Mayors press for permanent transit funding commitments from Ottawa

Theglobeandmail.com
April 23, 2015
By Bill Curry and Ann Hui

Big-city mayors are pushing for assurances in legislation that a new transit fund from Ottawa will be permanent as they begin a series of negotiations on the details.

Finance Minister Joe Oliver referred to the program as permanent in his budget speech Tuesday, but municipalities noted the word was not used in the budget document to describe the new program.

While mayors are praising the idea of long-term funding specifically for transit, they are now zeroing in on key questions about required levels of private-sector funding and Ottawa’s share of the project costs. The government acknowledged in the budget that further details would be announced later this year.

Finance officials will begin negotiations shortly with the Federation of Canadian Municipalities to work out these issues, with the goal of finalizing program rules within a few months.

“There remain some unknowns that are critical to ensuring a successful transit solution,” said Brad Woodside, Mayor of Fredericton and president of the federation. “The government needs to ensure flexibility around the role of private-sector involvement ... As well, any plan must commit the federal government to an equal one-third investment.”

The federation wants Ottawa to confirm it will continue to fund one-third of all projects, with a province and a municipality covering the other two-thirds. Ottawa has not yet committed to funding one-third of all projects under the new fund. Questions also remain as to the level of private-sector involvement Ottawa will require, given that it plans to run the program through a Crown corporation called PPP Canada that promotes public-private infrastructure partnerships.

Tuesday’s Conservative budget included a new program for major public-transit projects that starts with $250-million in 2017-18 and ramps up to a permanent fund worth $1-billion a year by 2019-2020. But unlike previous infrastructure programs that would deliver all of the federal contribution within a short time frame, Ottawa is proposing to spread out the money for each project over 20 or 30 years.

Big-city mayors hope the move to long-term transfers will allow them to borrow against the guaranteed federal cash and get more projects funded sooner.

Finance officials say it is possible that the federal government could fund its portion of almost every major transit project currently contemplated in Canada with the fund.

Mayors have welcomed the fund, but also say far more money will be needed to address the transit needs faced by cities and sooner would be better.

“In every big city, there’s public-transit needs and they’re urgent. That’s the challenge with the delay in ramping up dollars,” said Vancouver Mayor Gregor Robertson, who chairs the Big City Mayors Caucus and who is in the middle of a municipal referendum asking citizens to support a sales-tax hike to pay for transit expansion.

Calgary Mayor Naheed Nenshi said more money is still needed, but he praised the idea of permanent long-term funding.