It's a privilege for us to be here today to share our thoughts on Canada's economic stimulus plan.
FCM has been the national voice of municipal government since 1901. We represent 90% of the Canadian population—more than 1,800 municipal governments. Members include Canada's largest cities, small urban and rural communities, and 18 provincial and territorial municipal associations.
It was a little more than a year ago that the bottom fell out of global markets, plunging the world into a severe economic downturn. Along with most other countries, Canada needed an immediate strategy to create jobs and fight the recession. As it was then, infrastructure spending is now one of the most effective stimulus tools available.
As you likely know, spending on infrastructure delivers twice the economic boost—and twice the number of jobs—as an equivalent tax cut. This spending is used to build quality roads and bridges, enhance public transit and renew water and sewer systems, as well as to initiate projects which protect our environment and improve our quality of life. Infrastructure spending can strengthen the foundations of our economy.
In the 2009 budget, Parliament set aside $5 billion in new federal stimulus funding for provincial, territorial, and municipal infrastructure projects. Today municipalities are matching federal investments in their communities. We manage stimulus projects from design right through to construction and completion. We're working flat out to put stimulus dollars to work, creating jobs and meeting local needs. Working together we have made progress, but the job is not done and there are lessons to learn from the work done in the past year. If we make the right decisions now, we can continue to strengthen our economy, deliver greater value to taxpayers, improve infrastructure programs, and respond more effectively to future economic crises.
To that end, on behalf of the Federation of Canadian Municipalities, I would like to underscore a few key points.
First, while governments implement the stimulus plan they must also begin to look beyond the immediate economic crisis. We must position Canada to succeed in a tough, competitive post-recession world. As we come out of the recession and budget deficits reappear, we cannot afford to repeat the mistakes of the 1990s. That was when the federal, provincial, and territorial governments pushed deficits off their balance sheets and into local streets. They cut programs and offloaded responsibilities, leaving the municipalities to pick up the pieces. Those decisions added to the burden on property taxpayers and fuelled growth in what is today's $123 billion municipal infrastructure deficit.
The federal stimulus plan, along with the 100% GST rebate, the federal gas tax fund, the Building Canada fund, and the public transit capital trust are helping municipalities repair their aging foundations. They are also helping to provide the modern infrastructure and transportation networks that Canada needs to compete in the post-recession world. While stimulus spending is inherently short term, if Canada is going to thrive in the post-recession world, the federal government must protect and build on these other investment programs. Therefore, secondly, all governments must commit to keeping the stimulus plan on track and to make sure to put every single dollar to work in communities across the country.
Canada's economic recovery is fragile and new jobs will be scarce for years to come. As many Canadians struggle to find work and make ends meet, they need to know their governments won't be letting stimulus dollars collect dust in Ottawa or in their provincial capitals. Therefore, thirdly, as municipalities co-fund and manage thousands of stimulus projects across the country, federal and provincial governments must be supportive and flexible to ensure cities and communities have the time and resources to put stimulus dollars to work.
As you know, the infrastructure stimulus plan was rolled out faster than any previous cost-shared infrastructure program, but the time required to get it up and running still meant that many municipalities lost much of the 2009 construction season. Cities and communities waited, although not always patiently, for federal, provincial, and territorial governments to negotiate funding agreements, to design programs, and to approve individual projects. Today, no order of government has more at stake in the stimulus plan than municipalities. Communities have been hard hit by the recession and are looking to their mayors and their councillors for answers. Municipalities across the country have re-opened their capital budgets to find the money to match federal stimulus dollars, often taking on additional debt or shifting dollars from other priorities.
In addition to matching federal investments in their communities dollar for dollar, municipalities are the front-line project managers for most of Canada's stimulus projects. To successfully finish these projects and to turn every stimulus dollar into a new job, municipalities will need the same support and flexibility, the same patience they showed the federal, provincial, and territorial counterparts during the start-up of the stimulus plan.
Municipalities must not be held responsible for project delays beyond their control. Where federal, provincial, and territorial governments are responsible for delays--and this is key--they must also be prepared to extend the March 2011 construction deadline for municipal projects, where necessary.
Another key point, and one of particular note, is that we should not wait for a crisis to hit before building better infrastructure programs. When the economic crisis hit, the federal government not only faced the challenge of getting new programs up and running across the country, but it also had to fix programs that had been a drag on cost-shared, application-based programs for more than 15 years.
Minister Baird and his officials worked hard to clear the funding backlog in the Building Canada fund, to deal with excessive red tape, cumbersome application forms, and drawn-out approval processes. But none of these problems were new, and they've been an ongoing source of delay, inefficiency, and cost overruns for almost a generation. A serious effort to fix these problems before the economic crisis would have saved time and resources when the crisis hit.
