Canadian municipalities can expect another round of infrastructure funding from the federal government, with the budget expanding the list of potential projects cities can consider.

The Community Improvement Fund will set aside $21.8 billion over 10 years from gas tax fund payments, beginning in 2014-15.

Municipalities had been getting $2 billion a year from the federal gas tax fund, but had called for the government to increase the fund annually at a rate of three per cent, the same as health care transfers. The budget stops short of that target, instead offering a two per cent increase per year.

Municipalities will also get another $10.4 billion over 10 years under the incremental GST Rebate for Municipalities.

A new Building Canada Fund to support infrastructure projects of national, regional and local significance will also provide $14 billion over 10 years.

Flexibility for cities

The budget says the total amount dedicated to infrastructure over the decade will be $70 billion, including renewal of a public-private partnership fund, $7 billion for First Nations infrastructure and a further $10 billion for upkeep of federal properties.

Finance Minister Jim Flaherty said municipalities wanted more flexibility with how they could spend their infrastructure money, and said more kinds of projects can now be considered.

Investments now considered infrastructure for the purposes of drawing from the gas tax fund now include highways, local and regional airports, short-line rail, short-sea shipping, disaster mitigation, broadband internet connectivity, brownfield redevelopment, culture, tourism, sport and recreation.

Ottawa mayor vows to use funds to clean Ottawa River

Ottawa mayor Jim Watson, who had pushed for the indexing of the gas tax funds, said the two per cent increase was a welcome development.

Watson said for a city like Ottawa, it means an additional $238 million over and above what they would have expected from the gas tax over the next 10 years.   "This is good news for the city of Ottawa and indeed good news for all cities across Canada," said Watson.

Watson said the additional funding will allow Ottawa to focus funds on cleaning up the Ottawa River. He said the third and final phase of the clean-up will require $55 million each from the federal and provincial governments.

"With today's budget, the dream of a clean Ottawa River is finally within reach," said Watson.

Among the other infrastructure measures announced:

  • $124.9 million to build a bridge-causeway between Nuns' Island and the Island of Montreal, as part of the New Bridge for the St. Lawrence that will replace the Champlain Bridge.
  • $25 million over three years to advance the Windsor-Detroit International Crossing project.
  • Up to $5 million to support the rehabilitation of the 80-year-old Port Weller Dry Docks, located on the Welland Canal near St. Catharines, Ont.
  • $248 million over five years to Environment Canada to revitalize Canada's weather services.
  • $19 million in 2013-14 to Parks Canada Agency to improve highways and bridges that pass through the parks.
  • An additional $67 million in the next two years to pay for rehabilitation of the West Block and Government Conference Centre.
  • $54.7 million in 2013-14 and $58.2 million over the next five years to VIA Rail for operations and to improve rail services to remote communities.