As Canada's infrastructure continues to crumble, municipal leaders across Canada are disappointed to see themselves left out of Tuesday's federal spring economic update.
Ottawa Councillor Tim Tierney, who also serves as first vice-president of the Federation of Canadian Municipalities (FCM), told the Toronto Sun that he was hoping to see some relief for Canada's $294-billion municipal repair backlog, pointing out that 14% of Canada's public infrastructure is rated in poor condition.
"Municipalities are ready to work with the federal government, but on municipal priorities," Tierney said. "We could have certainly taken a lot more of that money and invested it and dumped it into more infrastructure."
The update, he said, missed a clear opportunity to accelerate infrastructure funding, which he described as the fastest possible lever the Mark Carney Liberals have to make good on ending Canada's affordable housing crisis.
"If they want housing, we need lots of money for infrastructure," he said. "We can get a return on that investment right away."
Development Charges an Issue
Earlier this month, the federal government launched a $51-billion "Build Communities Strong" fund, described by the prime minister as a decade-long "generational investment" to build more housing. Part of the pitch by both the federal and Ontario governments to access funding to support housing is tied to cutting development charges — a "carrot-and-stick" approach linking the availability of government funds to a municipality's willingness to cut the charges.
Announced last month, the Canada-Ontario Partnership to Build committed $8.8 billion over 10 years toward the fund, but is only available to municipalities who commit to cutting development charges in half. Development charges are fees paid to municipalities by homebuilders to pay for things like basic utilities, roads and related infrastructure.
Once regarded as a small fee in new home builds, development charges — especially in the Greater Toronto Area — have evolved to become a significant portion of the cost of a new home. Toronto's development charges skyrocketed by 855% for detached single-family homes, increasing from an average of $14,000 in 2011 to nearly $138,000 last year.
Loss of Gas Tax Revenue Significant
While ballooning development charges are blamed as a driving factor in making Ontario's homes unaffordable, Tierney said that shortfall has to come from somewhere — particularly for cities like Ottawa with vast rural areas.
"That's our challenge, to make sure we keep pressing the federal government," he said, lamenting the recent decoupling of federal fuel taxes — the now-abolished federal gas tax fund — from infrastructure funding, replaced earlier this month by a more nebulous funding stream in Carney's Build Communities Strong Fund.
"Gas tax revenue was a steady stream of income for municipalities. We think that's the best avenue because we know what we have coming in and we can apply that to roads and infrastructure and all the things that help support all these other causes."
"If we're building quicker across the country, if we want to build more housing, you need to be able to have pipes, sewers and transit," Tierney added.