Finally, all orders of government need to work together to build better infrastructure programs. A lot has been said recently about how stimulus projects are being selected, how spending announcements are being made, and how the government is tracking the number of jobs that its plan is creating. These are fair questions that deserve good answers. But they are questions about the way government works, not the value of infrastructure spending.
Governments must always decide on how to set policy objectives, allocate resources, communicate decisions, and evaluate results. How they do it will go a long way in determining the success of a program, whether we're talking about infrastructure spending, health care, tax policy, or unemployment insurance. The case for investing in infrastructure is strong. The question is how the federal government should design its spending programs. As a first step, it should sit down with provinces, territories, and municipalities to establish national objectives for federal infrastructure spending and work with them to design programs that achieve those objectives.
During the past year, Canada was tested by a severe global economic crisis. Federal, provincial, territorial, and municipal orders of government responded to that crisis by working together. There is still a great deal of work to get the country back on to solid ground, but we have made a good start. Crisis management is never perfect.
Crisis management is never perfect, and there are important lessons we must learn from this experience, lessons that we need to act on. The country must put every single stimulus dollar to work creating jobs in cities and communities. Federal, provincial, and territorial governments must be supportive of municipalities as they carry out thousands of stimulus projects across the country in the next two years. Most importantly, we must make cooperation, communication, and program reforms an ongoing feature of Canada's infrastructure strategy.
We have long-term infrastructure challenges that can only be met by funding commitments made over decades, not years. We know that we can't build strong communities and a strong economy with a single spending package. It takes vision, coordination, and sustained funding. By working in partnership, all orders of government can achieve lasting results that include safe, healthy, and economically viable cities and communities.
Thank you for your time and attention, and of course we'd be pleased to respond to any questions.
:
Thank you, Madam Chair.
Members of the committee, the Union of Quebec Municipalities was eager to accept the invitation to take part in your deliberations regarding the implementation of economic stimulus measures, because this is a question of crucial importance to its members.
The President of the Union, and Mayor of Maniwaki, Robert Coulombe, has asked me to represent him, as he was unable to be here today. He asks that I convey his greetings.
The UMQ represents municipalities of every size and in every region of Quebec. Its mission is to promote the fundamental role of municipalities in the social and economic progress of Quebec as a whole and to support its members in building democratic, innovative and competitive communities. More than 5 million Quebeckers are represented by the Union of Municipalities.
For several years, the Union has been calling for massing spending by governments to make up the deficit in municipal infrastructure.
At the request of the UMQ, the Conference Board of Canada did a study on municipalities' fiscal situation and the hidden infrastructure deficit. The findings were clear: the deplorable state of municipal infrastructure in Quebec is the result of underfunding since the 1970s; the infrastructure deficit in 2003 was estimated at $18 billion, or $1 billion per year for the next 15 years.
Since then, the UMQ's voice has been heard, and major efforts have been made by all levels of government to rehabilitate municipal infrastructure. The federal government's economic action plan has been implemented to rapidly stimulate the economy in the global financial crisis and the economic recession. It has added to existing programs by targeting projects that can be carried out between now and March 31, 2011.
Our reading of the current situation as it relates to implementing economic stimulus measures for municipal infrastructure has resulted in the following observations and recommendations.
In Quebec there are hundreds of projects underway, illustrating the positive effect of the plan. However, there are many projects still waiting for approval before they can start up.
Some delays can be explained by the discrepancies between the priorities of the various levels of government. It is sometimes difficult for a project to reflect both federal and provincial intentions.
Greater consistency between provincial and federal considerations is needed for each program. It would be preferable to agree on common priorities that projects will have to meet in order to facilitate approval, and ultimately implementation.
For example, the agreement between the federal and provincial governments on the Green Infrastructure Fund has not yet been signed. In the meantime, projects have to continue to fit into the requirements of each government and start-up is delayed.
The Union believes that the gas tax transfer program is an example that should be followed. It enables municipalities to do long-term revenue planning and offers them the flexibility they need in order to adapt better to their circumstances.
The UMQ would also like to see greater flexibility in the program criteria to enable municipalities to meet the needs of their own communities.
For example, socioeconomic infrastructure projects could be made eligible.
In addition, infrastructure projects require municipalities to invest a significant minimum amount, up to one third of total spending. But the fact is that municipalities do not have new sources of revenue to fund that contribution.
