September 21, 2009

Stimulus funding

British Columbia municipalities lament lack of provincial cash

RICHARD GILBERT

staff writer

B.C. municipalities are concerned the provincial government is moving too slowly to take advantage of all the funding available for new infrastructure construction under the federal stimulus package.

The centrepiece of the last federal budget is the $11.8 billion stimulus package for new infrastructure investments over the next two years. The Union of British Columbia Municipalities estimates that B.C.’s Infrastructure Stimulus Fund (based on a per capita formula) is worth an estimated $1.04 billion, when combined with provincial matching funds.

“Our concern is that the window of opportunity for getting this money is closing,” said Robert Hobson, UBCM president.

“We are only one construction season away from the deadline for this program and there may be an election coming soon. This means nothing would be dealt with until after the election or new agreements may be arranged to spend the money elsewhere.”

In order to maximize the impact of the stimulus package, the federal government planned to make this funding available to “shovel ready” projects as quickly as possible.

All projects under the Infrastructure Stimulus Fund must be completed before March 31, 2011.

“The funding which the federal government has made available to us will not be around indefinitely,” said Hobson.

“UBCM expects the province to keep pace with other jurisdictions so that local governments can access this funding for their communities. We have been told that the federal funds are ready to flow, but without matching provincial support, the money will go elsewhere.”

To date, only 25 per cent of the estimated $520 million in federal funding available to B.C. has been committed.

“B.C. communities have been waiting with their shovel ready projects for nearly eight months,” said Hobson.

“If you look at what is happening in the other provinces, British Columbia is clearly falling behind in the delivery of stimulus and Building Canada funding.”

The funding announced in the federal budget is contingent upon each province entering into an agreement with the federal government.

According to Hobson, the delay in B.C. is because the province is one of only two jurisdictions in Canada that have not signed allocation agreements.

This agreement determines where the money will go and what types of projects are allowed.

The lack of an allocation agreement between the governments is also causing funds from other programs to be delayed.

The federal budget also included provisions to accelerate the Building Canada- Communities Component Fund (BC-CCF) program which intends to deliver seven years of funding in only two years.

It also provided a $65 million top up to BC-CCF that was contingent upon matching funds from the BC government.

Eight of ten provinces have already disbursed 100 per cent of the accelerated Building Canada funding and 100 per cent of the top-up in their jurisdictions.

So far, the B.C. government has committed only about half of the accelerated funding and none of the $65 million top-up.

In addition, $39 million was allocated for communities with populations greater than 100,000 under the Major Infrastructure Component of Building Canada.

Added to this problem is the fact that provincial projects have received most of the allocated stimulus funds.

“The province has a significant problem funding their own projects and would like to spend most of this money on provincial projects rather than local government projects,” said Hobson.

“When the budget was announced, (federal Finance Minister John) Baird said a substantial amount of this money should go to local governments.”

On a national level, about 60 per cent of the approved stimulus funding has been for local projects.

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