The NDP argues the government is playing a “shell game” with taxpayer dollars and actually cutting new infrastructure spending nearly $2 billion next year by hiding existing program cash in the new Building Canada plan.
Municipalities say the federal infrastructure plan needs to be simplified and the funding approval process reviewed.
The government, however, insists many of the expenditure discrepancies are simply due to delays in signing agreements with the provinces and receiving funding requests from municipalities.
In the first report under interim Parliamentary Budget Officer Sonia L’Heureux (who is the parliamentary librarian), the PBO estimates the government has allocated enough cash over the next decade to cover the costs of federal infrastructure requirements.
Approximately $45 billion is needed to fund infrastructure at existing levels between 2014-15 and 2023-24, which the government has surpassed, says the PBO.
The 2013 budget announced total infrastructure funding of $53 billion, including $47 billion in new and renewed funding, as well as an additional $6 billion through existing program cash.
However, the PBO report shows the government isn’t meeting its planned annual infrastructure spending commitments due to ongoing expenditure delays.
The 2007 federal budget announced a seven-year infrastructure spending initiative, including the Building Canada Fund, the gas tax fund, a GST rebate for communities, a public-private partnership fund and base cash for the provinces, the report notes.
The PBO says the total planned federal infrastructure spending between 2007-08 and 2013-14 is approximately $30 billion, but only $25.4 billion — or 85 per cent of that — has actually been spent or is forecast to be spent.
“Actual infrastructure spending through 2013-14 is anticipated to be approximately $4.5 billion lower than initially planned in budget 2007,” the report says.
Of the total infrastructure allotment, only $4.4 billion — half of the planned $8.8 billion for the Building Canada Fund — has been spent or is expected to be spent by the end of the current 2013-14 fiscal year.
The PBO notes it contacted Infrastructure Canada, but the agency did not provide details on deferred funding for infrastructure projects and what that means to planned expenditures.
NDP finance critic Peggy Nash said the report shows the government is hiding cuts to new infrastructure spending by lumping existing program dollars into the revamped plan.
New infrastructure funding will actually be nearly $2 billion less next year and approximately $5.8 billion smaller over the next five years, the NDP notes.
“Jim Flaherty is playing a shell game with infrastructure,” Nash said in a statement.
The Conservative government’s 2013 federal budget announced a new $53 billion Building Canada plan (including new and existing funding) to be spent on capital projects between 2014-15 and 2023-24.
Karen Leibovici, president of the Federation of Canadian Municipalities, said the new federal infrastructure plan is welcome, but changes are needed to streamline the application process and provide more funding predictability for communities.
The current application-based funding program leaves too much uncertainty for cities, she said, and the delay in funding approval can push back construction timelines and prevent communities from issuing tenders.
“There’s all those problems that are inherent in not having a quick approval process,” Leibovici said.
A spokesman for Infrastructure Minister Denis Lebel said the federal government will fulfil its funding commitments for current and future projects.
The delays in allocating dollars are tied to project timelines and communities filing paperwork, said Mike Winterburn, director of communications for Lebel.
“Projects take time to complete and, under our grant programs, local costs are reimbursed after the work is done and claims are submitted,” Winterburn said.
Original Article
Source: canada.com
Author: Jason Fekete
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