Transport Committee on April 30th, 2018

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I'm calling to order meeting number 101 of the Standing Committee on Transport, Infrastructure and Communities of the 42nd Parliament. Pursuant to Standing Order 108(2), we are continuing our study providing an update on infrastructure projects and the investing in Canada plan.

Welcome, Minister Sohi. We're very glad that you are able to join us today, along with your officials.

I turn the floor over to you, Minister Sohi.

[Amarjeet Sohi, Liberal, Minister of Infrastructure and Communities]

Thank you, everyone, and good afternoon. Thank you for inviting me once again to talk about our long-term infrastructure plan. It's nice to be back. I'm joined by my staff members, who will assist us in the presentation and in answering the committee's questions.

I know that you have been hearing from many different organizations and people including the Parliamentary Budget Officer in doing your study. I want to thank you for conducting this study, because it's going to help us understand the importance of infrastructure.

I'd like to address some of the concerns that have been raised during those presentations.

During the Parliamentary Budget Officer's appearance, the committee asked about the risk and history of lapsed funding. Let me assure all of you that infrastructure funding does not lapse. Money that goes unspent in a given year is re-profiled to future years to ensure that it remains available for the projects and the programs to which it's allocated.

Our partner organizations know and understand this, and you have heard from some of them. The FCM, FQM, and the Association of Municipalities of Ontario all noted that they are not concerned about how federal funding flows to projects. They did, however, note the quickness with which bilateral agreements are being signed, considering the complexity. They know that as soon as decisions are made, projects can start immediately.

When we were developing our investing in Canada infrastructure plan, we worked in very close collaboration with those organizations, as well as with our provincial, territorial, municipal, and indigenous partners. From these consultations came our plan, designed to help grow the economy, build inclusive communities, and support a low-carbon green economy.

Our plan is being rolled out in two phases and delivered by 14 federal departments. The first phase involves 34 programs and is $14.4 billion. All of these programs are now launched, and more than 28,000 projects have been approved, for a federal investment of more than $11 billion.

Let me give you a few examples of what this means for our communities.

Aboriginal head start is an important program that focuses on childhood development for first nations, Inuit, and Métis children and their families living off reserve. Under the first phase of our plan, 100 sites across Canada have completed projects that enhance accessibility, health, and safety, provide outdoor learning opportunities, and address special needs. More than 4,000 children and their families are benefiting from these investments, gaining knowledge of their indigenous culture and language in spaces that are healthier and have access to up-to-date learning tools.

In New Brunswick, federal investments through Natural Resources Canada have helped to create the province's first electric vehicle charging network. Electric vehicle owners are now able to drive worry-free while helping to reduce our carbon footprint.

In Vancouver, more than 40% of the SkyTrain's stations have now been outfitted with radio frequency identification technology, allowing customers who are physically impaired to pass through the fare gates unassisted.

In Edmonton, my home city, recent upgrades to Balwin Place provide 25 much-needed new affordable housing spaces to support our most vulnerable citizens. These spaces represent a safe haven and stability for families, providing them with the opportunity to be a student and learn, to be a neighbour, to find work, and to connect with the community.

While supporting these early projects, we're working closely with our partners to develop a long-term plan to support large-scale projects that require longer timelines to plan and design. My department is now working closely with our partners to sign the bilateral agreements that will flow $33 billion over the life of this plan.

Employment and Social Development Canada has signed almost all of its bilateral agreements with provinces and territories under the $7 billion early learning and child care program.

I'm also proud to say that today Minister Duclos signed the first ever housing strategy, long-term housing agreement with the Province of Ontario. Transport Canada has launched its $2-billion national trade corridors fund and is reviewing more than 100 project applications from across Canada.

As you have heard from the mayor of Edmonton and chair of the Big City Mayors' Caucus, Don Iveson, we listened to municipalities. We value local government as partners, and they know that. By investing in improved transit services, we are giving families more time together. By investing in upgraded water treatment facilities, we are giving parents peace of mind that the water their children drink is safe. By investing in affordable housing, we are giving women and children fleeing domestic violence a safe place to live.

