Transport Committee on March 7th, 2016

[Linda Duncan, NDP, Edmonton Strathcona, AB]

I have a very quick question about the 50%. I think one of my colleagues has already raised the question.

Through you, Madam Chair, the Federation of Canadian Municipalities wanted the portion from the federal government to be increased to 50%. Of course, we a have number of jurisdictions, including the jurisdiction of Alberta and others, that depend on resource revenue and are struggling and probably can't provide the one-third.

I think that somebody asked the question—certainly, the mayor of my city has raised it—of whether the federal government will move to increase to 50% for projects and to cover full capital costs.

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

Through you, Madam Chair, as I said earlier, we have heard from municipalities across the nation that their capacity to match one-third of the funding required for any project is very limited. As you know, and as many of the people who have been part of the municipal councils or pay attention to municipal needs know, they collect less than about 10¢ of every tax dollar that we Canadians pay in taxes.

We understand that limitation in their capacity to match funding, but what would that additional support be from the federal government? We want to design that in consultation with the Federation of Canadian Municipalities. We want to do that in consultation with the cities, as well as the provinces. We can provide additional support, but there are more resources required at the other end, too. For example, provinces still need to contribute. Even though the municipal portion may go down, provinces still need to be at the table.

The approach I am taking is not a top-heavy approach where I impose the solutions. I think that would fail. What we need to do is work with them and see what the appropriate level of support is from the federal government, and then do that in consultation and collaboration with them.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

I read very closely the Emerson report. Of course, some of it crosses into your portfolio, Mr. Minister.

I was particularly interested in the section on the north. It seems there are two conflicting interests and recommendations there. One is saying that we should hear from the people of the north, including the indigenous communities, on what the priorities should be for infrastructure dollars. An opposing one says that what we should do is prioritize some nation-building projects.

I wonder where you're going to fall on that. My colleague spoke about smaller communities, and of course, that's what they are in Canada's north. They also have critical issues dealing with climate mitigation and so forth. How will we make sure they get their fair share of the pie?

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

Thank you for that question. Through you, Madam Chair, I will comment on the capacity issue, and I will ask the deputy minister to talk more about the Emerson report.

We have heard from our territorial partners and had conversations with some of my colleagues from northern communities. Again, this ties into the existing building Canada fund. We are looking at some options for how we work the small communities component and the provincial-territorial component. We can possibly combine them.

Every community in the north is a small community. Having a provincial program that has a different set of requirements and having a small communities program that has a different set of requirements doesn't make sense. We are looking at this, and we are having some conversations with them about how we can actually improve that and maybe bring two programs together.

Another thing that we have for the north is a federal contribution of almost 75% for all projects, and the territories contribute 25%. Another relates to the design capacity of northern communities. We can do some of the planning work that is sometimes difficult for them to do.

We're listening to them and we're working with them to have that flexibility that I talked about earlier. I want to repeat that the cookie-cutter approach is not something that is helping diverse communities.

[The Chair, Liberal, Judy Sgro]

You have one minute left, Ms. Duncan.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

I have a quick question. Maybe your deputy can answer. It's the question of when is “north” north? I also noticed that in the report they recognize that for some of northern Ontario, Quebec, the prairie provinces, and maybe even B.C., there are isolated aboriginal communities that have problems with ice roads and so forth. I'm wondering if you're looking at those together.

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

Yes, we are.

[Jean-François Tremblay]

Yes. Most of the time when we say “the north” we talk about the territories, because of the special relationship we have with them, as you know, from a constitutional perspective and a historical perspective. But there's the issue of remote communities. That would apply to the north of Quebec, the north of Newfoundland and Labrador, of course, and it would apply to the north of Manitoba, for example.

On your questions on the Emerson report, I'm not sure that it's actually a contradiction. I think what the report is saying is that you need to hear the needs of the community, but if you want to answer their needs, you're going to need national projects in some cases. For example, if you do transportation corridors, how do they benefit the small communities there? If they increase traffic—maritime traffic happens in the north, as some suggest—what would be the consequence of this development on the small communities?

