Use billions of dollars in infrastructure funding or lose it, Ottawa warns hesitant provinces

In the budget, the federal government warned that ‘as a measure of fiscal prudence, any uncommitted funds after (March 31, 2023) will be reallocated to other priorities’

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OTTAWA – The Liberal government is giving premiers a use it or lose it style ultimatum for billions in infrastructure money, pushing provinces to decide at least where and how they will spend $7.3 billion in federal cash.

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Last week’s budget included a new provision for infrastructure dollars that were first announced in 2018. The government wants provinces to finalize plans on how they will spend the money by March 31, 2023.

In the budget, the government warned that “as a measure of fiscal prudence, any uncommitted funds after this date will be reallocated to other priorities.”

Jean-Sébastien Comeau, a spokesperson for Infrastructure Minister Dominic LeBlanc, said they wanted provinces to finalize their plans.

“Federal funding cannot be unlocked unless provincial and territorial governments identify priority projects and agree to share the costs with the federal government,” he said. “While several provinces and territories have successfully allocated the vast majority of their funding envelopes, a number of them have yet to allocate over 50 per cent of the federal funding earmarked for their jurisdiction.”

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The deals with the provinces over infrastructure money commits provincial governments to pay anywhere from a third to half of the cost of projects funded with the federal dollars. The new timeline only requires them to decide where the dollars are going, giving them up to 2033 to actually build new projects.

There is a big range between provinces on how much of their federal funding they have committed. Manitoba has plans in place for all but one per cent of the money, while Newfoundland has not defined plans for 59 per cent of the cash.

In dollar figures, Quebec has the most money still to commit with $3.3 billion not yet allocated, British Columbia has $1.3 billion and Ontario has just over $1 billion.

New Brunswick has 58 per cent of its money unallocated, roughly $400 million. The province’s Premier Blaine Higgs said they’re not concerned about the new deadline. He said the federal government has also offered more flexibility in how the money gets spent.

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“I am very encouraged by this change and I just think it’s the right thing to do. It means we can do more with the money we have,” he said.

He said the province viewed this as ten-year plan and has been moving at that pace.

“The deal was done in 2018 for 10 years and here we are at the midpoint, roughly. And we were at midpoint in spending.”

The original infrastructure deal had the federal money broken into different streams, with some of it designated for public transit, some for culture and recreation projects, some for green projects and some for rural projects.
Higgs said the changes in the budget also give them more flexibility to move money between streams and that will help his province.

“It didn’t apply to New Brunswick as it would apply to the City of Toronto, and having a massive subway system, so that becomes the situation that allows us more flexibility,” he said.

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Most of the infrastructure dollars flow through to municipal projects. Federation of Canadian Municipalities president Joanne Vanderheyden said communities have the projects.

“Municipalities remain committed to turning federal infrastructure investment into projects that benefit Canadians as quickly as possible. Municipalities have local projects that are shovel ready and shovel worthy – in particular water and wastewater infrastructure and community, culture and recreation facilities,” she said.

Vanderheyden, who is also the mayor of Strathroy-Caradoc, a community in southwestern Ontario, said they are ready to work with provinces to move onward.

“We look forward to working with our provincial/territorial and federal counterparts to advance those projects.”

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