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In Depth

Federal Budget 2008

Cities must wait years for new infrastructure funding

New Crown corporation to build public-private partnerships

February 26, 2008

CBC News

Municipalities struggling with the costs of roads, bridges and public transit didn't get the cash injection they were seeking: most new infrastructure spending in the 2008 budget won't reach them for years.

Finance Minister Jim Flaherty announced that the federal Gas Tax Fund, which is currently only runs to 2014, would become permanent.

The fund, first introduced in 2004, can be used by municipalities for public transit, water and wastewater infrastructure, and local roads.

The federal government will pump $1 billion into it in 2008-09 and the fund will climb to a permanent level of $2 billion annually starting in 2009-10.

"Municipalities large and small, from coast to coast, will be able to plan and finance their infrastructure needs with this additional funding, every year, forever," Flaherty said in the prepared text of his budget speech.

Boosting public-private partnerships

The government also announced a new source of infrastructure funding for municipalities, focusing on public-private partnerships (known as P3s).

The budget includes the creation of a new Crown corporation called PPP Canada Inc., which will invest in such partnerships with private companies using loans, loan guarantees, non-voting shares and repayable contributions.

"It will be the first public-private partnership office of its kind at the federal level in Canada," Flaherty said. "By increasing our use of P3s and taking into account contributions by other levels of government, we should be able to leverage a $100-billion investment in infrastructure."

Transit money for Vancouver, Peterborough, Montreal

The government has also set aside up to $500 million for public transit projects that have been previously announced or where municipal commitments will be made before the end of March.

It includes money for:

  • The Evergreen Light Rapid Transit System in Vancouver.
  • The re-establishment of a rail link between Peterborough, Ont., and Union Station in Toronto.
  • New equipment and upgrades to dedicated rapid transit routes for the Aéroports de Montréal.


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