Federal budget 2015 targets gridlocked urban commuters with mass transit fund
OTTAWA – Gridlocked commuters in Canada’s major cities finally got a green light Tuesday in the form of a new fund in the federal budget to help finance significant transit projects and upgrades.
The new money is an answer to the calls by city mayors and several provincial premiers, all of whom have been clamouring for financial support from Ottawa for badly needed new roads, bridges and mass transit lines.
There’s a catch, however: the Conservatives need to get re-elected first.
The new fund doesn’t start up until 2017-18 – well after this October’s scheduled federal election. It includes $750 million over two years, followed by $1 billion a year, “ongoing thereafter,” to help finance public-private partnerships, or P3s, to pay for projects and upgrades with a combination of public and private investment.
Toronto is among those cities with a major transit project in the works, which is why Mayor John Tory was no doubt watching closely. Tory will also be playing close attention Thursday when the Ontario government delivers its financial plan.
“Toronto has partners in both (the federal and provincial governments) to build transit that will (get Toronto moving) and create jobs,” Tory tweeted after the budget was introduced.
Not everyone was as happy. Ontario Finance Minister Charles Sousa sounded more frustrated than a left-lane speed demon stuck behind a minivan.
“The amount that’s being brought forward, frankly, is only crumbs of what we need,” Sousa said, dismissing the measure as a “small step in the right direction.”
Another new initiative, the Canada 150 community infrastructure program, came with ties to the 150th anniversary of Confederation in 2017, but few other details, other than a vague commitment to support the renovation, expansion and improvement of existing infrastructure across the country.
The budget said the costs would be shared with community organizations and municipalities, and that the plan would create jobs. Further details are to be announced “over the coming months.”
It was the larger initiative on major transit projects that Finance Minister Joe Oliver highlighted in a budget speech aimed squarely at the suburban voters – particularly in Toronto – that the Conservatives hope to connect with in October.
“Our investment in infrastructure is three times greater than the previous government’s,” Oliver said in the text of his speech. “Anyone who lives in or near our thriving and fast-growing cities knows the reality of traffic gridlock.”
Neither Oliver nor the budget document made mention of the fact that public transit reduces greenhouse gas emissions by taking vehicles off the road. Rather, it helps “to reduce overall urban congestion, which helps to get goods to market faster and supports productive and growing cities.”
Oliver said the P3 model for the transit fund will require “a significant role for the private sector” which will leverage their expertise to make projects “affordable for taxpayers and efficient for commuters.”
The budget also maintains the 10-year, $53-billion program to enhance provincial and municipal infrastructure that was announced in 2014.
“Governments have learned” that drawing on private-sector expertise to design, build, finance and operate infrastructure projects can lead to better value for money, it notes.
“The private sector also assumes a share of project risks … which is anchored by private capital at risk,” providing the necessary incentive to private partners to deliver projects on time and minimize costs over their life cycle.
The Conservatives noted that since 2006, they have invested more than $2 billion into a variety of projects, including a subway extension in Toronto, new light rail systems for Ottawa and Kitchener-Waterloo and enhancements in Vancouver and Edmonton.
In January, Ontario Premier Kathleen Wynne used a high-profile speech in Ottawa to urge leaders of all governments – federal, provincial and municipal – to invest heavily in infrastructure.
“This isn’t about politics or who gets credit,” Wynne told the Canada 2020 think-tank luncheon.
“As we enter an election year, I issue a challenge to all the federal parties and their leaders.”