One thing he mentioned is also about passengers in the north and the cost for transportation. He kind of admitted, given the small communities and the size of the communities, that it needs a national kind of support in that aspect.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Badawey.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair.

Once again, I appreciate the questions and comments.

I was a mayor for the past 14 years, and I'm sure some of my colleagues have been for quite some time as well. We recognize the needs. Quite frankly, again, congratulations on being very consistent with those needs. You're listening not only to the FCM and to some extent the provincial organizations, but obviously, based on your comments and your answers, you're hearing a lot from the mayors of big and small communities. Again, in terms of your comments, it's consistent with what they're saying.

In regard to focusing, this is what we hear a lot of at the municipal level. We hear about focusing on how infrastructure investments are becoming economic enablers, not only with respect to economic development but also with respect to sustainability within our communities, within asset management, lifespan, repair and maintenance, and of course, eventually and inevitably, replacement.

As I mentioned earlier, Mr. Minister, with respect to transportation, for example, transportation corridors and investing in those areas, ports, and of course border regions and border gateways, you once again correctly identified in your comments and answers additional investments that lend themselves to economic sustainability.

With that, Mr. Minister, the 2016-17 main estimates propose a 5% decrease in the planned spending by the Jacques Cartier and Champlain bridges, as was mentioned earlier, incorporated with a related reduction in the project scope for repairs to the ice-control structure and the Bonaventure Expressway. In what manner did the project scope for repairs to the ice-control structure and the Bonaventure Expressway decrease?

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

I'll get my staff to comment on some of the technical and detailed financial aspects of your question, but I want to make one point. The way the funding flows for projects is different for capital projects than it is for operational projects. The capital projects take multiple years to finish, so money might be allocated in one year but may not be spent that year. It may be transferred over to the next year, and then it gets re-profiled in the next year.

That way, some of the numbers don't match in that sense, even though the overall project cost is the same and the amount of money being spent is the same. How much money gets spent in year one, year two, year three, or year four differs from year to year, depending on when the bills come in from other partners.

I'll ask the staff members to comment on some of the detailed numbers in the estimates.

[Helena Borges]

In fact, it's exactly what the minister is saying. The scope of the project hasn't changed; it's when the money is actually being utilized that it's being re-profiled to a forward year. In these big projects, often just the weather gets in the way. Unfortunately, during certain periods of time in the year, you can't do the work that you had planned to do, so it has to be deferred to the following year.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you.

In the same vein, the 2016 Canadian Infrastructure Report Card says that 62% of large municipalities, 56% of medium-sized municipalities, and 35% of small municipalities reported having formalized asset management plans, more towards the capital side, as well as, I'm sure, during that time frame, looking at lifespan as well as replacement. Those plans include bridges and roads, all the way down to water and sewer and CSO programs, and again, both capital and operational.

To what extent will Infrastructure Canada's work on enhancing municipal capacity in asset management take into account these different and existing asset management capacities? That's question number one.

Question number two, what are some practical ways in which those requirements for formalized asset management plans can be imposed on recipients of federal infrastructure funding?

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

I want to acknowledge the work that the FCM did on this report in identifying the gap in the repairs that have to be done in existing infrastructure. It also identified the lack of capacity on the part of municipalities to do the asset management or proper planning, in addition to having proper data to analyze all that information. Some municipalities have done a good job, and some have not. It's these kinds of investments that get reduced when times are tough.

We want to look at the role the federal government can play, where municipalities can rely on us to have that support, where they can actually dedicate resources to do the kind of analysis that is necessary to understand the state of the infrastructure they have.

As MP Watts mentioned earlier, on the maintenance of the infrastructure, optimization of the infrastructure, and how we actually pay for that infrastructure, municipalities need to grapple with those questions in order to build long-term sustainable plans. We want to assist them by providing some sort of dedicated support that will enable them to draw from the federal capacity to do that kind of analysis.

If we don't do that.... I fundamentally believe in this. Our department officials have had quite a bit of back and forth discussions. We need to understand the state of infrastructure repairs in each community. Otherwise, we will never be able to deal with the big deficit that we have in infrastructure. We don't even know how big that deficit is. Different reports tell us different things. We need to have better data. We need to build the capacity of communities. Hopefully, through this budget process and discussions, we will be able to show some support to municipalities in order to do so.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Minister.

