August 2017
Backgrounder

The federal Gas Tax Fund (GTF) is a permanent source of funding for municipal infrastructure. In 2016 AMO transferred $617 million to municipalities to invest in local infrastructure.

Ontario’s Infrastructure Deficit
Much of Ontario’s infrastructure was first built in the 1950s and 1960s and requires modern upgrades or replacement.  Population growth and other pressures also fuel the demand for new investment.  The 2008 Provincial-Municipal Fiscal and Service Delivery Review (PMFSDR) estimated that around $60 billion over ten years is required to maintain and upgrade municipal infrastructure and to pay for new systems needed to accommodate growth.  The GTF is one of the only permanent and stable sources of funding available to Ontario‘s municipal governments to reduce this infrastructure deficit.

A Unique Program
The GTF is also the only program that transfers money directly from the federal government to Ontario’s municipal governments.  Funds are distributed twice a year on a per capita basis without the need for an application, which helps municipalities plan for future priority projects.  Funds can be invested into infrastructure from 16 different project categories or can be used for capacity building projects that contribute to strategic asset management and long-term planning.  This flexible approach means federal funding can address the diverse needs found in all of Ontario’s municipalities.

Results Focused
The federal Gas Tax Fund and AMO’s administration provides results.  Since its launch in 2005, municipalities across Ontario have invested more than $4.3 billion of GTF in 6,700 infrastructure projects worth more than $11.9 billion.  For every $1,000 of GTF allocated to these projects, municipalities have invested on average an additional $1,800 from all other funding sources.  These projects have strengthened communities, improved residents’ quality of life and laid the essential foundations for long-term economic growth.

AMO’s Agreement with the Government of Canada
AMO administers funding for all Ontario municipalities (except Toronto).  AMO’s Agreement with the federal and provincial governments and the City of Toronto confirms GTF funding to 2023 and provides indexation of the funds which will grow municipal allocations by around 5% in 2016 and 2018.  Indexation ensures that the Fund grows over time so that it keeps pace with increases in the cost of living and the cost to do business.

To learn about how the federal Gas Tax Fund is at work in your community, visit www.gastaxatwork.ca.  Information about the program and AMO’s Annual Gas Tax Expenditure Report is available at www.amo.on.ca.