03/19/2007

The 2007 Federal Budget was a step in the right direction for municipal infrastructure.
The Honourable Jim Flaherty, Minister of Finance, tabled a budget that although overwhelmingly focuses on the long-term economic plan by restoring fiscal balance and furthering debt reduction, does build on the 2006 Federal Budget investments in infrastructure with an extension of the “Gas Tax Fund” for municipalities; and, allocation of new funding to support additional investments in municipal infrastructure projects.

Background: The 2007 Budget implicitly acknowledges the need for continuing and expanding Federal involvement, with short-term measures to help maintain municipal infrastructure, including local cultural and recreational facilities.

Budget Highlights:

Budget 2007 builds on the commitments in 2006 for infrastructure, with key elements for a Federal role in infrastructure, including:

The extension of the federal “Gas Tax Fund” to municipalities by another 4 years from 2010-11 to 2013-14 is a welcome step in addressing Canada’s municipal infrastructure deficit and, per current arrangements, will directly result in additional funding for Ontario municipalities of almost $3 billion over 4 years. This is a tremendously important development and one that AMO had been advocating for on behalf of its members.

A new “Building Canada Fund” will allocate $6 billion in infrastructure funding to provinces and territories over 4 years on a per capita basis. That will provide the Government of Ontario with additional infrastructure funding of more that $2 billion over 4 years. While it is not clear how much will end up in municipal infrastructure, there is a clear signal that municipal infrastructure is an intended destination for some of this funding.

Budget 2007 commits to an investment of $250 million per year starting in 2007–08 to provinces and territories for the creation of new child care spaces. It is anticipated that the Government of Ontario will receive approximately $90 million of this important and welcome funding. The Budget also commits to the extension of the existing $850 million under current funding agreements for early learning and child care to 2013-14.  

Budget 2007 targets $45 million over 3 years to help provinces and territories with capital costs related to construction and renovations for physical accessibility for persons with disabilities. This may be good news for municipalities in Ontario as they proceed to implement their responsibilities under the Accessibility to Ontarians with Disabilities Act (AODA), 2005.   

Action: For your information.