We're eager to build on our successes, and continue to invest in the infrastructure projects that will make real differences in the lives of Canadians from coast to coast to coast.

Thank you so much for having me.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Minister Sohi.

On to our committee questions, and Mr. Chong.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Thank you, Minister, for appearing before us today. I have just a couple of questions for you.

Will you admit that your government's plan for infrastructure hasn't met its targets in terms of job creation and GDP growth?

[Amarjeet Sohi, Liberal, Edmonton Mill Woods, AB]

When we look at the economic growth that our country has experienced over the last two and a half years, the highest economic growth in the last 40 years, more than 600,000 jobs that have been created by lowering taxes for the middle class, by investing in families with children to give them more resources to help pay for the high cost of raising kids, and the $11 billion that has been invested or approved for communities across the country to build better public transportation systems, affordable housing, or early learning, and waste-water infrastructure, we are very confident that our plan is working. It is making a difference for Canadians. It is helping grow our economy. It is helping build better sustainable communities, and we are proud of the investment we are making.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Well, Minister, the government's budget of a couple of years ago projected 0.6% GDP growth because of its infrastructure investments, which is roughly $12 billion a year, but the PBO says that we can only expect about 0.2%, one-fifth of one per cent of GDP growth, which is only $4 billion a year, as a result of these infrastructure investments. Therefore, we've lost half a per cent of projected GDP growth because of the government's inaction on infrastructure.

In terms of jobs, the PBO reports that only about 11,000 in the last year can be attributed to the government's infrastructure plans. There again, that is far less than what was projected in the government's own documents several years ago.

I'd also say that the much-touted figure that Canada has the best GDP growth in the G7 is somewhat misleading, because we don't have very good per capita GDP growth. At the end of the day, if you've got high rates of population growth, that masks per capita GDP growth. It you look at our per capita numbers, it's roughly half of one per cent over the next three years, on the government's own GDP projections. It's actually quite abysmal GDP growth, and that's the reason why Canadians are racking up so much household debt, just to afford the cost of living.

I want to ask you another question. Will you admit that at a minimum, the government hasn't been forthcoming with information on infrastructure? The PBO has reported that it was difficult to get information from government departments and agencies. It reported in March that only some 10,000 projects were identified in phase one of the government's plan, and then on April 19, you came forward with more information that some 20,000 projects had been identified. Every several months, there seems to be new information that's different or that changes the story.

Our worry, as members of Parliament, is that the government doesn't have a handle on its $188-billion, 12-year plan. It's one of the largest initiatives of the Government of Canada, and we don't have a great deal of confidence that the various departments and agencies of the government have a good handle on the overall plan, where the money's going to be spent, and how we're going to ensure the maximum return for Canadians' tax dollars.

[Amarjeet Sohi, Liberal, Edmonton Mill Woods, AB]

first of all, thank you so much for acknowledging that this is a significant amount of investment that we are making in Canadian communities, $180 billion, doubling what has been invested in the past. We update information on a regular basis based on the information we receive from our partners.

As you can appreciate, the projects we fund are municipal and provincial, and they are the ones that procure and build those projects. We rely on the partnership and rely on regularly updated information, and whenever we have the information we update that on our website. You can please visit the website as well.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

I appreciate that, Minister, but something you said in your opening remarks just corroborates what I've been saying. With respect, you said in your opening remarks that infrastructure funds do not lapse, but during the election you and your party said that they do lapse. In fact, on page 14 of your party's platform during the last election you acknowledge that infrastructure funds do lapse.

You were quite critical of the previous government's allowance of that measure and you promised you would make sure that no money intended for infrastructure in communities is allowed to lapse, and that you would automatically top up the gas tax transfer at the end of every fiscal year to ensure that no money is allowed to lapse.

I hope you can understand our confusion as parliamentarians when we hear one thing one day and another thing another day. It makes it very difficult for us to hold the government accountable for what is a huge spending priority of the government.

