On March 22, Finance Minister Bill Morneau rose in the House of Commons to present the federal government’s budget for 2017.
Prior to the release of the budget, ACEC participated in a stakeholders’ lock-up. Participation in the budget lock-up is by invitation and allows stakeholders and media to preview the budget document in advance of being tabled in Parliament.
While ACEC is pleased that the budget continues the government’s commitment to infrastructure from the previous budget, there is relatively little new information or new funding. ACEC is also pleased that elements of Minister Morneau’s Fall Economic Statement such as the creation of an Infrastructure Bank and a National Trade Corridors Fund, have been reaffirmed in this budget.
ACEC had expected more details on Phase 2 of the infrastructure program and the new Infrastructure Bank. The lack of details around the carbon pricing is also disappointing as private and public sectors require this information to make informed business decisions. Nevertheless, ACEC is supportive of the government's intent and looks forward to hearing additional information on these initiatives.
A new initiative included in the budget in which ACEC sees potential merit is the initiative to develop new building codes to retrofit buildings to reduce energy consumption and to new net-zero energy buildings.
The 2017 Budget continues commitments to infrastructure made in the previous budget and Fall Economic Statement including:
- The creation of an Infrastructure Bank that will invest $35B over 11 years in loans, with $5B for public transit;
- $20.1B over 11 years for public transit projects through bilateral agreements with provinces and municipalities;
- $12.9B in green infrastructure;
- $2B over 11 years for rural and northern communities;
- $2B over 11 year for a New Trade Corridors Fund with an additional $5B through Infrastructure Bank loans;
- A New Canadian Centre on Transportation Data;
- The budgetary balance is expected to show deficits of $23.0 billion in 2016–17 and $28.5 billion in 2017–18.
Also noteworthy is the Infrastructure Bank’s mandate to collect data to improve knowledge on the state of municipal and provincial infrastructure; it is applauded by ACEC as a sound practice to identify infrastructure needs and measure effectiveness. While the focus on green infrastructure will encourage and support sustainability, ACEC is disappointed the budget did not place more focus on the harmonization of federal and provincial approvals to reduce red tape and provide clarity.
On balance, this appears to be a positive budget for most of the consulting engineering sector. ACEC will continue to work with the government on operational aspects of the budget to ensure that successful implementation of the budget is effective, efficient and timely for ACEC members, their clients and Canadians.
ACEC has summarized the following selected highlights from the budget documents provided by Finance Canada.
INVESTING TO CREATE JOBS AND BUILD STRONG COMMUNITIES
Budget 2016 laid out the Government’s plan to make investments in public transit, green infrastructure and social infrastructure.
The Fall Economic Statement committed an additional $81 billion in infrastructure investments, starting in 2017–18.
Budget 2017 expands on the commitments made in Budget 2016 and the Fall Economic Statement and proposes to:
- Build better connected communities through public transit.
- Encourage Canada’s transition to a clean growth economy through investments in green infrastructure.
- Build a better future for rural and northern communities.
- Build an inclusive National Housing Strategy.
- Strengthen cultural and recreational infrastructure.
- Deliver better transportation infrastructure to help support trade.
- Launch a Smart Cities Challenge.
- Establish the Canada Infrastructure Bank.
The Government is committed to an evidence-based approach to decision-making and will be implementing new approaches to measure the impact of its infrastructure investments. The Government’s data strategies will include:
- A data initiative led by the Canada Infrastructure Bank to improve knowledge on the state of municipal and provincial infrastructure.
- $50 million for Transport Canada to enhance the collection and analysis of transportation and trade-related data to help target investments, support innovation and track results.
ENCOURAGING INNOVATION WITH THE SMART CITIES CHALLENGE
To encourage cities to adopt new and innovative approaches to city-building, the Government proposes to provide Infrastructure Canada with $300 million over 11 years to launch a Smart Cities Challenge Fund.
DELIVERING RESULTS WITH THE CANADA INFRASTRUCTURE BANK
In its 2016 Fall Economic Statement, the Government announced plans to establish a new Canada Infrastructure Bank.
It will be responsible for investing at least $35 billion over 11 years, using loans, loan guarantees and equity investments. These investments will be made strategically, with a focus on large, transformative projects such as regional transit plans, transportation networks and electricity grid interconnections.
BETTER DECISIONS THROUGH BETTER DATA
The Government of Canada and the Canada Infrastructure Bank will work in partnership with provinces, territories, municipalities and Statistics Canada to undertake an ambitious data initiative on Canadian infrastructure.
The data initiative will support efforts to:
- Provide comparable data and information on issues such as infrastructure demand and usage for jurisdictions across the country.
- Provide a national picture on the state and performance of public infrastructure across asset classes.
- Deliver high-quality data analytics to help inform policy and decision-making, and promote fact-based dialogue between all orders of government.
- Track the impacts of infrastructure investments so that governments can report back to Canadians on what has been achieved.
Further details on the initiative will be announced in the coming months
BUILDING STRONG COMMUNITIES WITH PUBLIC TRANSIT
Budget 2016 focused on making immediate investments of $3.4 billion over three years, to upgrade and improve public transit systems across Canada.
