Accelerating Infrastructure:
Speeding Up Project Funding

During this challenging economic period, the Government of Canada is working with provinces, territories and communities to build the infrastructure our country needs for a strong and bright future.

This Government understands that modern infrastructure is vital to our economic security. Since 2006, this Government has made important decisions and has taken action on infrastructure. This Government:

• Launched an unprecedented $33 billion investment in infrastructure called Building Canada.
• Took action to develop our gateways, borders and trade corridors.
• Made gas tax transfers permanent.
• Delivered significant public transit initiatives.

All of these decisions have provided a solid foundation for our country to weather this economic storm.

In this period of global economic uncertainty, the Government will build on this foundation by stimulating our economy, creating jobs, and helping Canadians have a more prosperous future. The need for immediate infrastructure investments is critical. This Government has proposed to the provinces and territories to jointly accelerate planned spending to ensure that this money gets into the economy when it is most needed.

These initial actions will accelerate approval of a combined $1.9 billion in infrastructure projects beyond what was planned for the next two years. This Government is working with provinces, territories and municipalities to identify additional infrastructure projects and funding that can be accelerated.

The Action Plan

The Government of Canada will speed up infrastructure funding by:

1. Working with provinces and territories to put key major infrastructure projects on the fast track through the Building Canada Fund Major Infrastructure Component.
2. Offering all remaining Provincial-Territorial Base Funds over the next two years in order to start more infrastructure projects in the short term.
3. Accelerating funding for projects in smaller communities to create jobs over the next two construction seasons when our economy will need these jobs most.

Speeding Up Funding for Major Infrastructure Projects

The Major Infrastructure Component of the Building Canada Fund targets large, strategic infrastructure projects. Roughly half of the funding has been committed for specific projects identified as priorities, such as the expansion of the Manitoba Red River Floodway, the Spadina subway extension in Toronto, the Saint John Harbour cleanup in New Brunswick, upgrades to the Kicking Horse Canyon highway in British Columbia, and the building of the new Ottawa Congress Centre.

The Government of Canada and the provinces are discussing priority infrastructure projects that could be approved soon. The result will be construction starts on major infrastructure projects across Canada in 2009 and 2010.

Providing Funding Faster through the Provincial-Territorial Base Fund

The $2.275 billion Provincial-Territorial Base Fund was established to provide each province and territory with predictable funding of $25 million per year, over seven years, for a total of $175 million per jurisdiction. When matched by the provinces and territories, the PT Base Fund will invest at least $4.5 billion in core infrastructure.

The Government of Canada is prepared to accelerate all of the remaining funding to support infrastructure work. Instead of providing provinces with $25 million per year, we are prepared to give each province and territory their entire $175 million over the next two years, subject to matching contributions. To address pressing infrastructure needs, the Government of Canada will also make this funding more flexible, to allow provinces and territories to repair bridges, local roads and secondary provincial highways.

Working with provinces and territories, at least $900 million in joint funding will be brought forward and invested in infrastructure projects to be constructed over the next two years. The Government of Canada will also make this funding more flexible.

Accelerating Funding for Projects in Smaller Communities

The Building Canada Fund Communities Component targets municipalities with populations of fewer than 100,000 people and the Government of Canada is providing more than $1 billion to projects in this program. With matching contributions from provinces and municipalities, this will result in over $3 billion in infrastructure investments between 2007 and 2014. It is expected that about 2,000 smaller projects will result from this program.

A large number of very good projects have been put forward in the first calls for applications.

The Government of Canada is prepared to approve projects this year using the entire funding available under the Communities Component. Eight provinces have agreed to accelerate approvals for some or all of this funding. This will advance at least $1 billion in joint funding in 2009 and 2010 so that municipalities can get shovels in the ground that much sooner.

For information on streamlining project approvals, please see the backgrounder titled:
“Accelerating Infrastructure: Cutting Red Tape; Less Duplication, More Cooperation”