[Amarjeet Sohi, Liberal, Edmonton Mill Woods, AB]

The only time infrastructure funding lapses is when it is not tied to a project or a program. We had a situation where we did transfer $30 million to gas tax funding because that $30 million was not tied to any specific project or any program.

I am very proud of the partnership that we have been able to establish with our municipalities, provinces, the non-profit sector, and indigenous communities. They are very pleased with the approach we have taken, and we have heard from them directly. Some of them have made presentations to you.

We are here to work on behalf of Canadians. We are here to deliver infrastructure to make life better for Canadians, and that's exactly what we are doing. The examples I've cited illustrate how a better waste-water system is giving communities clean water, or improving the accessibility of infrastructure.

[The Chair, Liberal, Judy Sgro]

Mr. Iacono, you may go ahead.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

Thank you, Madam Chair.

Minister, if you'd like to finish what you're saying in response to the opposition member's question, I'd be happy to give you some of my time.

[Amarjeet Sohi, Liberal, Edmonton Mill Woods, AB]

If you will allow me, I would like to convey my deepest condolences to you on the passing of your brother. It's a very difficult time, and please know that we all stand with you and your family.

The reason we focused so much on infrastructure along with other initiatives is to make sure that our economy thrives by having a long-term plan in place that unlocks not only people's potential but economic potential to help create jobs, 600,000 new jobs. Those jobs are real for people. A laid-off worker who goes to work is able to feed the family. One job means a lot for that particular family, so 600,000 families have been impacted positively by those jobs, and by having a better public transportation system that allows you to spend more time with the family instead of being stuck in traffic. Also, recreational and cultural facilities allow communities to have healthy lifestyles for people living in those communities.

Those are meaningful investments that touch on peoples' lives, and we are very proud that we are making these investments.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

Thank you, Minister.

Budget 2017 sets out $33 billion further to bilateral agreements between Infrastructure Canada and the provinces and territories.

Can you tell us how many agreements have been signed so far, as well as where things stand for those still being negotiated?

[Amarjeet Sohi, Liberal, Edmonton Mill Woods, AB]

One of the reasons I ran for federal office was to advocate for sustainable, long-term, predictable funding for municipalities. I come from a municipal background. For the last decade or so, municipalities have been asking for long-term, sustainable, predictable funding. We are very proud to deliver that. We are in the middle of negotiating bilateral agreements, 10-year plans. We have signed agreements with seven provinces and territories, and a number of other provinces will be signing agreements very shortly. Negotiations are progressing with the rest of the provinces.

This is transformative. This gives certainty and predictability. It allows municipalities to know how much money they will get for the next decade so they can build their public transportation systems or the recreational culture infrastructure they need. Our partners have asked for this, and we are delivering.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

Thank you.

To date, more than 28,000 projects have received approval, more than 2,100 of which are in Quebec. In my riding of Alfred-Pellan, more than 70 projects have been given the green light.

Can you tell us how projects are selected and approved?

[Amarjeet Sohi, Liberal, Edmonton Mill Woods, AB]

We take pride in the partnerships we have been able to establish with the provinces and municipalities. As the federal government, we do not select projects. It is up to the local governments to determine their priorities. We respect municipalities' ability to select projects. All the 28,000 projects that I have talked about have been selected and prioritized by local governments in partnership with the provincial and territorial governments. We respect that because we understand that local communities know better, instead of Ottawa dictating what local communities need. We rely on local communities to tell us how Ottawa can be a partner in delivering on the aspirations of local citizens.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

Do certain kinds of projects take longer to approve? If so, why?

[Amarjeet Sohi, Liberal, Edmonton Mill Woods, AB]

The project approval depends on the complexity of the project. We have approved our process. We have streamlined the information we require. We share more information with our partners to let them know how to apply and what information is required. We are working with FCM and other provincial associations to share more information. We don't hold up projects at our end, we just make sure that projects are helping to meet the objectives of growing the economy and other objectives we have, such as building inclusive, accessible communities, or moving to our low-carbon economy. Those are the criteria we apply, and our process is very streamlined. We haven't had any concerns communicated by our partners about the delays in the approval process.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

Thank you, Minister.

