“building municipal infrastructure”
TRANSCRIPT
A Critical Conversation: “Building Municipal
Infrastructure”
Thursday, February 25th 2010
Carleton University, Ottawa, Ontario
www.cvsrd.org
Welcome!
CURE conducts multi-disciplinary research on:
Community governance
Municipal government
Citizen engagement
Infrastructure
Multi-level governance
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Introduction
“There is a need to foster a stronger, more multi-disciplinary community of researchers interested in infrastructure and
communities issues and willing and able to generate policy-relevant research”
INFC Performance Report 2005-06, p.12
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The Big Picture Situating Our Research
The Big Picture:
Place matters (again!)
Multi–level governance
New deal-GTF/urban and infrastructure renewal (ISF)
Integrated Community Sustainability Plans (ICSPs)
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Democratic renewal
Responsive, enabling government
Influencing Local Outcomes*
International Agencies & Agreements
Federal, Provincial, Municipal Government
Sustainable Cities & Communities
*Source: Tindal & Tindal 2008, p.166
Multi-Level Governance
Federal/ provincial transfers:
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Unpredictable
Strategic investments or redistributive politics?
Who decides priorities?
Who‟s accountable?
Pressures for Urban Renewal
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Globalization, immigration, and urbanization
Downloaded responsibility for public services
Declining investment in public infrastructure
% of GDP
Source: Department of Finance Canada
Crumbling Infrastructure
Average Age of Asset Types (Age in Years)
Source: Statistics Canada. Investment & Capital Stock Division
Local Government's Fiscal Crisis
Current tri-level arrangements for managing the cities are increasingly seen as anachronistic and dysfunctional, a product of
„hourglass federalism‟
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5042
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Government's Share of Every Tax
Dollar (in cents)
Federal
Provincial
Municipal
Federal Government
with resources
Provinces
Municipalities with many
problems and few resources
In 2007, the fiscal infrastructure deficit was estimated at $123 billion, and is believe that is growing by over $2 billion annually
Municipalities Fiscally Challenged
Federal (%)
Provincial (%)
Municipal (%)
Share of Total Taxes Raised
50 42 8
Share of assets held 10 40 50
Expenditure per capita 1988-2005
+0.9 +0.6 -0.9
Revenue per capita 1988-2005
-0.2 +0.8 +0.6
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*Source: Tindal & Tindal 2008
...and Investment
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Sustainable Construction...
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Bruntland...22 years ago
...local governments have not been given the politicalpower, decision making capacity, and access torevenues needed to carry out their functions. Thisleads to frustration, to continuing criticism of localgovernments for insufficient and ineffective services,and to a downward spiral of weakness feeding onfrustration
…To become key agents of development, citygovernments need enhanced political, institutional,and financial capacity, notably access to more of thewealth generated in the city. Only in this way cancities adapt and deploy some of the vast array of toolsavailable to address urban problems.
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Agenda 21…. „local matters‟
Because so many of the problems and solutions being addressed by Agenda 21 have their roots in local activities, the participation and cooperation of local authorities will be a determining factor in fulfilling its objectives. Local authorities construct, operate and maintain economic, social and environmental infrastructure, oversee planning processes, establish local environmental policies and regulations, and assist in implementing national and subnational environmental policies. As the level of governance closest to the people, they play a vital role in educating, mobilizing and responding to the public to promote sustainable development …Each local authority should enter into a dialogue with its citizens, local organizations, and private enterprises and adopt a local Agenda 21.
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Constitutional amendment
Creating city charters
Governance reform
Public funding of councilors
Options for Municipal Reform
Increased fiscal space for local taxes
Model federal grants on GTF not ISF
Change incentives that produce sprawl
Meaningful „upfront‟ public engagement
Creation of „urban agenda‟ at the national level
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The Gas Tax Fund (GTF)A Conditional Non-matching
Close-ended Transfer
Erika Adams
Intergovernmental Fiscal Transfers
Transfers of monetary assets to another level of government for which the government making the transfer does not:
receive any goods or services directly in return;
expect to be repaid in the future; or
expect a direct financial return.
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Transfers
ConditionalMatching
Open-Ended
Close-Ended
Non-Matching
Unconditional
Transfers in Canada
Historically a dominant feature of the highly decentralized Canadian fiscal framework.
In 2006-2007 transfers amounted to $125 billion dollars $1.8 billion was allocated to Infrastructure Canada $590 million represented the Gas Tax Fund.
