Infrastructure Gas Tax Dollars Fast-Tracked to Municipalities by Feds

As financial pressure increases on provinces and municipalities across Canada from a massive decline on revenues due to COVID-19, the traditional debate about “who pays for what” is top of mind for governments at all levels.

Prime Minister Trudeau and Infrastructure Minister Catherine McKenna announced that the annual payment of $2.2 billion for infrastructure from the Federal Gas Tax Fund (2020-21) would be fast-tracked in one single payment in June.  Normally, this money is distributed in two tranches each year.  Provincial ministers were to be briefed about the details later today.  Funding can be used for capital projects, such as access to high-speed broadband, improvements to water and road systems, and the building of cycling and walking paths.

Minister McKenna was also asked whether dollars for day-to-day operations were following and she noted that while there is a need for municipalities to proceed with capital projects, there is also a huge challenge with the decline in day-to-day revenues.  On the positive side, however, she also noted today’s announcement was “just a first step.”

While stakeholders like the Federation of Canadian Municipalities welcomed the announcement, they noted that the money has already been accounted for in municipal budgets – and that the shortfall in losses is in the $10-$15 billion range.  Ontario Premier Doug Ford also noted that the dollars announced today have already been budgeted and while the advance payment is welcome, new money is needed.  He also suggested Ontario pays $13 billion more than it receives back from the federal government.

Today’s announcement simply highlights the coming federal/provincial tensions over COVID-19 money.  While COVID-19 is new, the tensions between federal, provincial, and municipal governments have been around for a long time regardless of the partisan stripe of who sits in the PM or Premiers’ chairs.

More Federal Dollars for Tourism and for Indigenous Services

As federal and provincial parks begin to open and as Canada moves towards summer, Economic Development Minister Mélanie Joly announced $70 million for tourism support across Canada, including $30 million for Destination Canada.

In addition, last week, Indigenous Service Minister Marc Miller announced $650 million for COVID-19 healthcare support for First Nations, Inuit, and Metis communities, including income support and support for women’s shelters.