[The Chair, Liberal, Judy Sgro]

Ms. Sansoucy, you're next.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

Thank you, Madam Chair.

Thank you very much, Minister, for being here.

Further to the parliamentary budget officer's economic and fiscal analysis, I felt the need to put forward a motion, which is what led the committee to do this study. I'd like to thank the committee members for supporting that motion.

As the new critic for infrastructure and communities, I need to gain a better understanding of certain things, as we all do, for that matter. Your infrastructure promises have given municipalities, provinces, and territories great expectations.

Today's study is important because it will help set the record straight as far as meeting those expectations goes. Before becoming an MP, I was a city councillor. Municipalities have a very clear understanding of their infrastructure requirements. They know exactly what new infrastructure they need. They have plans for upgrading existing infrastructure. The same goes for provinces and territories. Quebec has long had five-year infrastructure plans, and municipalities are always eager to find out what those plans are.

All that to say this is an important study.

I'm going to pick up on my fellow member's question about the bilateral agreements. You answered it in part, but I'd like to know whether you have set a deadline for signing all of the agreements.

Construction season is around the corner, but, as you said in your presentation, projects cannot get under way until the agreements have been signed.

What impact will those delays have? What steps are you going to take to minimize the repercussions on cities and municipalities?

[Amarjeet Sohi, Liberal, Edmonton Mill Woods, AB]

First of all, I want to again thank you for the motion as well as the committee's willingness to do this study. We're looking forward to the recommendations. We want to be open, we want to be transparent, and we want to work with other colleagues to improve where improvements need to be made.

On the bilateral agreements, I want to assure everyone that whenever we get an application for an assessment of a project, we don't hold that project back because we don't have a signed bilateral agreement. To be very clear, we have actually approved projects prior to signing a bilateral agreement, based on the needs of our provincial and municipal partners. Rest assured: no project will be held back as long as our partners are ready to advance those projects.

We had an aspirational date of March 31 for us to be ready to sign bilateral agreements, and we are ready. We have been ready for the last number of months. The issue is just one of timing. As you can appreciate, a number of provinces have gone through their budget processes, and one province in particular has gone through a leadership change. We want to give them time so that they're ready to sign those bilateral agreements. From a federal perspective, we're ready whenever they're ready, but we respect their timeline and we want to make sure that they are ready to sign as well.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

I still had a question after your April 19 update. You talked about the proportion of projects that had gotten under way relative to approved projects, which varies widely from one program to another.

For example, under the Canada Mortgage and Housing Corporation's doubling investment in affordable housing program, less than 6% of approved projects have begun, which is very low. I'd really like to understand why. Earlier, you explained the delays, but the needs when it comes to affordable community housing are tremendous. The Federation of Canadian Municipalities told us that urgent action was needed on that front. I have the most questions about that program.

[Amarjeet Sohi, Liberal, Edmonton Mill Woods, AB]

Within our first-phase investments of $14.4 billion, 28,000 projects have been approved. Out of those 28,000, close to 20,000 projects are actually under way, which means that the work is being done. Thousands of housing units are being renovated.

As you can appreciate, the first phase of investment was focused on repairs and the rehabilitation of the existing infrastructure. The vast majority of the phase one funding has gone to fixing what we already have. That work is being done in affordable housing, shelter rehabilitation, transportation rehabilitation, and water and waste-water infrastructure rehabilitation. I'll ask my ADM to update you.

[Yazmine Laroche, Associate Deputy Minister, Office of Infrastructure of Canada]

Madam Chair, if I may, I'll just add a little bit of detail.

I'll provide a bit more detail on what was in the 2016 budget.

As for the Canada Mortgage and Housing Corporation, 15,000 projects have been approved, 10,000 of which have already begun. We can get you more information on that, if you'd like.