Transport Committee on May 4th, 2023

[Michael Goetz]

We have the mobile homes that were damaged. They now have a different way of being set up. They are higher and are anchored down. There is the five-step program that is coming in from the provincial-federal government, so we'll be following those five steps. I think we'll be able, as a community that's prone to floods, as is Princeton, to possibly give our ideas, like we are doing here today, to help with the codes being changed.

[George Chahal, Liberal, Calgary Skyview, AB]

If you have any further information or submissions on some of the areas of the building codes that you would like changed, we can look at how that could be incorporated.

I want to go over to Mr. Gemmel from FCM.

Your organization represents municipalities across the country. When we see major disasters like this one, are you engaged and are you getting recommendations from these municipalities as to how to improve infrastructure to be more resilient?

I know that there are different challenges regionally, as we've seen in British Columbia with the floods and heat domes and in Alberta with floods as well. Are you working with municipalities to compile what's needed to be brought forward to the green municipal fund so that provinces are also working as part of these solutions?

A lot of the work is the province's jurisdiction. If it's not a disaster identified by the province, in many cases, federal supports do not come in.

[Matt Gemmel]

Key to adapting to climate change is intergovernmental co-operation. One of the things we are pleased to see, and one of the things we recommended as part of the national adaptation strategy, is that it's all orders of government working together, playing their respective roles. No order of government can do it alone. We've certainly clearly heard concrete examples this morning of how municipalities can't do it alone. There's a role for provinces. There's a role for the federal government.

We hear regularly from municipalities the kinds of stories we've heard this morning around the lack of local fiscal capacity to invest in infrastructure. We certainly have been making recommendations to the federal government through the national adaptation strategy and other forums.

Through our role with the green municipal fund.... I mentioned program funding that we were awarded in the national adaptation strategy. It's $530 million. Beginning this year, we'll have an eight-year program that will support 1,400 local projects. Key to that is supporting smaller communities to do the local studies and plans to understand where they're most vulnerable—to understand where particular, more marginalized segments of their community are more vulnerable to climate change—to then be able to know exactly where investments are needed.

[George Chahal, Liberal, Calgary Skyview, AB]

I want to go to insurance because I think it's an important issue.

In my community of northeast Calgary, we had a massive hailstorm that caused up to $1.5 billion in damage—35,000 homes with insurance claims, 35,000 cars damaged. It looked like a war zone. We did not get provincial support. Our Conservative provincial government did not support us as it supported the floods of 2013 in Calgary. Many folks were left for months and months to rebuild back without provincial support or intervention. The City of Calgary brought forward a roofing rebate program to make roofs more resilient, which is a successful program and is nationally recognized.

When the provincial government does not support municipalities, what should we do, particularly when it comes to the vulnerable folks who don't have the capability to repair their homes?

[The Chair, Liberal, Peter Schiefke]

Give a very short response, please.

[Matt Gemmel]

Sure.

I think there's some good progress around flood insurance, in particular. In budget 2023, the federal government signalled the intention to create a new national flood insurance program. I think the key is that this insurance, at the end of the day, is affordable and accessible to all Canadians.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Chahal.

Unfortunately, there's no time left.

Thank you, Mr. Gemmel.

Mr. Barsalou-Duval, the floor is yours for six minutes.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you, Mr. Chair.

First of all, I'd like to point out that our study today is coming at a very noteworthy time for Quebec. As we speak, the banks of several rivers in Quebec are overflowing, especially the northern bank of the St. Lawrence River. Spring floods used to be seen as unusual, but have now become the norm. Each year, the question is not whether there will be a disaster, but where that disaster will strike.

I would like to express my strong solidarity with the people of Sainte‑Émélie‑de‑l'Énergie and Baie‑Saint‑Paul, as well as all other Quebeckers affected by the flooding.

In the past, there have been natural disasters in the Outaouais region, in Saguenay—Lac‑Saint‑Jean, in Saint‑Jean‑sur‑Richelieu, in Montérégie, and in Sainte‑Marthe‑sur‑le‑Lac. The situation only seems to be getting worse. It's sad, because I believe we had the ability to band together to prevent such catastrophes. We all know it, and we can no longer deny it: the cause of these natural disasters is climate change.

