light rail early works program funded through PTIF for phase one.

To date, contracts have been let on three early works projects and the fourth one is being tendered. The three early works projects under construction right now include the Bear Creek Bridge replacement, which is replacing a bridge on a six-lane road; extension of the trunk storm sewer at 104th Avenue, valued at about $7.5 million; a new water main in another location to free up space in the road corridor for the light rail project, valued at $2.9 million; and finally, our fourth project, which is relocating some BC Hydro transmission towers, estimated at a cost of about $2.83 million.

These projects are critical to the smooth transition and cost-effectiveness of delivering our larger light rail project, which we're hoping to go out for concession on later this year, and then for the project to start in 2019.

In summary, the construction of the early works is well under way and all the projects are scheduled to be completed by the end of 2018, which will put us in fine form to go on and build the first 10.5 kilometres of the light rail project.

We're happy to answer any questions you may have on our project and where we're at, at this time.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Smith.

We'll go on to Geoff Cross, vice-president, transportation planning and policy, TransLink, from New Westminster.

Welcome. You have five minutes, please.

[Geoff Cross, Vice-President, Transportation Planning and Policy, New Westminster, TransLink]

Thank you, Madam Chair and members. I'll try to be faster than that.

It's an honour to be here to speak about this critically important set of programs for TransLink.

TransLink, as I think you're aware, is the regional transportation authority for Surrey, 20 other municipalities, one first nation, and one electoral area, containing roughly 2.6 million people in the Lower Mainland. We are responsible for both the planning and the management of the movement of goods and people. That includes major roads, a significant number of bridges, the planning for public transit and regional cycling, as well as the delivery of public transit.

Traditionally, federal programs, whether predecessors to the building Canada fund, which is this one, or the investing in Canada infrastructure program, have been critical for us to meet our big city needs, which have very significant infrastructure requirements. As well, there is the role we play as a gateway city to make sure that transportation moves, for people, the economy, and goods.

I'd like to speak a little bit to the public transit program that has been announced and is now flowing and a little bit on the trade corridor fund and our experience with it so far.

We are really ramping up. I'm delighted to say that we are on pace to allocate almost all of the public transit funds that were identified in the federal program, over 11 years. We have the benefit of having a 10-year multimodal vision for the region to get on track to accept the next 1.2 million people who are coming to Metro Vancouver and to make sure that the economy is moving.

We had some pieces in place when the new public transit infrastructure fund was announced and the dollars started to flow in 2016. For us, that bifurcated program whereby upgrades and modernization can be undertaken was very helpful, in that we were able to bring forward projects that were close to shovel ready. They take some time even to go through procurement, etc., as compared with some of the larger projects that Mr. Smith talked about, which take a number of years once the funding puzzle is in place.

This is an overview of the first phase that Mr. Smith talked about, the work that's going on in Surrey. There was a broad range of projects that met the criteria for this “state of good repair”, modernization, and upgrade program.

I'm happy to report that of the $740 million of projects for which the federal government is providing half, 53% are already under contract and so are well under way, for such things as fleet—new SkyTrain cars and a new SeaBus. We've already spent about $157 million of it, and we expect that most of the contracts will be placed by the end of this year. We are on pace to spend all of the $740 million by the March 31, 2020, deadline.

There's a really nice segue in that. You can see that we are planning for both the Broadway Millennium Line in phase one as well as the Surrey LRT. These kinds of projects take significant time to get ready for procurement, roughly $20 million to $25 million of work, which was partially funded under this PTIF program. We're now at a stage at which we have put business cases in to the federal and provincial government, knowing what the costs are going to be and what the full scope of the project is. The federal dollars, through the PTIF program, act as a catalyst to bring the province and the region together to pull all of the funding that's necessary for us to have a fully funded plan.

One difficulty and one benefit of the way TransLink is structured is that we put together 10-year capital and operating plans that are fully funded over the 10 years. If we build a new rapid transit line, we know exactly where the operating costs are going to come from, where all the bus services are going to come from. We also put forward all the road infrastructure, etc. It's good from an outcomes perspective that the federal government knows they are going to get the outcomes you're looking for. It's a holistic plan, but this means that it's trickier to pull together all the funding pieces.

I'm happy to announce that back in March, the region and the province.... The province came up with a deal. The province is basically matching the federal funds at 40% for the PTIF funds.

