Transport Committee on April 27th, 2021

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. Gemmel, and thank you, Mr. Barsalou-Duval.

We'll now go to the NDP.

Mr. Bachrach, you have the floor for six minutes.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair, and thank you to our witnesses for appearing today. It's great to continue this discussion. It has been an interesting one so far.

It's especially good to see my friend, Mr. Frizzell, from Prince George, a mere four-hour drive down the road. In our part of the world, that pretty much constitutes being in the same neighbourhood. I'd like to start with Mr. Frizzell.

As someone who worked in local government for over a decade, I've sympathized with local governments for their plight in the pandemic. My first question is the following. When it comes to infrastructure, could you lay out for the committee the impacts of the pandemic on the municipal sector?

[Garth Frizzell]

Certainly, and thank you, MP Bachrach. The honorific used to be “Your Worship”, but I'm not sure right now.

It's been substantial, and it has been gutting to our budgets. With the transit fund, over the last year, with ridership down 70% to 90%, we were in serious trouble all across the country, and our operating budgets took a hit. What that meant is that we immediately had to swing into action by cutting our infrastructure. In Prince George, for instance, $25.9 million in projects that we needed—roads, water, other projects—had to be put aside and put off.

In the fall we really welcomed the safe restart program. The impact that had on operating budgets was substantial and important.

The knock-on effects of putting off or cancelling infrastructure projects are substantial. What we saw were the jobs that would have come in through those construction projects. We also saw that things we needed to get done are not being done across the country. When you slow down the economy because of a pandemic, you slow down infrastructure because of the pandemic. These aren't projects that are want-to-haves; these are need-to-haves, so yes, there has been a substantial impact across the line.

I want to say that in particular it's really highlighted some of the cracks in our broadband. The digital divide was really highlighted, because we needed to have a stronger reliance on the Internet all across the country for health care and education, and in our case, for provincial government services, like applying for a ballot to vote in our local election. This is substantial, and it's important, and it has been highlighted.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Mr. Frizzell, you mentioned the safe restart agreement, and I understand that the emergency funding that was provided through that agreement for municipal operations and for transit, in particular, is starting to run out. Is that something you're hearing from your members?

[Garth Frizzell]

We have needs, and the needs don't go away. We would welcome another commitment and would welcome having more discussions along that line.

Right now municipalities are dealing with a lot of uncertainty. Many of us just finished either a budget or going through the final stages of that, and none of us knows what's ahead.

One of the things that has really shone out in Canada throughout this pandemic is the partnership between all the orders of government. We didn't abandon each other. We got closer together to solve the problem for our constituents, and if that's a lesson we can take away for Canada, thank you. It was appreciated.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

When it comes to transit specifically, the safe restart money has been helping transit services survive through this difficult period when their fare-box revenue has essentially dried up.

Now we're hearing from those transit authorities that the funding through the safe restart isn't going to last them forever. What are the risks if transit authorities don't get additional support? We still haven't seen ridership recover. We don't know how long that's going to take. What's at stake here when it comes to Canada's transit systems?

[Garth Frizzell]

Let me say that the biggest impact was the transit revenue. Ridership has been impacted, and we're expecting that to be a problem for years to come. The recovery on that is going to be, as I said, gut-wrenching.

We all need to work together. We have transit commitments that are coming to fruition, but we need a more durable solution to transit and the operating budget shortfalls. We have to build on the SRA, and it's a solution that's going to need the provinces and the territories involved.

With some additional targeted operating support, municipalities won't be forced to cut services as much or defer capital projects. Those are things that create jobs, and if we have to defer capital projects on transit to cover our operating shortfalls, we all lose.

We're ready to step up. We want to be full partners in Canada's recovery.

[The Chair, Liberal, Vance Badawey]

You have time for one quick one, Taylor.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Mr. Frizzell, I think the permanent transit fund is something a lot of people welcomed. It's certainly something the NDP has been calling for for a long time.