If Canada had been more proactive in fighting climate change, we would not collectively be experiencing all of this devastation. Unfortunately, Canada did not move in the right direction and is still highly dependent on oil. Today, there is a public awakening, and everyone is opening their eyes to see that Canada did not choose the right path. The whole planet also needs to take the right path.

I will start by putting a question to Mr. Gemmel, from the Federation of Canadian Municipalities.

The federal government controls less than 3% of total infrastructure in the country. The vast majority of infrastructure is owned by either municipalities or provincial governments.

Given that, how can the federal government play a leadership role—despite owning just 2% to 3% of infrastructure?

[Matt Gemmel]

Thank you for the question. It's an excellent question.

It really points to, as I was saying earlier, the need for all orders of government to work together. The federal government does have a role to play, but it's limited. Provincial governments have a very important role to play with legislation and with building codes, as was mentioned earlier. As you rightly noted, municipalities own the majority of public infrastructure in the country and have a critical role to play around land use planning. It needs to be all orders of government working together.

I think the federal government has shown leadership in the national adaptation strategy, and it is using that strategy to play a convening role and to lay out a road map with targets that all orders of government need to work towards. Having that framework in place is a start.

I think you're right that we're behind and we're playing catch-up, but having that strategy is a start. As has already been mentioned, funding from the federal government, which has the largest fiscal capacity, is critical as well.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you.

Indeed, regarding the federal government's financial capacity, take the example of the last budget that it tabled. We and the Conservatives, among others, spoke out against the budget, especially because it ran a deficit. A graph in the budget showed that in the long term, the Canadian government would probably no longer be in debt around the year 2055. Meanwhile, municipalities in certain provinces, like Quebec, complain of lacking the financial means to respond to all sorts of needs: in particular in education and health, but also to adapt their own infrastructure.

Do you find that there is also a financial imbalance when we look at where the income is and where the needs are?

[Matt Gemmel]

It's certainly a challenge from a municipal perspective. I'll give you an example that illustrates the current insufficient revenue tools that municipalities have.

In the last three years, coming out of the pandemic, municipal revenue—which is largely property tax—has been flat or, when accounting for inflation, has even been declining. Meanwhile, as we came out of lockdowns and out of the pandemic, provincial sales tax and income tax and federal sales tax and income tax have increased substantially.

Municipalities don't have sources of revenue that grow with the economy, and they don't have sources of revenue that grow with population. This is a challenge when we need to increase housing supply in the country to restore housing affordability. It's certainly a challenge when we look at an issue like climate change, given that municipalities own the majority of public infrastructure.

I mentioned in my opening remarks that this is one example of many that shines a light on the inadequacy of the current fiscal framework. The costs are massive. It's not going to be easy. There may be a role for private finance when it comes to investing in infrastructure, given the scale of the challenge, but it's going to require a long-term investment plan with some new creative ways of funding it.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Mr. Gemmel, I am going to ask you a hypothetical question relating to the study we are doing today—adapting infrastructure to face climate change.

If we asked the FCM to choose between, on the one hand, a newly created $500-million federal program for adapting infrastructure to climate change, and on the other hand, a $500-million increase in tax revenues to municipalities that could be used for the same purpose, which of the two would you say is preferable?

Is it better to give the money to those who have the needs and expertise, since it's their infrastructure, or is it better to set up new federal programs?

I am not suggesting that federal programs should never be created, but I would like to know your opinion on this topic.

[The Chair, Liberal, Peter Schiefke]

Give a 15-second response, please, Mr. Gemmel, if possible.

[Matt Gemmel]

Sure. Thank you.

FCM has heard loud and clear from our members that predictable sources of transfers from the federal government directly to municipalities, like the Canada community-building fund, are an ideal way to fund municipal infrastructure. It gives them the predictability. They don't have to apply year in, year out, like we heard from the mayors, not knowing when the intake period is going to reopen.

Transfers are the way to go.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Gemmel.

Thank you, Mr. Barsalou-Duval.

Next we have Mr. Bachrach.

Mr. Bachrach, the floor is yours. You have six minutes.

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

Thank you, Mr. Chair.

Thank you to all our witnesses.

It's good to see you in person, Mr. Gemmel. I have some questions for you. I know that the FCM is very attuned to the needs of municipalities right across the country.

