02/26/2008

The 2008 Federal Budget, tabled in the House of Commons by the Honourable Jim Flaherty, included a commitment to make the federal gas tax permanent.
Background:

The 2008 Federal Budget, tabled in the House of Commons today by Finance Minister Jim Flaherty, would make the federal gas tax revenue sharing of approximately $750 million a year a permanent source of infrastructure funding for Ontario’s municipal governments. This amount reflects the equivalent of 5 cents a litre. No escalator mechanism was included in today’s announcement.  

The Federal Gas Tax matures at approximately $750 million a year for Ontario’s municipalities in 2009. In last year’s federal budget, the Government committed to extending the federal gas tax for an additional four years to 2014.  

The federal gas tax is allocated to municipalities in Ontario on an entitlement basis providing significant flexibility for municipalities to invest in infrastructure priorities including roads and bridges, water and waste water systems, community energy, solid waste management, transit and capacity building. 

AMO has consistently advocated on behalf of municipal governments to secure the Federal Gas Tax as a permanent source of infrastructure investment revenue for municipalities in Ontario.

This permanent funding is in addition to the Building Canada Fund commitment made in last year’s Federal Budget that would result in approximately $3.2 billion for municipal infrastructure projects in Ontario over the next seven years.
 
The Budget also sets aside up to $500 million in support of capital investments to improve public transit across Canada for construction ready projects. The Budget also sets aside $400 million for a police officer recruitment fund to encourage the hiring of 2,500 new police officers nationwide. The federal government will enhance the ability for municipalities to assume responsibility for small craft harbours owned by the federal government by providing $10 million for the rehabilitation of harbour facilities and the environment. The Budget will also help to make renewable energy more attractive for investors and communities by extending the GST exemption to property leases for wind or solar power developments and expanding the capital cost allowance for clean energy projects such as geothermal or biogas generation.  

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