Transport Committee on Oct. 4th, 2023

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

Thank you, Chair.

Thank you to both of you for being back at committee. I'm not going to say that you're part of the furniture, although I've been on this committee for a couple of years and I know you've been here a few times.

In my area of the world—in the greater Toronto-Hamilton area and indeed in the greater Golden Horseshoe—gridlock is a daily challenge for many of my constituents and for many people. I know that under the previous government, in the great recession there were a number of investments in transportation and highway infrastructure. I can think of one in my community—Highway 403—where the federal government was the senior funding partner. I know there are multiple levels of jurisdiction in the province. In the particular project I'm thinking about, two-thirds were from the feds and a third was from the province.

What currently exists in terms of transportation infrastructure and highway infrastructure funding programs within Infrastructure Canada? Is there a move away from that? How does that compare to the past?

[Kelly Gillis]

In Infrastructure Canada, our mode of investment in urban centres is public transit. We did have the new building Canada fund and the building Canada fund, which did fund roads and bridges in urban centres, but at this point in time, that would be mainly through the national trade corridors fund at Transport Canada.

Within an urban environment, really we are looking for a mode shift to go to public transit, which are the investments we are making for congestion in urban centres.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

Is that a political direction or is that the decision of Infrastructure Canada?

We're talking about the fourth-largest city on the continent. There used to be a joke that Toronto was an hour away from Toronto. Now Toronto is two hours away from Toronto, or worse.

The minister spoke about moving goods and supply chains. If I read the previous mandate letters, obviously I could infer from those that it is a priority.

[Kelly Gillis]

There is one program—the Canada community-building fund—that communities can use to determine how to fund roads and bridges within their communities; it's their decision. That's the $2.4 billion that is transferred statutorily annually to communities. Since 2015, when our new programming came into being, we separated so that Transport Canada funds infrastructure that deals with mainly the movement of goods, and we fund mainly the commuting of people.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

The $2.4 billion, which is not a large—

[Kelly Gillis]

The $2.4 billion is the Canada community-building fund.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

Switching gears, then, when the previous minister was at committee, we asked him about performance bonuses for the CIB executives. I know the CIB isn't directly under you, although the current minister did say that if we had questions about the CIB, you guys would be here to answer those questions. Have the performance metrics changed, or how have they evolved in the past year in terms of how those executives are being compensated and how that aligns with their objectives?

[Kelly Gillis]

The performance metrics are set by the CIB through its annual corporate plan, which is reviewed and put before Treasury Board Secretariat, and then tabled in Parliament. That's how their performance metrics are set on an annual basis—looking at the context and the direction they have been given in the target areas of investment—and then they make their independent project investment decisions.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

The last we heard, there were no projects completed yet by the CIB. Is that still the case?

[Kelly Gillis]

They have projects in use right now. The REM is in use. They also have some zero-emission buses they have supported the financing of that are in use, and they have 32 projects that are under construction right now.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

There are 34 projects, but two are—

[Kelly Gillis]

There are 32 projects that are in construction—

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

And two that are—

[Kelly Gillis]

The Réseau express métropolitain is in use, and then some zero-emission buses they have helped finance are in use in the community.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

Seven years later, there are two projects. Do you find that to be an acceptable rate of progress?

[Kelly Gillis]

As the committee knows, infrastructure—especially when you're looking at large infrastructure—takes time to actually design, build and construct and to be in use. As we look at it from the financial close to when they're doing it, I think they're making great progress in investing in infrastructure that we need as a country.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Deputy Minister Gillis.

Thank you very much, Mr. Muys.

Next, we have Mr. Badawey.

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

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Mr. Chairman.

As an extension of the design, the build and the process, before that is getting the capacity in place, like the infrastructure to support the capacity that the project is going to need. That is what I want to talk about. Quite frankly, I appreciate the discussion, because it is an extension of the discussion we're having during the “Adapting Infrastructure to Face Climate Change” report we're just completing. Of course, we talked a lot about this, and I'm hoping the committee—in particular, some members of the committee—understands exactly what we are talking about when it comes to capacity, asset management, and of course, secondary planning as part of communities. That's what I want to talk about.

Quite frankly, one of the reasons I ran in 2015 to be up here, versus my former life as a mayor, was to expand the ability of the federal government to be more of a partner than it was previous to 2015. Because of the infrastructure deficits, it's important that this secondary planning be in place, which municipalities take on, to then enable success when they're entering into housing projects and asset management—everything we've been discussing today.

