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$616 Million in unspent infrastructure money could help speed up project approvals

The federal government left more than $616 million in infrastructure money on the table at the end of fiscal 2014-15, with the department in question warning that it almost never spends everything it can in a given year.

Liberals promise to increase infrastructure spending by $6 billion a year for decade

Calgary city council has identified a number of projects it hopes are eligible for federal infrastructure funding. (Evelyne Asselin/CBC)

The federal government left more than $616 million in infrastructure money on the table at the end of fiscal 2014-15, with the department in question warning that it almost never spends everything it can in a given year.

Most of those dollars —about $290 million — were destined for projects like waste water treatment facilities, transit, national highways and green energy programs that met "national priorities" to help grow the Canadian economy and create a cleaner environment.

In all, the federal government spent nearly $3.1 billion on infrastructure in the fiscal year that ended March 31, 2015.

The reason for the lag in spending on large-scale infrastructure projects is that they take time to plan and build, which makes them subject to delays beyond the control of the federal government, government documents show.

Even those projects that have started on time don't get money in real time. Federal cash only flows when cities or provinces submit their expenses for funding, a "key risk-management approach" for Infrastructure Canada that ensures the government "only pays for work that has been undertaken," according to parts of the department's annual performance report tabled in Parliament late last month.

It also takes time for the government to review funding applications, further delaying when funds can move out the door.

It's an issue the federal Liberals have been aware of since they took office. The government is on the verge of announcing new measures to speed up applications so money destined for their ambitious infrastructure program doesn't sit idle in federal coffers waiting for approval.

The Liberals have already removed the requirement for cities and provinces to test the market for a private sector partner to help pay for large-scale projects. The new measures are expected to build on what Infrastructure Canada has already done to streamline the approval process.

Economy needs boost

The Liberals have promised to increase infrastructure spending by an average of $6 billion per year over the next 10 years, raising the federal investment to $125 billion during that time.

The extra money is supposed to be spread equally to public transit projects, "green" infrastructure like wastewater facilities, and social infrastructure like affordable housing.

It is hoped the money will give the Canadian economy a badly needed shot in the arm. Research from the Conference Board of Canada suggests that for every $1 billion in infrastructure spending, the economy grows by about $1.14 billion and 16,700 jobs are created.

The Liberals want to put any unspent infrastructure money into the gas tax fund, which gives money directly to cities to pay for the roads, highways, bridges, public transit, water and sewer systems that Canadians use every day.

To do so, the government will have to go to Parliament for approval.

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