Cities seek permanent transit transfer ahead of 2019 budget

Theglobeandmail.com
December 20, 2018
Bill Curry

Canada’s municipalities say the Liberal government’s transit funding should come with fewer strings attached so that projects get moving more quickly.

In a report to be released Thursday, the Federation of Canadian Municipalities will outline its recommendations for the 2019 budget. According to an advance copy provided to The Globe and Mail, the FCM will call for a “modernized fiscal relationship” so that cities have more freedom over how to spend federal transfers.

In practice, this would mean a permanent transfer of about $3.4-billion a year for public transit, which would start in 2028 when existing federal transit programs expire.

Municipalities currently receive funding through a share of the federal gas tax that can be spent as they wish, however billions more in federal transfers to municipalities are tied to specific programs in areas such as public transit, addressing climate change or social housing. This funding requires cities to submit applications and then wait for approvals by federal – and usually provincial – officials before the projects can go ahead.

“We’re in a financial, fiscal frame that is outdated,” said Vicki-May Hamm, the FCM president and mayor of Magog, Que.

Ms. Hamm gives the example of the past year, in which municipalities in Ontario, Quebec and New Brunswick all faced delays in project approvals because of provincial elections and now a federal election is on the horizon that could cause further delays. She said municipalities want a steady stream of transit funding they can count on each year in order to make long-term plans.

The FCM report says more flexibility over how federal transfers are spent, specifically when it comes to public transit, would make it easier for cities to spend money on maintaining their existing assets in addition to funding new services.

The Liberal government supported previous FCM requests for long-term infrastructure funding. The 2018 budget sets out $81.2-billion in infrastructure spending through to the 2027-28 fiscal year. The amounts are heavily back-end loaded, with $3.2-billion allocated for the 2018-19 fiscal year, while the amounts for the final three years all exceed $11-billion.

About $25-billion of the $81.2-billion is dedicated to transit funding. The FCM proposal is for similar levels of transit funding to be made permanent and consistent. The FCM report says this would work out to about $3.4-billion a year or $34-billion over the next 10-year period that will run to 2037-38.

It recommends that $30-billion of that amount should be allocated based on public transit ridership and $4-billion for application-based funding in support of “transformative” transit projects.

In addition to the transit request, the FCM is asking Ottawa for a commitment to hold regular high-level meetings with municipal leaders and to add $2-billion to an existing fund for natural-disaster mitigation and adaptation.

Finance Minister Bill Morneau has not announced a date for the next budget, but it is usually released in February or March.

Ms. Hamm said the FCM’s message about sustainable municipal funding is aimed at the 2019 budget, but is also directed at all political parties as they prepare election platforms for the fall election.

“We’re going to be having our most ambitious plans ever for the next election so that all parties don’t think that we’ve had our share and move on," she said. "There’s still a lot to be done. Every time there is a national challenge, whether it’s climate change or legalization of cannabis, well, we’re the ones on the front lines.”