Prime Minister Justin Trudeau announced Monday the federal government is giving gas-tax payments to municipalities early this year.
He said $2.2 billion in expected infrastructure funding will be advanced to cities to ease cash-flow concerns.
In a normal year, municipal governments would receive half of this money in the summertime and half in six months but the effects of the COVID-19 pandemic mean that isn’t reasonable, Trudeau said.
“There is a need right now for liquidity, for support as they deal with this COVID crisis,” Trudeau said from his Ottawa residence.
The Federation of Canadian Municipalities (FCM) said the measure is modest and preliminary, in a Monday press release.
“To be clear: this is not new money,” it said.
This money was already a part of municipal budgets and according to the release, it only helps immediate liquidity issues.
Moncton Mayor Dawn Arnold said this will not significantly impact the city’s capacity in COVID-19 response. She is hopeful this is just the beginning.
Fredericton mayor Mike O’Brien said in an email statement:
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“What interests me… is the Prime Minister’s confirmation of his readiness to engage with municipalities on solutions related to the non-recoverable COVID-19 losses affecting our budgets.”
The FCM estimates $10-15 billion in non-recoverable losses for municipalities across Canada.
The group said both federal and provincial governments need to plan to provide emergency funding.
Municipalities across the country have been asking for help, according to Saint John Mayor Don Darling.
“Infrastructure investments are a very appropriate place to inject more cash,” he said.
Saint John received nearly $4.5 million when the federal government decided to help with the city’s multi-million dollar shortfall last year.
Darling is hoping to hear the same news this year, as Trudeau promised a follow-up to his announcement.
“We need to do more and we will do more,” said Trudeau.