New Build Canada fund
Three levels of government pointing fingers; most cash remains in coffers for election year
The latest political football, better known as the New Build Canada Fund, continues to be kicked back and forth between the federal government, the provinces and Canadian municipalities. Instead of benefitting provinces and communities this summer, the fund is tied up in bureaucratic red tape and finger-pointing while billions remain in federal coffers.
The fund, worth $14 billion over 10 years, was announced in the 2013 budget. A year later, it was confirmed in the 2014 budget. Details were finally released late this March, just days before the program was to start. Needless to say, there were a limited number of applications because no one knew the details, such as who would administer the program and which projects are eligible for funding. The criteria is now explained on Infrastructure Canada’s website, which is apparently the new way to handle bi-lateral agreements.
By April 1, most decisions on this summer’s major construction projects are long done for the provinces and municipalities. It takes months to prioritize projects, plan them, call for tenders, award those tenders and be ready to go. The construction season is already well underway for 2014 and hardly a dime has flowed.
The delays effectively mean most major P.E.I. projects will be shelved until 2015, when magically, there will be a federal and perhaps a provincial election. That means a third announcement is likely for the same money, likely prior to, or during, a late spring federal campaign.
Canadian municipalities hammered Ottawa about the delays at their annual meeting in late May. The FCM passed a resolution calling on governments to get the funding on track so projects can be started. The P.E.I. federation has added its critical voice. President Bruce MacDougall argues that municipalities were promised that money would be ready to go by March 31 and it is now mid-June and nothing has happened.
And that’s when the blame game really heated up as it didn’t take long for Ottawa to return the favour. A spokesperson for federal Fisheries and Oceans Minister Gail Shea said delays in funding for P.E.I. are not the fault of the federal government and blamed the province and Island municipalities. She said money is ready to flow but the province has failed to prioritize projects and work with municipalities.
P.E.I. companies and municipalities have expressed concern over the lost opportunities, but strangely, not much has been heard from the province. P.E.I. Transportation Minister Robert Vessey did sign a new Gas Tax Fund deal with Ms. Shea last week. It’s a proven success for infrastructure projects where some government tax profits from gasoline sales are diverted to the provinces to administer for roads, bridges, water projects and the like. P.E.I. is projected to receive $163 million under the gas fund over the next 10 years.
The province, despite the huge dollars at stake, has largely ignored the New Build Canada Fund. P.E.I. is projected to receive $25 million a year for 10 years, plus a per capita bonus of $2 million a year — money this province could certainly use. But like Ottawa, the provincial government would like to limit its spending this year to help achieve a balanced budget. If those major construction plans are placed on hold until 2015, so much the better for both governments.
The fallout is huge, especially in Atlantic Canada. Many workers will miss out on employment opportunities and be forced to head west. Valuable projects will be idle for another year, and P.E.I. companies will miss out on much-needed revenue. Losing this construction year is a terrible waste.