Property taxes are still the main source of revenue for Quebec municipalities. In addition, for every dollar invested in infrastructure, and funded equally by the three levels of government, Quebec City and Ottawa share $0.35 in direct tax refunds, while municipalities receive zero.
At present, for a $100 million investment, Ottawa gets a refund of $18 million, Quebec City gets $17 million, and the municipalities get zero.
That is why the Union would like to see a little more flexibility in the programs, to recognize municipalities' ability to pay.
The Union would also like to see investment maintained at a constant level, to allow us to move ahead with rehabilitating our infrastructure. It would therefore be desirable to ensure that programs like Building Canada are permanent.
The UMQ is also concerned about the current status of public finances and believes it is imperative that the budget is not balanced on the backs of municipalities.
On May 15, at the UMQ annual convention in Gatineau, the members of its executive committee had discussions with the Rt. Hon. Stephen Harper, Prime Minister of Canada, and with Michael Ignatieff, the leader of the official opposition, and Gilles Duceppe, the leader of the Bloc Québécois, regarding the importance of maintaining and speeding up investments in municipal infrastructure and working in close cooperation with Quebec to secure economic prosperity for our province and for Canada.
The return of Parliament led to debates about the federal government's plan to balance the budget. This is a major issue, one that is of the utmost concern to municipal leaders. Given this situation, the members of the UMQ board of directors unanimously adopted a resolution on September 18 calling on the leaders of the federal parties to make a formal commitment that any plan to balance the budget would rule out postponing the funding allocated to infrastructure projects and preserve the other gains that have been made, such as the GST refund and a permanent gasoline tax.
They are also calling for a firm commitment from the federal political parties to make infrastructure programs permanent so that we can continue to catch up on the needed rehabilitation of municipal infrastructure. The strategy of balancing government budgets cannot be pursued on the backs of municipalities without directly affecting services to the public and the quality of the infrastructure.
In conclusion, Quebec municipalities are key economic actors and partners. Every year they inject $11.5 billion into the Quebec economy. Investing in infrastructure will mean an environment for the public and business that will support sustainable development. In terms of infrastructure alone, they invest $2.7 billion dollars every year, and they will invest an additional $2.5 billion over five years in contributions to the new programs.
Municipalities want to support economic growth and job creation by investing their share in infrastructure programs. Stable funding, permanent programs and greater flexibility in program terms and conditions will enable them to do their full share as engines of socioeconomic development in their communities.
Thank you for your attention.
:
Thank you for inviting us to this meeting on infrastructure, Madam Chair.
The Fédération Québécoise des Municipalités is very pleased to be able to present its views on the progress being made under Canada's Economic Action Plan as it relates to infrastructure. However, I would note that the Fédération Québécoise des Municipalités, unlike the Union of Quebec Municipalities, which mainly represents the larger urban centres in Quebec, represents over 1,000 members, municipalities and RMCs, in all regions of Quebec, and this colours the Fédération's views in terms of progress under the action plan.
Certainly, like the FCM and the UMQ, the Fédération's reaction to the injection of $4 billion into infrastructure is very positive. It notes that this measure will create new jobs in economic hard times. We are pleased that the federal government realizes the urgency of the updating of infrastructure that has been called for, for so long.
We have to make sure, starting now, that these programs are permanent and continue beyond the action plan, so that infrastructure continues to be central to the catching up that must be done in any event if we want our municipalities to continue to be competitive.
I will now make a few comments on the program. First, one of the major problems in implementing this action plan was how slow the process of getting the agreements officially signed was. It was hugely delayed, and that means it is even more complicated for municipalities to adhere to the notorious two-year deadline imposed by the federal government for using the money. As well, the two-year deadline already seemed to us to be very short, when the municipalities' applications have to be processed by the governments before work can start, in a relatively short construction season. Our first request is therefore that the period for the work be extended to more than two years.
In terms of the speed for analyzing it, it is currently hard to evaluate the impact of the action plan because the agreements were not officially signed until the spring or even the end of the summer of 2009. Several municipalities are still preparing their requests, while others have been in processing for only a few weeks.
Is the money available quickly? Will it be available? It is up to the government to answer these questions, because it is the only one with the figures for the exact number of projects approved to date.
What are the times between when a municipality submits a project and when it receives approval from the government? It is up to the government to monitor this and evaluate the efficiency of its internal process.
In terms of the low-interest loans program for municipal housing infrastructure, we would note that the municipalities of Quebec still do not have access to the program, while the other Canadian municipalities have had access for several months. Given that money has not been allocated by province, Quebec is clearly being disadvantaged in the case of this program.