To support the next phase of ambitious public transit projects, the Government will invest $20.1 billion over 11 years through bilateral agreements with provinces and territories.
In addition, the new Canada Infrastructure Bank will invest at least $5 billion in public transit systems.
CREATING CANADA’S CLEAN GROWTH ECONOMY
Budget 2016 included investments of $5.0 billion over five years in infrastructure that protects communities and supports Canada’s ongoing transition to a clean growth economy.
The 2016 Fall Economic Statement announced the Government’s investment of $21.9 billion over 11 years to support green infrastructure, including through targeted investments by the new Canada Infrastructure Bank.
To advance Canada’s efforts to build a clean economy, Budget 2017 lays out the Government’s plan to invest $21.9 billion in green infrastructure, including initiatives that will support the implementation of the Pan-Canadian Framework on Clean Growth and Climate Change.
Investments to support Canada’s transition to a clean economy will flow through three distinct streams:
- Bilateral agreements: $9.2 billion will be provided to provinces and territories over the next 11 years, on a base plus per capita allocation basis, to support priority projects, including those that reduce greenhouse gas emissions, deliver clean water, safely manage wastewater, help communities prepare for challenges that result from climate change, and help build cleaner, better-connected electricity systems.
- The Canada Infrastructure Bank: At least $5 billion will be available over the next 11 years for green infrastructure projects, including those that reduce greenhouse gas emissions, deliver clean air and safe water systems, and promote renewable power.
- An additional $2.8 billion will be invested over the next 11 years through a series of national programs.
In particular, the Government proposes to invest the following national programs over the next 11 years:
CHARTING A BETTER FUTURE FOR RURAL AND NORTHERN COMMUNITIES
Because rural and northern communities have unique infrastructure needs that require a more targeted approach, the Government will invest $2.0 billion over 11 years to support a broad range of infrastructure projects.
The Government will invest an additional $400 million in an Arctic Energy Fund to begin this work by addressing energy security for communities north of the 60th parallel, including Indigenous communities.
DELIVERING BETTER TRANSPORTATION TO SUPPORT TRADE
As announced in the 2016 Fall Economic Statement, the Government will invest $10.1 billion over 11 years in trade and transportation projects. This investment will build stronger, more efficient transportation corridors to international markets and help Canadian businesses compete, grow and create more jobs for Canada’s middle class.
MOVING PEOPLE AND HELPING BUSINESSES COMPETE
Canada’s Trade and Transportation Corridors Initiative will help to improve the quality of trade infrastructure across Canada. It will prioritize investments that address congestion and bottlenecks along vital corridors, and around transportation hubs and ports providing access to world markets.
NATIONAL TRADE CORRIDORS FUND
To address urgent capacity constraints and freight bottlenecks at major ports of entry, and to better connect the rail and highway infrastructure that delivers economic growth across Canada, the Government proposes to establish a new National Trade Corridors Fund.
Budget 2017 proposes to provide $2 billion over 11 years to support the Fund’s activities. At least an additional $5 billion will be provided through the Canada Infrastructure Bank to address trade and transportation priorities.
TRADE AND TRANSPORTATION INFORMATION SYSTEM
The Government proposes to establish a new Canadian Centre on Transportation Data, and an open data portal, to serve as authoritative sources of multi-modal transportation data and performance measures.
To support this measure, Budget 2017 proposes to provide $50 million over 11 years to Transport Canada to launch a Trade and Transportation Information System.
Infrastructure Partnerships Through Bilateral Agreements
To promote closer, more effective collaboration between governments, the Government will work with provincial and territorial partners to establish and support infrastructure outcomes that make sense for Canadians.
The bilateral agreements will be negotiated in the coming months, and provide funding for:
- $100 million to support next generation smart grid, storage and clean electricity technology demonstration projects.
- $200 million to support the deployment of emerging renewable energy technologies nearing commercialization.
- $220 million to reduce the reliance of rural and remote communities south of the 60th parallel on diesel fuel, and support the use of more sustainable, renewable power solutions.
- $120 million to deploy infrastructure for electric vehicle charging and natural gas and hydrogen refuelling stations, as well as to support technology demonstration projects.
- $182 million to develop and implement new building codes to retrofit existing buildings and build new net-zero energy consumption buildings across Canada.
- $2 billion for a Disaster Mitigation and Adaptation Fund to support national, provincial and municipal infrastructure required to deal with the effects of a changing climate.
- Public transit infrastructure, including new construction and rehabilitation.
- Infrastructure to support greenhouse gas mitigation efforts in provinces and territories, as outlined in the Pan-Canadian Framework on Clean Growth and Climate Change.
- Infrastructure that will help communities prepare for challenges that result from climate change.
- Other green infrastructure that supports the health of our environment, such as water and wastewater infrastructure.
- The unique infrastructure needs of rural and northern communities, including delivering more reliable energy networks and greater digital connectivity.
- Cultural and recreational infrastructure to build stronger communities and neighbourhoods.