Transport Committee on Feb. 9th, 2017

[The Chair, Liberal, Judy Sgro]

Thank you very much, Minister.

Mr. Fraser.

[Sean Fraser, Liberal, Central Nova, NS]

Thank you very much.

I'll be sharing my time with one of my colleagues, Mr. Badawey.

I want to touch on some of the issues you raised in your introductory remarks and perhaps follow up on the line of questioning Ms. Watts launched into with respect to the impact of infrastructure funding on smaller communities.

I'm an Atlantic Canadian. My riding consists largely of small towns and rural communities. I was hoping that you could give us some background on how the infrastructure bank might apply to smaller communities or, more generally, on how the use of the infrastructure bank in the bigger cities would free up resources that could then apply to smaller communities like mine on needs like water, waste water, public transit, and recreational or social infrastructure and the like.

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

First of all, I want to share with you that since November 2015, almost 15% of the projects we approved were in smaller communities.

As far as the bank is concerned, the projects that could potentially be funded by the bank will have benefits not only in the community where the project is located but in the surrounding communities. For example, transmission infrastructure benefits everyone.

You are absolutely right, though, in that if we don't look at innovative ways of financing infrastructure, then we tie up resources that could be freed up for smaller communities. That's why we were able to create the $2-billion small communities fund. That's why we have transit money available for smaller and mid-sized communities and for water and waste-water infrastructure.

You are absolutely right. The more we can do with the private sector on revenue-generating infrastructure, the more it will free up resources of public dollars that we can use to build infrastructure where there's no revenue attached to it.

[Sean Fraser, Liberal, Central Nova, NS]

I'll jump in there. With the expected increase in infrastructure spending in smaller communities that don't necessarily have the asset management expertise that Canada's biggest cities do, what kind of assistance is going to be available to ensure there's a plan in place for these smaller municipalities to deal with the increased volume in infrastructure spending?

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

That's a very good point. We have created a fund, in partnership with the Federation of Canadian Municipalities, that was announced last week. The purpose of that fund is to build the capacity of municipalities to better manage the assets they own so that they know what conditions there are and also to build the capacity of the municipalities to apply for funding.

Another thing we are doing, as I mentioned earlier, is that the $2-billion fund will be dedicated for smaller communities so they don't have to compete for funding for their smaller projects. They will still be eligible for funding under other infrastructure plans, but this plan will be dedicated.

We are also looking at engaging with smaller centres to learn more about the capacity challenges they are facing and how the federal government can play a role, in partnership with the provinces, to build the capacity of those smaller centres.

[Sean Fraser, Liberal, Central Nova, NS]

Thank you very much.

[The Chair, Liberal, Judy Sgro]

Mr. Badawey.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair.

I want to express my appreciation, Mr. Minister, for your recognizing the importance of working with municipalities, aligning the strategies, helping to finance those strategies, and becoming an enabler to bring forward new smart city initiatives.

With that, we are aware that we have a lot of new ways of doing business with respect to the self-aware infrastructure, assets that direct their own consistent assistance, and most importantly, a disciplined budgeting process.

With that, Minister, are you going to be looking in the future at allowing bundled applications to come in? Then, municipalities, when they put an application in for infrastructure funding, they can bundle an application based on a community improvement growth plan instead of just applying for one project.

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

We are open to new ideas. One thing we want to do when we sign bilateral agreements with the provinces is to encourage regional planning, or regional considerations, or how land use planning, transportation, and community infrastructure integrate with each other. We will be open to all those ideas when we negotiate the long-term plan.

One thing we heard from our municipal partners, whether they are smaller centres, mid-size cities, or large urban centres, is that the past, ad hoc approach to federal support is not something they want. They want long-term planning, they want long-term sustainable funding, and they want certainty in their funding. That's exactly what my role is for the long-term plan as we roll it out, to give them that certainty.

[Vance Badawey, Liberal, Niagara Centre, ON]

That's great news. What I'm getting to, Minister, is the fact of having the municipalities, through their processes and their strategic initiatives, put in a long-term plan three, five, or 10 years down the road. Some call them community improvement growth plans. Of course, the expectation is to finance a very large budget, because they are and can be very large budgets, and to have the ability to then have sustainable funding over a three-, or five-, or 10-year period to actually satisfy those recommendations.

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

The goal is to give them a 10-year plan.

[Vance Badawey, Liberal, Niagara Centre, ON]

That's great.

Thank you, Madam Chair.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Rayes.

[Alain Rayes, Conservative, Richmond—Arthabaska, QC]

Thank you, Madam Chair.

Mr. Minister, my thanks to you and your colleagues, who support you in this work, for being here with us today. Since my questions are about the Infrastructure Bank only, I would like your answers to follow suit.

Can you confirm whether $15 billion of $35 billion earmarked for the Infrastructure Bank comes from the budget previously announced in 2016?

Is that really the case?

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

This is on top of what we announced in budget 2016. In budget 2016 we announced $120 billion of a new plan—

[Alain Rayes, Conservative, Richmond—Arthabaska, QC]

Very well. You answered my question.

Yes or no, will the additional $20 billion come from the sale of government assets?

[Jean-François Tremblay]

No.

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

The $15 billion for the bank is on top of what we announced in budget 2016.

[Alain Rayes, Conservative, Richmond—Arthabaska, QC]

Okay. Thank you.

During the discussions, it was mentioned that, for the projects authorized by the bank to be profitable for investors, the projects must be over $100 million. There was even talk of projects of more than $500 million in the various discussions that took place. Just now, in response to Mr. Aubin’s question, I heard Mr. Tremblay say that the projects that will dictate decisions will be those able to attract investors.

At the same time, let’s look at the document produced on the middle class in the fall, the economic statement.

Mr. Minister, in your presentation, you said that the projects you will want to handle with the $15 million are green infrastructure projects, social infrastructure projects in various communities, transit projects and projects in rural and northern communities. Is that correct?

Could you tell me how a small municipality in a region—say, for instance, Daveluyville in my riding, which has 2,000 residents—could have access to a grant, a loan or any financial assistance from the Canada Infrastructure Bank, for a water filtration plant project, which is essential for the development of its small economic park and of the community? That would allow investors to have their piece of the pie.

Let me point out that, before being elected as an MP a year and a half ago, I was the mayor of a municipality with 45,000 people, which is in the centre of my riding. I can tell you that never in my life have I seen any projects that could generate profit for investors in those sorts of municipalities. They are in large centres such as Montreal, Toronto or Vancouver.

Can you answer my question?

Mr. Tremblay could confirm what I’m saying. Based on what he said, attractive projects are needed for investors. What will happen in the small municipalities?

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

Thank you so much for—

[Alain Rayes, Conservative, Richmond—Arthabaska, QC]

Just give me one example of a project that could be profitable for investors in small municipalities. Just one example, that’s all.

Your colleagues can help you find one.

[Voices]

Oh, oh!

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

First, let me be absolutely clear that any waste-water project that a community needs will be eligible for funding under the many other streams that are available to your community. The bank is not—

[Alain Rayes, Conservative, Richmond—Arthabaska, QC]

Mr. Minister, I'll have to interrupt you.

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

The bank is not—