This archived article was published in February 2005. A new government was elected in January 2006.
Canadian government offers cities
long-term partnership and funding
By Tann vom Hove, Editor

City mayors from all parts of Canada congratulated the federal finance minister, Ralph Goodale, on producing an excellent budget for cities. Bob Chiarelli, Mayor of Ottawa, said that the Minister’s second federal budget contained some very good news for Canada’s cities. “I think, all in all, it’s a good budget for cities”, he said. Regina Mayor, Pat Fiacco, echoed his comments by saying that communities now had the money to build bridges, fixing roads and upgrading transit systems. Toronto Mayor, David Miller, called the budget very good news.

Canada's 2006 election

According to the budget, in 2005/06 the Canadian federal government will give municipalities 1.5 cents per litre of gasoline (petrol) tax revenues, amounting to Can$600 million a year. The share for a city like Ottawa is estimated to be some $15 million. The federal government collects 10 cents per litre of gasoline The Finance Minister also confirmed in his budget speech that by 2009/10, cities would receive five cents per litre or $2 billion per year nationally. “This tax sharing arrangement will continue thereafter indefinitely,” he added.

Ann Maclean, Mayor of New Glasgow and President of the Federation of Canadian Municipalities (FCM), said that with the 2005 budget the new deal for cities had become a real deal. “There is a confirmation of the need to reinvest financially into our cities and communities and also a commitment for a long-term partnership,” she explained.

The FCM said in a statement that with the 2005 budget, the Government of Canada had confirmed its partnership with Canada’s municipal sector.

“This means that we will work closely together to solve problems in our cities and communities. Together we will tackle the municipal infrastructure deficit; together we will ensure our cities have effective transit systems; and together we will work toward meeting Canada’s Kyoto targets and providing affordable housing for those who need it.”

“The budget’s commitments of $600 million in gasoline tax revenue, combined with last year’s $700 million goods and service tax (GST) refund, delivers $1.3 billion in new revenue to be shared by every municipal government in Canada. And the commitment to maintaining and replenishing existing infrastructure programs means that this is net, new revenue for our communities.”

The FCM was also delighted that the Budget delivered on a number of its key proposals. “The Government’s pledge to top up FCM’s Green Municipal Funds by $300 million demonstrates its already strong working relationship with the municipal sector to build sustainable communities. And with a portion of the funds refocused toward helping communities clean and redevelop their brown-field sites, and a portion of the gasoline tax flowing to cities and communities for transit and green infrastructure, Canada has taken a giant step forward in meeting its environmental goals,” the organisation declared.

Details from the 2005 budget
The 2005 Budget delivers long-term, stable and predictable funding as part of the Government of Canada’s commitment to a New Deal for Cities and Communities. Under the New Deal, federal, provincial, territorial and municipal governments will work together with other stakeholders to develop long-term strategies for improving our communities.

The Government of Canada is doing its part. In combination with full rebate of the goods and services tax introduced last year, the measures announced in Budget 2005 will provide Canadian communities with more than $9 billion in funding over the next five years.

Over the next five years, the Government of Canada will provide $5 billion to municipalities to support environmentally sustainable infrastructure projects such as public transit, water and wastewater treatment, community energy systems and the handling of solid waste.

Effective in 2005–06, Canada’s cities and communities will receive a share of federal gas tax revenues worth $600 million. This funding will increase until it reaches $2 billion annually, equivalent to 5 cents per litre of gasoline tax revenues, by 2009–10.

Specifically:
In 2005–06: $600 million
In 2006–07: $600 million
In 2007–08: $800 million
In 2008–09: $1 billion
In 2009–10: $2 billion

In addition to gas tax revenue sharing, the 2005 budget commits to renewing the Canada Strategic Infrastructure Fund, the Municipal Rural Infrastructure Fund and the Border Infrastructure Fund. Further details on the extension of these programs will be announced in future budgets.
3 Green Municipal Funds

Budget 2005 more than doubles funding for the Green Municipal Funds with new funding of $300 million. These funds, which are administered by the Federation of Canadian Municipalities, provide grants, low-interest loans and innovative financing to increase investment in infrastructure projects that deliver cleaner air, water and soil, and climate protection.

Examples of Federal Contributions to Infrastructure Projects:
• Halifax Harbour cleanup: $60 million
• Upgrade of Montréal’s metro system: $103 million
• Modernizing and expanding Toronto’s transit system: $350 million
• Twinning Trans-Canada Highway routes in Saskatchewan: $77 million
• Improving Canada–U.S. border crossings in British Columbia: $90 million
• Corridors for Canada highway infrastructure development in the Northwest Territories: $65 million