May 21, 2009

Federal government won’t budge on two-year infrastructure deadline

RICHARD GILBERT

staff writer

When it comes to funding for new infrastructure construction under the stimulus package, the federal government is taking a tough stance on project deadlines.

“This is not a long-term program” said Transport and Infrastructure Minister John Baird. “We have Infrastructure Canada if you want to build a subway system. If you are unsure that you can get it done, then this is probably not a good program.”

He was speaking with the Association of Canadian Engineering Companies (ACEC) about infrastructure and the federal government’s stimulus package, during a conference call on May 20.

The centre piece of the last federal budget was the announced $11.8 billion stimulus package for new infrastructure spending over the next two years.

Baird made it very clear to the 125 ACEC members listening in on the call that the deadline for federal government infrastructure funding will not be extended.

“The priority is on projects that can be done quickly,” he said.

“The majority of the projects will be done next summer. If a municipality can’t spend the funds by March 2011, they should not apply for it. We will have to impose some discipline, because we have a lot of projects. Many projects will have to be turned down.”

Some ACEC members were concerned that the time frame was not long enough.

“One of the conditions of infrastructure funding is the project has to be completed by March 2011,” said ACEC president Jeff Morrison.

“There a lot of projects that have yet received approval for 2009 and can only put the shovel in the ground for the most basic projects.”

Morrison said many of his members were asking for an extension of this deadline so more complex projects could be undertaken.

However, it didn’t sway the minister.

“The stimulus is one-time funding and can’t be sustained over the long term,” said Baird. “The $12 billion in stimulus spending over two years is a one time deal.”

Another factor that may slow down the flow of money is the requirement that provinces and municipalities must agree to match federal funding.

“If a province will not match the federal money, I will not give them money,” he said.

However, he said the federal government can spend money on a port or an airport through Building Canada or the Gateway program, if a province can’t match the funds.

The federal government is implementing several measures to facilitate the flow of funding for infrastructure projects across Canada.

“We have a one page application form and are doing everything we can to streamline the bureaucratic and administrative process,” Baird explained.

Another measure taken to streamline the funding process is to hand over 25 per cent of a project’s cost up front, with the remainder of the funds provided on an invoice basis.

Critics of the stimulus program are worried about the government’s rush to invest money on infrastructure projects without due diligence.

Finance Minister Jim Flaherty said on Jan. 27 the government plans to stimulate the economy and create job by transferring funds to shovel ready construction project as quickly as possible.

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