The region was able to find the sources necessary, so we're looking at advancing that. As I mentioned, we would have 90% of the actual funding that's in that public transit fund, which is about $2.6 billion. Roughly $2.4 billion of the $2.6 billion would be allocated and would start to go under procurement, followed by construction, for completion by about 2025. These things take time.

[The Chair, Liberal, Judy Sgro]

Mr. Cross, I'm sorry. We're just tight for time here.

We'll move on to Mayor Don Iveson, chair of the Big City Mayors' Caucus.

Welcome.

[Don Iveson, Mayor and Chair, Big City Mayors' Caucus, City of Edmonton]

Good afternoon. It's great to be with you. Thank you for the invitation.

As mayor of Edmonton and as chair of Canada's Big City Mayors' Caucus, which brings together 22 of Canada's largest urban centres, I'm very happy to be with you to offer some comments.

Canada's cities are economic and social engines that drive the country forward. We are hubs for innovation. We are the order of government that is closest to Canadians in every way, and we view city building as nation building. When it was launched, the 11-year investing in Canada plan was a historic opportunity for transforming our cities and our country. To realize the plan means turning this opportunity into real outcomes for citizens. To create real outcomes means Canada's cities need funding programs that are designed smartly to partner with and empower local governments.

Thus far, Canada's big cities have had a productive and respectful relationship with Ottawa, and the government has engaged with us on every step of the journey. After all, municipalities are responsible for almost two-thirds of the country's public infrastructure. That open communication has been critical.

Investing in Canada's first phase, covering rehabilitation, planning, and design work, was vital to ensure that our infrastructure was modernized and formed a strong foundation on which to activate the next phase of our bold infrastructure investments. We've welcomed the flexibility shown by Ottawa in offering phase one deadline extensions. This demonstrated the government's understanding of, for example, procurement and contracting requirements that have eaten into the original timelines.

As you will have heard from other presenters to this esteemed committee since you began your hearings last week, realizing Ottawa's phase two plans will require successful federal government negotiations with provincial and territorial governments, some of which are complete. Ours, here in Alberta, are one example.

These bilateral agreements recognize the intrinsic role of local government, for the first time really, by incorporating meaningful cost-sharing arrangements to deliver on large-scale and transformative infrastructure that positions Canada's big cities and improves our ability to compete globally.

Here in our home province of Alberta, Edmonton and Calgary account for two-thirds of the population and even more of the province's economic input. Indeed, cities are Canada's economic engine. Canada's big cities demonstrated to Ottawa that while our fiscal capacity and ability is limited, our strong suit is delivering on expertise, knowledge, and familiarity with our local and on-the-ground needs. By working with Canada's big cities methodically and systematically, the federal government has now adopted a 40% share of cost-sharing for new construction and up to 50% for rehabilitation. It requires provinces to contribute a minimum of 33%. This represents a fair and balanced share of cost allocation, leaving a smaller and more manageable chunk for municipalities to assume.

This approach recognizes not only our local government's fiscal limitations but also the reality that after these projects are built, we tend to assume 100% of the cost of operating and maintenance. By enshrining these principles in bilateral agreements, local governments have the certainty and predictability necessary to make long-term decisions about critical infrastructure. By including allocation-based mechanisms, as we've seen around the transit funding, we've improved predictability and planning, as my colleagues have spoken to.

Ottawa's engagement with Canada's big cities in infrastructure investment has been unprecedented, and we are thankful for Hon. Amarjeet Sohi's appointment as Minister of Infrastructure and Communities. I served alongside Minister Sohi for a number of years at Edmonton City Hall after we were both elected city councillors in 2007. As big a loss as it was to see him move to Ottawa and become a minister of the crown, we are reassured that we have a powerful and understanding advocate for the needs of municipalities around the cabinet table.

In fact, it's my estimation that the literacy of this government when it comes to municipal issues has significantly improved, so I look forward to the committee's questions.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mayor Iveson.

We go to Mr. Liepert, for five minutes.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Thanks to all three of you for being here today.

I want to move away from what we heard, to the purpose of this study. The purpose of the study was for the committee to examine the progress of infrastructure projects to date, the obstacles to the implementation of the projects, and the progress of expenditures in the investing in Canada plan. The Parliamentary Budget Officer, in the report he released, expressed some concern that only half of the $14 billion in phase one has been allocated to projects. Growth has been significantly lower, in terms of our GDP and job creation.

I'd like to ask each one of the three of you, and I'll start with Mayor Iveson, what would be your assessment of the progress on the infrastructure projects and, also, what are some of the obstacles that have been encountered?

