No extension on stimulus cash for Montreal: Feds

The federal government has given cities two years to spend stimulus cash on construction projects and says Montreal won't get an extension as it deals with its current predicament.

The federal government has given cities two years to spend stimulus cash on construction projects and says Montreal won't get an extension as it deals with its current predicament.

That could put the city at a disadvantage now that it has suspended building contracts while it cleans up after a scandal involving construction companies, politicians, and the Mafia.

Montreal is working to create a more transparent bidding process while other cities across Canada are busily signing contracts for new roads, sewers and community centres.

Still, Ottawa's deadline remains firm.

"The rules are the rules and everyone is playing by the same rules," said Chris Day, a spokesman for Transport Minister John Baird.

"Municipalities have always been fully aware of the March 2011 deadline. They applied for projects that could meet that deadline and signed attestations to that effect."

He said the timeline is strict as it was established to spur economic activity and create jobs when they were needed most — during the recession that started last year.

"This is a stimulus program and the jobs and investments are needed now," he said.

Montreal announced the moratorium this week following its municipal election, and is still considering the ramifications of its decision.

"We're obviously aware that there's strict deadlines attached to federal funding programs," city spokesman Darren Becker said.

"It's premature to talk too much about what the impact will be on the federal programs. We'll probably have more information in the days and weeks to come."

Becker said borough officials will meet with Montreal Mayor Gerald Tremblay this week to discuss the contract awarding process and make recommendations.

The decision to suspend the awarding of new construction contracts came following a massive scandal that broke part-way through the election campaign.

On Sunday, Tremblay was elected to a third term despite accusations that construction companies — in collusion with the Italian Mafia — were funding political parties and boosting the cost of building projects.

A police investigation into the allegations is now underway and the province has announced new tendering rules for public contracts worth more than $25,000.

Quebec's elections body also announced a citizens' forum aimed at toughening political fundraising laws.

Others want extension

Other municipalities across Quebec have also called for an extension to the two-year deadline for stimulus spending. 

They say stimulus funds were slow to roll out and that this fall's municipal election caused further delays.   

Ottawa acknowledges the problems but — again — says there won't be any exceptions.

"We have [also] had provincial elections recently in B.C. and Nova Scotia and while it delayed things somewhat, we are still on schedule with those provinces and municipalities to identify and approve projects that can meet the timeline," Day said.

He said that before this fall's municipal election season, Ottawa announced over 400 specific projects worth more than $540 million in Quebec. There will be more in the province, he said.

"We continue to work as fast as possible to advance projects and create jobs," Day said. 

"In fact, we expect to make several announcements in short order."

It's not clear whether Montreal will be left out of those announcements because of the moratorium. 

In the United States, officials are making the winners of stimulus contracts known to the public, as part of an effort to minimize corruption. 

Ottawa has been stingier with its information and has not even been collecting information on who wins the contracts. 

Federal officials say municipalities and contractors are expected to obey the law, and that Ottawa shouldn't have to add red tape to its stimulus programs to prevent corruption.