To speed up processing of requests and ensure that the money is allocated fairly, the FQM suggests that the money for Quebec municipalities be transferred directly to Quebec City under framework agreements, which would significantly reduce the red tape and allow for criteria to be developed that are more tailored to the situation in Quebec municipalities. We would note that recent statistics tend to show that at present, only 7% of the money is committed in Quebec municipalities, while Ontario is to receive 54% of the funds.
The FQM has also already made the government aware of the possibility of overheating if numerous actions are taken in a relatively short time. We are still concerned about this, and we have to ensure that as broad a spectrum of actions as possible is taken to avoid all the projects starting up in the same sector of the economy in a relatively short time.
The Fédération has noted another concern: modulation. We know it is essential to modulate the criteria to take the situation in rural communities into account. They generally have less capacity to pay than some municipalities. We must ensure that these programs are accessible to municipalities of all sizes, small as well as large. This is achieved by modulating programs.
In addition, their remoteness from major centres means that they have fewer private enterprises, and thus fewer bids. This often raises costs for contracts and subcontracts. Costs are relatively higher in outlying regions. This is another reason why the principle of modulation must be applied to programs that benefit municipalities.
Given that the labour force is smaller and often less skilled, it is more difficult to assess the condition of infrastructure, and this can create problems. The costs of accessing workers are high and comprise a larger share of the expenses in connection with existing infrastructure programs.
The entire question of rural life must also be considered in looking at Quebec's situation. Rural is defined, in Canada, as including communities of with a population of 100,000 or lower. We think it would be wise for the definition to instead cover populations of 25,000 or fewer, to better reflect what rural actually means in many of the municipalities of Quebec represented by the Fédération Québécoise des Municipalités.
As well, we know that government infrastructure programs are mostly based on a funding formula under which each level of government covers one-third of the costs. That requirement does not reflect municipalities' ability to pay. It is unfair, in that municipalities receive no direct tax refund for their investment, while the federal and provincial governments receive $0.18 and $0.17, respectively, for each dollar invested in infrastructure. The FQM wants to see the share that all municipalities are being asked to pay to fund infrastructure projects reviewed, so that it better reflects their financial situation.
In closing, I would like to talk about access to the Internet. We know that $250 million has been proposed to extend Internet access throughout Canada. We would like to know what progress has been made under that program.
Thank you for your attention. We are prepared to answer your questions.
:
Thank you, Madam Chair.
Good afternoon, gentlemen. I am very pleased to see you today, because your presentations give us a chance to see and understand the problems facing municipalities in Canada and Quebec.
What I notice from your three presentations is that you are talking about the infrastructure needs of cities in Canada and Quebec in terms of support, flexibility and time. You have talked about all three. The recovery plan is a sudden event. I think it was the Union of Quebec Municipalities that pointed out that for many years there has been a hidden deficit of over $18 billion in chronic underfunding that started under numerous federal governments, without naming them. You are also asking for more flexibility in the programs. I think this committee will try to take your requests into consideration and make recommendations in that regard.
I was expecting to see considerable divergence between the views of the Federation of Canadian Municipalities and the two groups from Quebec. The only difference I see relates to the speed with which infrastructure projects are being approved. Mr. Généreux tells us that the process of signing the agreements was lengthy. In April or May, the Minister told this committee that he was making every effort to speed up the process, particularly in Quebec. We know that there must first be an agreement signed by the Government of Quebec and the Government of Canada.
Mr. Généreux, can you tell me what you attribute the slowness with which the agreements are being signed?
:
Completely. In any event, what we have been calling for since this action plan was first put in place is ease of access to the program. It absolutely has to be acknowledged that from the moment the agreements were signed, things speeded up visibly, particularly in the case of PRECO, the Pipeline Renewal Program, where we have seen things obviously speed up in implementation of the program and the ability to get projects in motion quickly.
That program has how reached cruising speed, although after the waiting period, in the weeks or months following the announcement, particularly in Lévis, it took some time to get the machine in gear. Nonetheless, we are seeking project implementation speed up. Not everything is perfect, but ideally, if we could have broken ground and got access to the money earlier, there would probably be even more projects in advanced stages.
Our concern is the two-year time limit, and it will always have to be kept in mind. We will have to ensure that for all components of the action plan, and not just PRECO, we are able to spend funds available. We do not want to leave a penny on the table. We have so much to catch up on, in terms of infrastructure, that I might say, "Fortunately, there is an economic crisis, because that means we can speed up the infrastructure program."