Mr. Hardie.

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

Thank you, Madam Chair.

Like many members, I spent some time at home last week. I was very pleased to have a visit from our local YMCA. I was surprised to find out that as an organization, it is probably the number one provider of child care across Canada. It has wonderful facilities and really good staff.

As my colleague from South Surrey—White Rock indicated, everybody is looking for a direct pipeline to the federal government to make their appeal for some very worthy projects. Understandably, we have to follow protocol, but I'm asking for some advice.

What can I say to the folks from the YMCA? What kind of mechanism would it follow, or could I follow as its representative, to ensure that its voice is heard when it comes time to allocate funding for things like child care?

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

One of the things we have done is to meet with various stakeholders from the housing sector. I understand that Minister Duclos' area is also engaging the non-profit sector to seek their input into the design of not only the housing strategy but also the long-term early learning care strategy.

I can take that back with me. Thank you for that suggestion. This is something we have to grapple with. If we want to support local community infrastructure, how do we engage with non-profit sectors that provide the kind of facilities and services you're talking about, that align with what we want to do as a federal government under social infrastructure, whether it's housing or child care facilities? I'll take that back to Minister Duclos and convey it to him. I'm pretty sure he's doing that already.

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

Thank you, Minister.

I have a further question, and this may be a far more difficult one. We obviously want to accomplish things with this heavy investment, and I asked you a little earlier about ways that we could see these investments produce results that help build the economy, etc. When the Prime Minister spoke in Edmonton almost a year ago at the Federation of Canadian Municipalities—he wasn't Prime Minister yet, but he was working on it—you didn't have to have a picture of the mayors to see them nod when he talked about predictable funding.

Predictable funding can extend not just beyond the municipalities as they go through their procurement, but the benefits extend to the people they do business with. For instance, in my former life in metro Vancouver's transportation authority, we were often sensitive to the sudden influx of orders that we would place with Nova Bus or New Flyer, or with a shipyard to build a new SeaBus.

One of the things that could come from predictable funding is predictable orders. I'm wondering if there's been some discussion that would see that kind of ripple effect go through to our manufacturing sector.

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

We haven't done that kind of analysis yet, but you raise a very valuable point.

Long-term, sustainable, predictable funding not only assists the municipalities to plan for the long term, but also execute those plans for the long term, because it gives them predictability.

It also ties in to the economy as well. If our businesses know that in a certain community an investment into public transit will be done over a number of years or over a 10-year plan, then they can definitely build that capacity to bid on those projects because they know work will be available for those 10 years. It's the same thing with social housing and waste-water drainage.

You're absolutely right, and we can definitely do some analysis on that and how it sustains economic growth and how it helps us live with the downturn as well.

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

So we don't get the dolphin effect.

I have one final quick question. What is the state of P3s in the country? We removed the screening, but do we have a lot of capital sitting there waiting to participate in that manner?

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

You can touch base on that, but we can get back to you.

I understand about $200 million is left in the P3 Canada fund. It was a $2-billion program over a number of years, but the vast majority of the money has already been allocated.

One thing I want to show every one of you is that our removal of the P3 condition is not affecting any of the projects that are under way or that have been signed. Again, it's the local communities' decision. There are no additional requirements on municipalities to do this and there's no impact whatsoever on existing or future projects.

A few hundred million are left in the P3 and P3 Canada still exists, and municipalities can still apply to that corporation for funding.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Berthold.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Thank you, Madam Chair.

I have one last question about tolling and the Champlain Bridge.

There was something that had slipped my mind, and now I've put my finger on it. Negotiations are under way with the Signature on the St. Lawrence Group regarding the elimination of the toll. My understanding was that the $4 billion represented the cost of the construction over the next few years.

What still has to be negotiated with the Signature on the St. Lawrence Group?

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

I'll ask my associate deputy minister to answer that question.

[Helena Borges]

The agreement with the private sector covered the toll infrastructure that had to be built, such as the gates and electronic system. But since the bridge is going to be toll-free, those items are going to be deleted from the contract and the government will save some money on project construction.