I think your remarks on climate adaptation and climate risk are very pertinent. It sometimes feels as though we're sleepwalking into something much bigger than we currently talk about. There's not only a massive existing infrastructure deficit faced by almost every community across the country. We also know that climate change is worsening and that the severity and frequency of extreme weather events are increasing. We saw the atmospheric rivers in British Columbia. This is getting worse and worse, yet we aren't investing nearly enough to even deal with what we're already seeing in terms of infrastructure deficit.

I'm reflecting on the comments from the two mayors we have with us. Your point about aligning funding with population growth struck me. I come from a community whose population hasn't changed since the 1990s. Many rural communities across Canada are losing population, yet these communities have very real infrastructure needs, many of them related to climate risk.

My question is this: If we move toward a funding system that puts more emphasis on population growth, do we not risk leaving behind rural communities that have very real needs in relation to climate risk?

[Matt Gemmel]

Thanks for the question. That is a terrific point.

I think when it comes to funding for climate adaptation, regardless of the funding source, one of the recommendations FCM made in the national adaptation strategy was that we need to be prioritizing investment in communities that are most at risk. That's partly from an equity perspective, because it is often lower-income or marginalized or racialized communities that are at higher risk from climate change. It's also because of the cost-benefit analysis of reducing risk for those communities.

The comment about linking to population growth is related to climate change but is more related to the outdated fiscal framework that we have for municipalities. The country is growing. We had more population growth last year than we have since the 1950s. That's a good thing. I think we can all agree on that, but many communities of all sizes, not just the bigger cities, that are growing quickly don't have the financial resources to invest in infrastructure, to increase housing supply or to adapt to climate change.

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

My next question is around how we pay for all this. The numbers are quite dramatic. You indicated here that the Insurance Bureau of Canada suggests that $5.3 billion per year is required to avoid the worst climate impacts. We're investing a lot of money in infrastructure that is not directly connected to climate adaptation. I note that the Ontario provincial budget is investing $28 billion over 10 years in highway expansion.

Do we just do everything more, such as invest more in growth and invest more in adaptation? Where does this money come from? I'm wondering if it's a situation where we have to take a hard look at where we invest public money—that, actually, there are things we need to reduce investment in so that we can shift investment onto these critical priorities to protect what we have and ensure that communities like Merritt and Princeton aren't facing situations like the ones they've faced.

[Matt Gemmel]

Yes. I think the reality is that these are tough decisions for elected officials at all levels of government.

I would say that, whatever we're building, whether it's a new hockey rink or whether it's an upgrade to a highway, we need to be rebuilding or building that to a higher standard. We need to be complying with codes and standards that are taking climate change into consideration. We need to be incorporating the best climate science and the best data into that. Whatever we're building or rebuilding needs to be built to a higher standard.

We also need to be dedicating investment in infrastructure and natural infrastructure that has the explicit purpose of protecting communities.

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

All of that requires more money, so yes, we should build the things we want to build in more robust ways so that they don't wash away when the rain comes, but are there enough resources out there to do all the things we're currently doing, plus do all of what's required to protect infrastructure from extreme weather and rebuild a lot of our infrastructure that wasn't built to accommodate the 200-year floods that the mayors were talking about?

[Matt Gemmel]

I would say it's clear that we aren't allocating enough resources currently when it comes to climate change, and that's going to require all orders of government to increase the amount of investment. FCM's recommendation is not that it all come from the federal government, but that, to get to that $5.3 billion a year, we're going to need to increase spending at all levels of government.

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

Earlier Will Balser indicated there should be stronger provisions to prevent building in high-risk areas. Is that something FCM supports? If so, what would that look like in terms of specific federal requirements or provisions?

[Matt Gemmel]

It is something FCM supports. The key, though, is that there is support for businesses and homeowners to relocate when that's deemed to be the best, most cost-effective option. Currently, as was noted, either through the DFAA program or through DMAF—the disaster mitigation and adaptation fund—we don't have the eligibility criteria we need to support relocation or strategic retreat.

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

Thank you.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Bachrach.

Thank you once again, Mr. Gemmel.

Next, we have Mr. Albas.

Mr. Albas, the floor is yours. You have five minutes.