Federal government open to changing funding formula for new infrastructure cash

The federal government is open to renegotiating the formula that divides the cost of infrastructure projects three ways going forward, but "may not" be able to apply that change to existing funds left unspent by the previous government.

New funding model is not going to apply to existing infrastructure funds

Federal Infrastructure Minister Amarjeet Sohi tells reporters how he is approaching the infrastructure spending issue 1:44

The federal government is open to renegotiating the formula that divides the cost of infrastructure projects three ways going forward, but "may not" be able to apply that change to existing funds left unspent by the previous government. 

"I served on city council for eight years before being elected into this position. and I absolutely understand the challenges that cities face," Infrastructure Minister Amarjeet Sohi said Thursday after a meeting with big city mayors. "For every dollar Canadians pay in taxes very small portion of that is collected by local governments."

Sohi made the comments at a press conference in Ottawa after meeting with the Big City Mayors' Caucus — a group of mayors from Canada's largest cities whose meeting is hosted by the Federation of Canadian Municipalities. 

He said the federal government is open to adjusting the existing formula because "we understand those realities."

"We may not be able to adjust the current formula for the existing funds. For the new $60 billion over the next ten years we are definitely open to that and we will do that in consultation with big city mayors, other partners, FCM and other stakeholders."

Infrastructure and Communities Minister Amarjeet Sohi, Vancouver Mayor Gregor Robertson and Ottawa Mayor Jim Watson listen to a question during a news conference in Ottawa,Thursday. (Adrian Wyld/Canadian Press)

Presently the federal, provincial and municipal levels of government split the cost of an infrastructure project equally. Sohi refused to give an indication of what the new split would look like saying he did not want to presuppose the outcome of those discussions. 

'As few strings as possible'

Sohi said there is from $7 billion to $9 billion in infrastructure funding left in the Building Canada Fund that was not allocated by the previous government. The vast majority of the money in that pot is earmarked for projects with a three way split.

The minister said he wanted to get this existing money flowing quickly and would look at improving the federal approval process to make that easier to avoid missing another construction season. 

"We want to make sure that our approach is as flexible as possible," he said. "We need to have as few strings attached to the funding keeping in mind the outcomes that we wanted."

Vancouver Mayor Gregor Robertson said flexibility was vital to ensuring projects went ahead as soon as possible. Social housing, transportation, and water and sewage issues are priorities for most municipalities in Canada, he said.

"We think we have a good solid working relationship now with the minister and federal government. We are very much aligned in terms of flexibility and urgency to move the investment into infrastructure," he said. 

Mayors from Calgary, Edmonton, Toronto and Ottawa weigh in on infrastructure, pipelines and a new partnership with the federal government. 16:19


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