12/17/2007

A House of Commons motion called for permanent Federal Gas Tax funding for municipalities.
Issue:

Clarification of recent news reports indicating the Federal Government has made the Federal Gas Tax funding permanent.

Background:

The following motion was passed in the House of Commons last week with all party support:

That, consistent with the spirit of the Liberal New Deal for Cities and Communities, this House believes it is in the best interests of Canadians that the government should take steps to make permanent the sharing of the Federal Excise Tax on gasoline with all Canadian municipalities for the purposes of enhancing local community infrastructure.

The expression of support by the House of Commons for permanent Federal Gas Tax funding for municipalities is an important step forward. The next step will be for recognition of Parliament’s support for permanent Federal Gas Tax funding for municipalities in the Federal Budget. The 2007 Federal Budget extended the Federal Gas Tax funding for an additional four years to 2014. AMO and municipalities across the country will be seeking confirmation in the 2008 Federal Budget that the Government of Canada is committed to allocating the Gas Tax funding as a permanent source of infrastructure investment revenue for municipalities.

Historically, the Government of Canada has indicated that the question of permanency would be contingent on an evaluation of the current, 5-year gas tax agreement signed in 2005. The program evaluation is due to the Federal Treasury Board by mid-2009.  

Action:  

Individual municipalities have an important role to play in helping to secure permanent Federal Gas Tax funding. Municipal governments are responsible for demonstrating how their investments are furthering environmental sustainability as required by the current agreement. Municipalities are reminded that the reporting requirements and the evaluation process that begins in 2008 will be critical to continuing efforts to make the Gas Tax Funds permanent.