Image of road work

Municipal Infrastructure for Economic Recovery

Backgrounder August 06, 2021

Municipal Implications

Ontario communities need guaranteed, long-term infrastructure funding. Federal and provincial funding for infrastructure helps ensure that municipal governments can renew and update costly infrastructure systems, maintaining access to vital services that residents and businesses depend upon every day. Further, as the economies of Ontario and Canada turn to recovery from the pandemic and lockdown, infrastructure funding programs will continue to be vital to economic development in Ontario.

The following programs provide important support for infrastructure development in Ontario municipalities:



Canada Gas Tax Fund*

The current ten-year agreement provides about     $9 billion for Ontario, with $853 million allocated to Ontario in 2021.

*renamed the Canada Community-Building Fund as of June 29, 2021

Investing in Canada

The Investing in Canada Infrastructure Program (ICIP) provides up to $30 billion in combined federal, provincial and municipal investments in communities over the next 10 years.

ICIP streams in Ontario:

  • Public Transit Fund: $8.3 billion federal funding ($1.62 billion allocated to 85 eligible municipal governments outside of Greater Toronto and Hamilton Area).
  • Green Infrastructure Fund: $2.8 billion federal funding ($2.25 billion allocated for subway expansion).
  • Community, Culture and Recreation Fund: $407 million federal funding.
  • Rural and Northern Communities Fund: The federal government will be providing $250 million.
  • COVID-19 Resilience Fund: Up to $1.05 billion in joint federal-provincial funding

All streams have now been opened with the latest intake for drinking water projects in small communities announced on July 13, 2021.  

Permanent Transit Funding

In 2021 the federal government announced permanent transit funding of $3 billion per year, beginning in 2026-27.

Disaster Mitigation and Adaptation Fund

In the 2021 budget the federal government included $1.4 billion to top up the Disaster Mitigation and Adaptation fund.

Ontario Gas Tax for Transit

Funding of $375 million per year has been announced for 2021 for municipal transit systems.

Connecting Links Program

This fund helps municipalities repair designated municipal roadways and bridges that connect provincial highways through a community or to a border crossing. Program funding covers up to 90% of eligible project costs, to a maximum of $3 million for road projects and $5 million for bridge projects.  The program is scheduled to provide $30 million for 2020-21.

Ontario Community Infrastructure Fund

This fund was created in response to the Provincial-Municipal Road and Bridge Review led by AMO and MTO. The fund uses a formula to recognize that municipalities have different infrastructure needs.  OCIF provides $200 million annually to communities under 100,000 in population for critical infrastructure.


In addition to the funding outlined above, the federal and provincial government have committed $2.15 billion in funding through the Safe Restart Agreement to support municipal transit systems during the COVID-19 pandemic. The Province also provided an additional $500 million to support municipal operations in 2021.


Municipal governments own more of Ontario’s core infrastructure than any other order of government. These facilities are essential to our economic prosperity, health and quality of life, and include:

  • drinking water
  • sewage and waste disposal
  • parks and recreational facilities
  • social housing
  • local roads and bridges
  • public transit.

Much of this infrastructure was first built in the 1950s and 1960s and needs upgrade or replacement to continue serving our communities, ensure access to social and economic opportunity, and protect the environment. A growing population in parts of Ontario fuels the demand for new investments.

Additionally, the Ontario asset management planning regulations are now in place. Municipalities must have a strategic asset management policy and must implement the plan to cover core assets by 2022, and all assets by 2024. Federal government funding through the federal Gas Tax Fund and the Federation of Canadian Municipalities (FCM) has provided important support to build municipal asset managemet capacity. AMO will continue working with the Province to support our member municipalities in implementing their strategic asset management plans and building their asset management capacity.


Craig Reid
Senior Advisor