We were a bit concerned to see that it begins only in 2026. Is that something you're hearing from your members from the big cities across Canada? Would they have liked to see that permanent transit fund start earlier, say, in the current fiscal year?

[Garth Frizzell]

We welcome the government's commitment on this one. We're really pleased. Yes, we got substantial support right across the board.

Of course, we always want to get things moving as quickly as possible. We'll celebrate the wins. We're eager to get this going as soon as possible.

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. Frizzell.

Thank you, Mr. Bachrach—those were great questions.

We're now going to move on to our second round, starting off with the Conservatives.

Ms. Kusie, you have the floor for five minutes. Welcome.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you, Chair.

Thank you to all of our witnesses for being here today as we continue this study.

Ms. Skivsky, I'll start with you.

You mentioned, in your last response, supply chain issues. I was hoping you might be able to expand upon the supply chain issues that your members face, please.

[Sandra Skivsky]

Thank you.

Where do I begin?

Never mind the cost of materials—we've all heard about lumber and wood, steel, aluminum and components for HVAC systems. You just name it, and there's an issue either with the delivery, the overall availability or the cost. For some things, they only hold the prices for 24 hours. How do you bid on something when you don't know what the price will be next week?

There's that side, and we're struggling with labour. As I said, we haven't gotten everybody back. I think the retirements that we've all talked about for years are starting to really roll out, particularly in the trades. That's hard, physical work.

Productivity is behind, and as I said, there are a lot of issues that are overlapping each other. The fact that the industry has done well and maintained safety standards better than most is a positive.

Whenever you're planning infrastructure, one thing you have to consider is who's going to bring it to fruition, and that is constructors and workers. We have to plan, too, in terms of training and having that labour force available.

The worst thing that could happen is that the market for construction gets hot, and then there are a whole bunch of additional public sector expenditures on top of that. Then you're in an over-heated market, and you have another set of issues that arise coming out of that.

Anything where the plans can be a little more consistent over time and there's a sense of what's rolling out each year.... It obviously will need to be adjusted. This is a fluid situation. Construction always is, but the more planning there is, the more everybody is on the same page knowing what's happening over a shorter period of time.

It can be readjusted, but to say that a program is going to put out a lot of money in these years, no matter what's happening in the market, that's going to create problems for everybody, for municipalities, for governments, for the private sector and for the construction industry itself.

This pandemic has created a hit to training. It's still going on, but it's reduced. We have capacity constraints and everything else, trying to keep everybody safe and moving forward. To say that the industry is operating at full capacity is not accurate.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

You talk about capacity. In regard to supply chains, do you ever hear of concerns about port capacity?

[Sandra Skivsky]

That's probably a step removed from most trade contractors, but anything that constrains products coming in.... That's one thing about construction; you try to source locally a lot. It's more cost-effective. There are things that come in from other countries, and anything that constrains that movement creates a ripple effect.

It's just that right now it's sort of unprecedented, as I said—the pricing of products and the delivery.... Just in our own organization, we're trying to buy a truck for training, a big semi, and they're talking about December or January maybe. You multiply that across the country, and you can see everybody sort of grappling with this.

I agree with a lot of things that both John and Mr. Frizzell have said. I was focused a bit more on remote and rural communities that are really hard to provide services to and tend to be underserved a lot. There are just a lot of things you need to consider from the building, construction and implementation side, as well as everybody else's perspectives on top of that.

I think I've answered your question, and then some.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

I think so. Thank you very much.

[The Chair, Liberal, Vance Badawey]

Thank you, Ms. Skivsky, and thank you, Ms. Kusie. We're now going to move on to the Liberals. We have Mr. Rogers, and I believe Mr. Rogers is splitting his time with Mr. El-Khoury.

You're up first for three minutes, and then we'll move on to Fayçal.

You have the floor, Mr. Rogers.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

Thanks, Chair.