Apart from the economic crisis, the lag to be made up for is so large that we need a permanent infrastructure program. I don't want to play the game of comparing the successes of this government and the former government. We have to get programs up and running, from which we receive our fair share, and renew them in the long term, so we can do our own planning for the development of our communities under programs that are guaranteed permanent. I can assure you that it is not easy to manage development with an ultimatum every two years. These programs have to be unsealed or unlocked and made accessible on a permanent basis, so we can plan accordingly.
:
Thank you, Madam Chair.
It seems to me, gentlemen, that we're dancing all around the key issue. When there are billions of dollars flying out the door at unprecedented, breakneck speed, people compromise some of the due diligence that used to take place. They also leave the door wide open for hanky-panky, political mischief, and political interference at the highest level. When we had Minister Baird here at this committee in the early days of the stimulus package, he sort of said, “Here are the rules: there are no rules; this is all brand new.” Now we find ourselves with serious allegations that certain municipalities are getting punished because they didn't vote for the ruling party. In the absence of any fair system, like a simple gas tax transfer on a per capita basis, it's like a lottery. It's more like one of those rigged ring tosses on a carnival midway, with the minister acting as the carnival huckster who decides who wins or loses. That's what we are wrestling with, gentlemen.
The leader of my party used to be the president of the Federation of Canadian Municipalities. From day one, Jack Layton was demanding that this money flow on a gas tax per capita basis, so that every municipality could choose its projects for itself and there would be no lottery system or sketchy new application system that gives all the power to the minister.
Would you have preferred a replica of some gas tax transfer model instead of this carnival ring toss that you're being subjected to now?
First, you know as well as I do that the municipalities have to abide by various provincial statutes and regulations: the Civil Code, the Municipal Code, the Elections Act, and so on.
In itself, the federal excise tax on gasoline is a very good tax. It has allowed most municipalities that receive it to do better long-term planning for infrastructure work. But the negative side of the tax, if it is applied to all infrastructure programs, is that small municipalities in rural Quebec and Canada, the ones with 500 to 1,000 people, would receive very small amounts. That would not make it possible for them to do major infrastructure work such as water and sewer lines, community centres, arenas, and so on. I think we always have to look at it from both angles.
I would also like to note that municipalities...
Of course, the gas tax has always flowed money to meet local needs with efficiency and accountability, as you've mentioned. That's, of course, why municipalities supported its introduction in 2005 and its extension in 2008 by the present government. And that's why we also applauded Mr. Ignatieff and Mr. Layton when they recently committed to flow more funding through the gas tax fund. It's also why we thought the gas tax fund model would be a good way to get stimulus dollars to quality projects quickly.
Having said that, it should be noted, first of all, that we as FCM were not part of the decision-making process. In the end, the government stimulus plan wasn't based on the gas tax fund, although it's certainly more streamlined and less centralized than other cost-shared, application-based programs. What counts for us is that it's a powerful tool for fighting the global economic crisis.
It should also be mentioned that just because we didn't get to participate in choosing the program, it doesn't mean that we don't believe, like all Canadians, that the program has to be accountable and transparent.
:
Thank you, Madam Chair.
And thank you to our witnesses today for being here. This is a very interesting conversation we're having.
When I think about the stimulus program and what it was meant to accomplish--to deal with the aging infrastructure in the country and to create badly needed jobs at the same time--I'm always a little nervous about this two-year deadline, because if you're talking about building anything of any significant size.... Having been a minister of education and having built schools in our province, I know it's very difficult to get something built within two years. So it's always been an issue for me that you set a deadline of that timeframe.
I represent a riding in Newfoundland and Labrador. I have 180 communities in my riding alone, and 35 of those communities actually received letters of intent, and in some cases the money is actually flowing. But when I think about Newfoundland and Labrador.... We all know there's going to be a shorter construction season in some parts of the country than in others. I'm not sure if that was ever factored into what governed this particular program and how it was put together.
My concern is that if you start something like an arena or a stadium or whatever, and you're doing it through the use of stimulus money and it's not completed by the end of the deadline, the municipality then has to assume responsibility for it. I can tell you from my perspective that there are going to be a lot of boondoggles throughout the country. I know in my riding you're going to have buildings that are partially constructed that aren't going to go any further than that, because in the communities I know of where they've received funding, they just will not have the money to complete them.
The point I'm raising in all of this is to say to you, as organizations representing municipalities throughout the country, that it's incumbent on you to be more aggressive in making the point to the government that this arbitrary deadline has to go by the wayside. Otherwise, it's going to be a waste of taxpayers' money if we have construction that doesn't get completed, because, as in my case, municipalities of 1,000 people won't be able to complete the initiatives they started.