[Don Iveson]

I'll start by saying that while I understand the most obvious metric for the Parliamentary Budget Officer is federal cash flow, it's maybe not the best metric for the impact of the program. This is because the dollars flow once receipts are given to the federal government. We have to spend the money first, which is what we're actively doing right now. When projects are complete then we'll remit to Ottawa the appropriate paperwork, and then the dollars will flow. At that point, they will register as having had effect, as far as the federal government is concerned.

However, in our own case what we've been able to do is make assumptions about those dollars flowing, particularly the transit dollars because they come through an allocation-based mechanism. The more certainty we have about dollars flowing our way, the more we're able to proceed with investments. We've been able to green-light planning dollars in the first phase—which we're doing right now, and we will bill the federal government for it—knowing that we will have construction dollars moving in the second phase.

Where the programs are more application based, there's more uncertainty. That's where we continue to advocate for more allocation-based mechanisms, because those will give municipalities the certainty to spend with the knowledge of recovery, rather than have to apply before a project can commence.

So where allocation has happened, the results have created stimulus by imbuing us with confidence to move ahead with projects.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Maybe I'll switch to Mr. Cross.

Can you comment on that?

[Geoff Cross]

Similar to the mayor's comments, now, of that phase one program, we have under contract I think the equivalent of about 53% of the dollars, even though we've only sent invoices to the federal government for less than a quarter of that. We have those contracts under way. As we understand it, the economic activity is going. Our fleet that is being built both in Canada and abroad will be arriving later this year, even if it hasn't been built. There is a bit of a lag time.

The extension by a year for the program was helpful for us. I think it recognized that an infusion of this level of spending doesn't necessarily mean that the regional and provincial entities are ready to go, if the dollars aren't there. There's a ramping up of our internal resources, to be able to do so, to make sure that all of the estimates for projects are current, etc. There's a lot of background work that needs to happen to thus get them out the door. However, once that goes, things can move quite quickly.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Mr. Smith, any comments?

[Fraser Smith]

Yes.

In our particular case, we had about $58 million related to our light rail project. We've been able to actively set tenders for all but one of those projects, and a design is well under way. It's been well positioned.

As Mr. Cross said, we've been able to push that work out. It's a matter of getting our construction done over the next few months, to be able to spend that money.

It's been very successful for us to have the early work to move ahead.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

What about the matching aspect of it?

I know in Alberta's case, Mayor Iveson, that we've had, I would say, very robust public infrastructure spending for the last, at least, 10 years now. Now you layer on significant federal infrastructure dollars that are conditional on matching funds. Has it put any additional pressure on the cities to come up with those dollars?

[Don Iveson]

This is one of the reasons that the federal and, ideally, provincial governments occupying a larger share of the upfront cost allow us to accelerate investment. Expecting municipalities to catch up or stay abreast at one-third, one-third, one-third, while the country is increasing its level of investment, will be challenging. That's why we've advocated for more like a 40-40-20 split.

As you will recall from your time in Alberta, at one point the provincial government here was funding up to 67¢ on the dollar for transit. We've seen 100¢ dollars and 80¢ dollars in Ontario. Prior to federal investment, provinces were investing, in some cases, even much more generously. Now that we have, in most parts of the country, alignment of three orders of government, we have a sustainable pathway forward, recognizing if we're going to exponentially increase the size of the inventory, it still falls to municipalities to manage 100% of the cost of operations and maintenance. In fact, a bit of additional federal flexibility to provide dollars for up to 50% for major maintenance is also helpful because it starts to reduce the burden on municipalities for that long-term operating and maintenance.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mayor Iveson.

We'll go to Mr. Hardie.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Thank you, Madam Chair.

I think I will direct the first question to Vince Lalonde, city manager of Surrey, B.C. Welcome to the committee today, Vince.

I found it quite interesting that it wasn't really all that long after October 2015 that Minister Sohi was in Surrey announcing a fair bit of money that had been allocated by the previous government that I think was going to go into basically water and sewer systems, etc., right across B.C.

Why did that happen so quickly? Why was Surrey there ready to go?

[Vincent Lalonde, City Manager, City of Surrey]

I think we may not be unique in this, but all cities have a heavy infrastructure demand so we typically keep on our books some designs that are shovel-ready. Certainly, when there was availability for funding, it was something we really welcomed.

I think further to that, as Mr. Smith was talking about earlier, the fact that we were able to get some early money in PTIF 1 to do some early works for our project will definitely ensure the rest of the project is smoother and more cost-effective.