Welcome to our witnesses. It's great to see former FCM board of tables director Garth. I have a question that I'm going to direct to him, as president of course.

When I was a mayor and president of the municipal sector provincially in Newfoundland and Labrador and a board member of FCM, one of our favourite topics of discussion, President Frizzell, was gas tax, what it could do for municipalities, and the importance of that fund as we roll it out and as we've seen for the past number of years.

During this pandemic, of course, our government has realized the impact it has on municipalities big and small, realizing that you guys have been on the front lines of the fight against COVID as well. Of course, because of that we've decided we're going to double the gas tax fund. It's an important contribution to municipalities.

Garth, if you could, I would like you to speak to the importance of this funding and the flexibility it provides to you and your organization for the needs of communities.

[Garth Frizzell]

Thank you, Mr. Chair.

MP Rogers, it's great to see you again. I really appreciate seeing all of the recognition of the municipal experience around the table. The gas tax fund is absolutely critical. All across Canada it's a very simple and effective way to get funding from the federal government to local governments. It gives us the flexibility to apply it where we need it in very different ways all across the country.

The doubling of the gas tax fund, as I said earlier, was welcomed all across the country. It's fast and it's effective. Municipalities are incredibly accountable for the dollars spent. As an order of government that all across the country has an inability to run deficits, having the extra funding available for our capital projects has been critical, particularly in this year when many of us had to put off capital projects and have been suffering from a devastating hit to our operating revenues. Particularly if we look to our members in the prairie provinces, they've been very hard hit with the municipal revenues. Getting this additional revenue, getting this commitment that could roll out so quickly, is highly welcome and much appreciated.

Does that answer your question?

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. Frizzell.

Mr. Rogers.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

Mr. Chair, I'll pass the rest of my time to Mr. El-Khoury for his questioning.

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. Rogers.

Mr. El-Khoury, you have the floor for the remaining time of three minutes.

[Fayçal El-Khoury, Liberal, Laval—Les Îles, QC]

Thank you, Mr. Chair.

Welcome to our witnesses and guests.

My first question is for Mr. Gamble.

The social inequalities in our communities have been exacerbated by the COVID-19 pandemic.

How can infrastructure investments help address these systematic inequalities?

[John Gamble]

That's a bit like asking, how long is a piece of string? There are so many ways that infrastructure can impact people's lives.

I can give you an example, something that is maybe not considered nuts and bolts infrastructure, but something like community housing, community centres, and what is sometimes called soft infrastructure. When somebody has trouble getting work, because they can't access a workplace, we can create a situation where they are in close proximity to where the jobs are, or create transit systems or transportation systems that allow people to access livelihoods. In that way more people are able to contribute to the tax base, which in turn contributes to more people helping to shoulder the burden of financing infrastructure.

Infrastructure creates value. We have to find ways to capture that value, so it's reinvested infrastructure and so we get that cyclic effect. It creates jobs in the short term, not just for engineers and constructors. One thing about infrastructure is that it continues to generate benefits long after my members and Sandra's members have gone, long after people have put away the blueprints, long after the ribbon cutting, and long after everyone involved in this call is done.

These assets are going to continue to provide benefits for decades, and we have to view investment infrastructure accordingly. If we want the best outcomes—societal, environmental, or economic—we can't treat infrastructure as an expense to be minimized, but rather an investment to be leveraged.

That would be my greatest advice in creating important societal change and getting the infrastructure we need. That would go a long way toward ensuring we're getting the right infrastructure.

Sometimes public procurement can constrain the design options. It can constrain the visioning that happens. I have many members who have big visions and big ideas on how to address the very problems you raise. We don't want to be hamstrung by unnecessary red tape, or procurement that encourages us to be as unimaginative as possible.

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. Gamble, and thank you, Mr. El-Khoury.

We're now going to move on to the Bloc.

Mr. Barsalou-Duval, you have the floor, for two and a half minutes.