Where are you in your approach with the government on this? You obviously recognize that there's a problem here. I put this to Mr. Cunningham, and to Mr. Généreux as well.
:
Well, we certainly don't want to be adding zeros to some of these numbers. It's an exorbitant amount, Madam Chair, and your constituents will be proud of the work you've done to represent their needs with these infrastructure funds.
Anyway, that's not so much for your edification, gentlemen, but because I think it is important to correct the record. We know there are people in the media who are clear about the facts, but we don't want the public who are watching these events to be left with any misunderstanding. I'm sure the honourable member would correct the record, especially since it was an NDP government with which our government negotiated the investments in his riding and province. As a matter of fact, I have three pages of investments for the Manitoba communities that he represents.
Having said that, I'll move on to other discussions, as I do want to talk about a number of things.
We've had a number of comments regarding the timeline. Obviously there is a requirement that this money be spent in a timely way. That is part of the initiative and part of what makes it stimulus. If we continue to drag out the deadline, it's no longer stimulus; the money will get spent when the money gets spent and the jobs will not be created now. Our government has been very focused on ensuring that the jobs are created now, and I know you all appreciate that. That's one of the challenges as we approach this impending deadline.
My understanding--and you can correct me if I'm wrong--is that 75% of the projects planned for this construction year were started as of September 1. That was a month ago, and the report to our government was that 75% of the projects that municipalities committed to starting this year were already under construction or in the process of being under way. Are you familiar with that statistic? That information might be helpful as you undertake your analysis.
I understand the desire to be a little bit politic, given that there is still an expectation of projects being approved and hope for more money. We're hearing pretty clear evidence and serious concern about significant delays resulting from the matching process. We also heard, and made, loud and clear calls for a gas-tax-type approach, specifically to avoid the delays we're hearing about. Today we're hearing confirmation that there have been significant delays in getting shovels to ground. Despite all of the warnings that delays would result from insisting on a matching project, this is exactly what happened.
With all due respect, we have been asking for a list of projects, with details on what has actually been spent, what has actually broken ground. On air the other day, I was promised by another Conservative member that I would get my list of the projects. We have been asking for months; we have not found a list. I'm hoping we can get information from the FCM, not a repeat of what the government has been saying without any evidence to back it up.
So far we have from you that only a third of the projects that were announced have been started. Half of the two-year time limit has now been lost, and there's been confirmation from you that if you don't meet the 2011 deadline for completion, then the municipality in question will be on the hook. I don't know about you, but that means I can't budget. It means I have a real question about whether to undertake a project next construction season, if I don't think I can finish it.
The conclusion I can't avoid is that this government has been happy to get the benefit of all of these thousands of announcements, knowing that at least two-thirds may not ever happen. If the money doesn't flow, come spring, lo and behold, this government might look a little more fiscally positive than their present projections would lead us to expect. I think that's pretty damning. We're looking at municipalities that have asked for help and Canadians that have asked for jobs to be created.
It sure looks to me as though this has all been more PR than job creation. So I will ask if you have any further information. We're not getting anything from the government. We would like to have details on the projects that have actually been approved, the projects that have started to break ground. We'd like to know where we stand. We want to know exactly how many jobs have been created. It's not enough for us to get a repeat of what the government is telling us, because what the government is telling us is not a hell of a lot.
I throw that open to anybody who can give me more detailed information about projects. I understand you have to be politic. You don't want to bite the hand that feeds you, but we're trying to get to the bottom of this.
:
Thank you, Madam Chair. I appreciate being recognized. I'd like to thank our guests for being here today.
Lest we all forget, what prompted all of this was our concern that we're in a global recession, and as a result of trying to do some things that would assist us in getting out of that global recession, we, like other industrialized countries, made the decision to try to help stimulate our economy.
If I have a minute at the end, Mr. Jean would like to say a couple of things. I hope to give him that time.
It is rather interesting. I was trying to think of what the definition of “stimulus” was, and Mr. Cunningham said it best--and I will quote you, sir. You said that if you want to be sure something gets done, you set a deadline. I have not heard any one of our guests say—and I'm delighted you are all here today—that when the municipalities were offered up their projects they did not understand clearly that there was a deadline. Obviously, there is a time deadline for some.
One of the members of our committee made the comment that she was looking for divergence and was surprised that she didn't hear it, but actually nor did I, and I would like to agree with her. I heard Mr. Généreux state that he was very happy that the federal government recognized the importance of infrastructure and was very happy that the federal government invested $4 billion. I heard Mr. Carlton say that infrastructure funding is one of the most effective tools. I heard Mr. Cunningham say not to go back to the 1990s and that John Baird has worked to cut the red tape. Mr. Perras said that hundreds of projects are running. So I agree that the divergence is not there.