More specifically, I want to get a bit more granular on the capacity vis-à-vis infrastructure: water, waste water, roads, gutters, sidewalks, parks, and even the things you don't see that cost money with growth-related costs like policing, fire, EMS, public health, community services, and things of that nature. It's key, because it's bigger than the country when it comes to the cost, to leverage those funds with programs like the CIB, the accelerator, disaster mitigation and GST. Equally important, if not most important, is the Canada community-building fund, which I want to get to in a second. Otherwise, basically, the impacts of the finances you need to make all that happen, if you don't leverage those funds with federal, provincial, municipal and private sectors, default on the property taxpayer and the capital fixed charge on the water bills. The bottom line is that it defaults on taxpayers.

I would like you to talk about how important it is that we actually be a partner in that process. Second, speak about the ability municipalities have through the Canada community-building fund to accelerate a lot of this infrastructure work simply because they're able to get an annual—the key word here is “annual”—contribution from the Canada community-building fund that accelerates due to debenturing. Instead of pay-as-you-go, they can take on a $30-million debenture, accelerate that infrastructure fund, accelerate the housing and everything else that has to be accelerated with respect to the capacity and the capital work, and then pay for that debenture over time with the Canada community-building fund.

[Kelly Gillis]

When we look at the infrastructure we have in the country—and we have over a trillion dollars of assets—we see that the majority of it, 71%, is in public infrastructure. Our ability to be good custodians requires good planning. We need to have asset managers who understand the infrastructure that they have, the state it's in, and the state of the environment that it's living in now and into the future.

The Canada community-building fund is a predictable, stable source of funding so that communities can actually save from one year to the next, and they can plan against.... It also supports planning, so they can actually use that to be able to do asset management plans. They can use it to understand the technology that they need in order to invest, and understand where the investments need to be made. It's a very flexible program. It has a number of different asset classes that it can invest in for the hard infrastructure, but it also supports the capacity that you're talking about, to do the thinking and the thought leadership to be able to put the plan in place so that they're making the right investments at the right time.

Going back to the integration of housing and infrastructure together, as we look at the need for housing, we have to have that core infrastructure in place to be able to support the increased number of houses, so the water infrastructure you're talking about is critical, and the minister mentioned that as well. We are hearing about that from different communities: What are the dependencies to be able to make that a realization?

The investments that we've been making—since 2015, $79 billion in investments from this department in those types of infrastructure—are really important.

[Vance Badawey, Liberal, Niagara Centre, ON]

I think it's key to that, Ms. Gillis, and I thank you for that. This is the bottom line, the discussion that we're having today. If we don't have those mechanisms, those levers, in place with all these programs that we've introduced since 2015—whether it be the disaster mitigation fund, the CIB, the accelerator, the GST, and of course, lastly, the Canada community-building fund we spoke of—simply put, it ends up on the property taxpayer. When you look at your water bill at the end of the month and you see those two charges, one is your operating charge that you can control, based on what you use, but the other one is an actual capital fixed rate you can't control. If, in fact, we don't have these programs in place, when you look at that water bill, you see that that capital fixed rate just gets bigger and bigger, because of the work that has to be done. On the other side of that is your property tax bill. Both rise without these programs.

With these programs in place, it mitigates some of the challenges that the property taxpayer and the water bill payer would otherwise pay.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Badawey.

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

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

Thank you, Mr. Chair.

Ms. Gillis, as noted earlier, you have quite a bit of experience. As deputy minister, you are the main architect of activities and what happens in cabinet. You are the executive director, in a sense. The minister is not necessarily directly involved in the operations and the way things work, but you are. I bring this up because someone mentioned the mandate letters earlier.

Have you ever received such a letter from the Prime Minister?

[Kelly Gillis]

Thank you for the question.

No, ministerial mandate letters from the Prime Minister's Office go directly to the minister. I don't see them until after that.

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

I am trying to understand how a country can be governed with mandate letters that date back to 2021.

As I recall, we were still in the midst of the pandemic in 2021 and inflation wasn't rampant as it is now. Objectively, I think a lot has changed since 2021.

As I understand it, without a mandate letter from 2023, you are still following the one from 2021.

Is that correct?

[Kelly Gillis]

We are continuing to work with the programs we have, such as the Disaster Mitigation and Adaptation Fund. For the whole country, with regard to housing needs, for instance, we are continuing to work on the government's priorities.