I would also say that without the timeliness set for these infrastructure projects, I wonder how long it would take for the cities to spend these dollars. That is the whole point of stimulus, ladies and gentlemen.
I've heard talk about this gas tax format as being the best way to do it, but if that had been the case, there would have been no commitment necessarily from the province and certainly none from the municipalities to be able to create the kind of initiative that in fact we have. What we've been able to do is expand the value of a dollar to three dollars, and that's what's happened as a result of all of the levels of government participating in an unprecedented way.
My fast question for Mr. Cunningham is on the talk of inappropriate funding in ridings across this country. Sir, do you believe that the premiers of Manitoba, Quebec, Ontario, B.C., and Nova Scotia have conspired to help rig federal ridings in terms of stimulus funding?
:
Thank you, Madam Chair.
I just want to go back to a few questions you were asked. You answered one question that I thought was a little special. Certainly your municipalities are responsible for the engineers and the plans and specifications, but I think that if you are given time, you will be able to get them done. You don't have enough time. Maybe it isn't up to the federal government to look after this, but still, as you said earlier, there could have been more flexibility in the allocation of the funds. They could at least have helped you, have given you time to have the plans drawn up.
When the Minister came here in April or May, he was asked whether he didn't think that to build a bridge, or to build a road that was already planned ... I'm not talking about plans already drawn up by a municipality and specifications already in place. I'm talking about a road that is needed but that the municipality doesn't have the money for. It has no money to spend on plans and specifications and it can't invest in the road right away. It will need two years, is that not correct, gentlemen? So it is important to have some flexibility. I don't understand the question you were asked.
That being said, the third report says that 90% of the Economic Action Plan funds have been committed, and you don't seem to agree with this. We are also told that over 220,000 jobs have been created, and you don't seem to agree with this. Correct me when I'm wrong. We are also told that all of the necessary agreements are in place so you can receive the money, and you don't seem to agree with this. And we are told that the federal economic stimulus funds ... The Government has made commitments to over 4,700 provincial, territorial and municipal infrastructure projects, but you don't seem to be sure, and you are the ones on the ground.
Gentlemen, I may be putting you in a corner, but do you think the third report and the items I have just referred to are correct?
:
In the circumstances, we have to trust the federal government, because it is the only one with the statistics at present. We have no way of ascertaining what a commitment is and what a project actually underway is. I think that is where we want to have as much detail as possible.
My goodness, as one of our former premiers would say, "give us our share" so we can do our work as easily as possible. I can't say it too often: our interlocutor is the Government of Quebec. Let the federal government make agreements with the Government of Quebec, as fast as possible, so we can start our projects and just have one interlocutor to deal with. I think that is the solution, the formula, the recipe, that is the easiest for us to work and understand, the one that will also allow for the necessary adjustments and modulations, given that a number of our communities have needs.
I would like to come back to something said earlier. The infrastructure projects that a number of our small municipalities want to start up are future projects, while in large municipalities there is often an engineering, consultation and research department, that means there are always projects in the box. But we can understand that starting a process of defining an infrastructure project for a smaller community involves numerous steps. The project has to be defined and built, and documented before it is carried out. We have to find ways to ensure that these projects can also be completed within the time allowed.
:
And you're out of time.
Mr. Warkentin, I know you have some information you'd like to give us. If you give me one minute, I'd like to wrap up some things. Then we'll take that information.
As Mr. Martin indicated, this is the committee that reviews the way government spends money. For any government, whichever label it carries, it is important that taxpayers understand and are comfortable that there is an oversight. That's what this committee does.
We called you as the stakeholders of or the beneficiaries of some part of the infrastructure funding. Whatever information you give or do not give us, this is how the committee will proceed. It is in your best interest to give as much information as you possibly can to us. That's your prerogative. It's the committee that can ask you the questions, and if you don't supply the information, the committee does not have any more things to do then. Then it says, “Fine, that's what they want.”
But you represent large municipalities and small municipalities. It's your membership that you're representing. It's your membership that's being affected by these investments.
For example, were you aware that the government had demanded $3 billion way back in March that they wanted to give to projects that were shovel-in-the-ground-ready projects? Nothing happened. That money went back to the consolidated revenue fund. So if you are familiar with it.... Then the money got rolled over to the other funding. That's what public finance is: if you commit and do not utilize, it goes back. Then another budget comes. That is why the questions you've been asked were so direct.
What I would suggest is that in your closing remarks, if you have any additional information from your membership that has been rolled out to you as to the number of jobs that have been created.... It says there'll be 220,000 jobs created, or 190,000 jobs created. Has your membership indicated to you the number of people that they have employed or that the municipality has invested in? If you have that information, that would be good. If you don't have that information, I'm sure Mr. Warkentin has some information that he'll supply.
But I'll give you another example. Mr. Warkentin said my riding had investment. I did a photo op with my counterpart, and I got calls to my constituency saying that has not happened: the province put up the money, but the feds have not given the money. Those are the things people are dancing around saying, “What is the reason we're not getting the funds?” It was supposed to stimulate the economy. Did it stimulate the economy? You do not know because stimulation is an economic thing, as economists will say.
In your closing remarks, then, would you take the liberty of giving us as much information as you can?
Who will be speaking for FCM?
Mr. Cunningham, you will supply us information later?
Yes, Mr. Jean.
:
Thank you, Madam Chair.
I wish I could give you more statistics other than what Mike has already given. But these are our key messages.
One, our biggest concern is about the stimulus package and what happens after it's gone. We're worried about a long-term infrastructure deficit and how to fix it.
Two, we cannot afford to repeat the mistakes of the 1990s when federal and provincial governments pushed deficits off their balance sheets and into the local streets. Key investments such as the gas tax fund, GST rebate, and cost infrastructure programs must be maintained to protect our quality of life and strengthen our economy.
Three, in the near term, all orders of government must commit to keep the stimulus plan on track and put every single dollar to work in communities across the country. I think we all agree on that.
Four, to keep the stimulus plan on track, governments must continue to work together and show flexibility. Of course, it's a tripartite union to put these projects there. It's the federal government, the provincial or territorial governments, and of course the municipalities. Everybody has to be pulling in the same direction.
Thank you.
:
Thank you, Madam Chair.
The key message is that in spite of the fact that this is a short-term economic stimulus plan, efforts to rehabilitate infrastructure have to continue on a 15 year horizon. Unfortunately, I can't give you the information you want. I told Ms. Bourgeois that once the November 1 municipal elections in Quebec are over, we will be able to consult our members.
The Union had been calling for infrastructure programs for a long time, and we are pleased with it.
[English]
I'd like to remind everybody around this table of what we are talking about from a strategic point of view, and we've discussed this with our friends at the FCM and FQM. Forty-six percent of all the federal, provincial, and municipal revenues go to the federal government. Forty-six percent goes--tax, income tax--to the provinces and 8% comes to the municipalities. With that 8% we're supposed to do everything that we're being asked to do, plus there's downloading from our respective governments. We have been asking for a long-term view of structural adjustments on what we consider our key elements, such as infrastructure programs.
[Translation]
Work on infrastructure in Quebec has increased visibly, but nothing is perfect, it will take time. There have been examples in Quebec where programs were considered to be ending on a certain date. Extensions were given because of various things that happened.
[English]
All kinds of things happen. I'm doing a structural project right now in one of our villages. We dug to see if there were rocks. We dug in five places, but in between the places where we dug we found rock. This threw the project into an uproar because we had to come back and deal with the rock differently. There are all kinds of reasons why projects are not going as fast as possible. That's reality. We live in an imperfect world.
[Translation]
In conclusion, the UMQ would like to see both higher levels of government coordinate their priorities better so the programs will be better tailored to the situation in Quebec.
Thank you.
:
Thank you, Madam Chair.
Certainly we are again pleased and would like to point out how important this program to assist in upgrading our infrastructure is. I also join my colleagues in calling for permanent programs because of the need to plan the work of upgrading our infrastructure over time.
In terms of knowing the extent to which the programs have been rolled out, you are asking us to take on a responsibility that may lie with your own committee or the government. To ensure that what is going on everywhere in the country is being monitored, you need the resources to go and get that information. Providing accurate information requires considerable resources.
The discussion today hinged to a large extent on actual progress made in the infrastructure strategy. It is somewhat unfortunate that we did not have more concrete facts or ways of assessing it, but we still feel that things are moving in the right direction.
We have to agree on better terms and conditions, that will make it possible to move ahead quickly on these programs. We must not forget that it would be unacceptable to leave the money needed for upgrading our infrastructure on the table.
Once again, this means abiding by the division of powers. We have to find formulas that simplify access to this money and also provide flexibility in terms of deadlines.
I am not saying there should be no cut-off dates, but we must make absolutely sure that the money available is fully committed for improving the quality of life in our communities.
I hope we will be able to benefit from these programs and at the same time be able to avert any of the temptations of party politics that so often arise when these measures are rolled out.