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The Policy Problem
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Mid 1990s
Local Government‟s Fiscal Crisis
Pressures for Urban Renewal
The Policy Community
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Creation of a very strong and vocal policy community
The Policy Problem
Elimination of federal deficits
Emergence of large
surpluses
Which started to exert considerable pressure on the federal government for new
recognition, respect, and resources
Promising government actions
Budget 2000 – $2 billion Canada Infrastructure Fund.
Opportunity for All, the 2000 Liberal party platform -recognized the challenges facing cities.
Budget 2001 - $2 billion Strategic Infrastructure Fund.
Caucus Task Force on Urban Issues, chaired by Judy Sgro.
2002, Martin, as Finance Minister, talks about the New Deal.
Implementation delayed by political uncertainty
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BUT
Urban Policy back on the Agenda
In February 2004, the Speech from the Throne introduced the New Deal for Cities and Communities
In July, Minister Godfrey was appointed Minister of State for Infrastructure and Communities.
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Infrastructure Policy Problem
New Ministry
New Urban Policy
Framework
Requirements of the Solution:
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• Avoid fights over the issue of jurisdiction
• Discourage them from clawing back their current level of support
Provinces
• Ensuring that they received the funds and were able to pool, bank, and borrow against the funding
• Meet the needs of any size municipality by allowing them to choose the projects
• Have a strong accountability framework
Municipalities
• Address the fiscal gap
• Responsive to the New Deal‟s political imperatives
• Further its policy goals
Federal G.
Federal‟s Government Response: The Gas Tax Transfer
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Conditional
• Designed to incentivize municipalities to invest in environmentally sustainable infrastructure investments
• Conditionality clause: list of eligible projects and expenditures
Non-Matching
• Understanding the fiscal position of the municipalities the government chose not to require a matching contribution.
Close-ended
• When first announced the GTF was a $5 billion program delivered over 5 years.
A Hybrid Transfer
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Contributions
Complex Accountability Framework, i.e. an annual
expenditure report, an outcomes report, and an
audit report
Grants
Funding given up-front
Federal government not involved in the selection of
projects
The GTF disburses funds based on a formula, and it has characteristics of:
A Transfer with Ambitions Objectives
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An overarching vision of where Canadian cities and communities of all sizes should be in 30 years
Transfer Goals:Improvement of the quality, efficiency, effectiveness and sustainability of environmental municipal infrastructure
Transfer Expected Outcomes:Cleaner air, cleaner water and the reduction of green house gas emissions
Elements of the New Deal
The Gas Tax Fund
Money
Using an urban lens
Viable, politically appealing, option to address the need for stable, predictable, long-term funding for municipalities
The focus on hard infrastructure reflects the needs expressed by municipal leaders
Build new relationships with provinces, municipalities & territories
Created purposeful partnerships and emphasized flexibility based on the belief that municipalities know what is better for them and will use the money accordingly
An Allocation-driven, Predictable, Long-term Transfer
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In 2005, the government started sharing with municipalities (based on their population) 1.5 ct. per litre, or $600 million in revenues.
For 2009-2010, this amount increased to 5 cents per litre, or $2 billion annually
In 2007, the Harper Conservatives, extended the funding from 2010 to 2014 at $2 billion per year.
Then, the 2008 Budget announced that the GTF would be extended at $2 billion per year beyond 2014 becoming a permanent measure
A Precedent Setting Transfer?
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• This approach involves negotiating contracts with the provinces individually to fund a program of mutual interest.
• This opens the possibility that each one could be substantially different in order to meet specific needs
The modified contribution agreement model may prove an attractive option for future federal-provincial fiscal arrangements
• Some evidence of this is:
• The fact that Toronto is a direct signatory
• The involvement of AMO and UBCM as administrators
• The successful pre-deal consultations between Minister Godfrey, city mayors, and other and municipal officials.
Some believe this initiative has established a basis for future direct relationships between the federal government and municipalities
A Precedent Setting Transfer?
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• In BC, UBCM is in charge of disbursing the funds, and in the case of Ontario is AMO.
• These agencies are not NGOs in the usual sense because they are associations of municipal governments, and allowing them to have this central delivery role is an interesting development.
Use of non-governmental organizations as delivery vehicles for the distribution of funds and the accountability for the use of those funds
Why does it matter?
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The design and implementation of intergovernmental transfer payments, as Shah has argued, create incentives that can have “strong implications for national, regional, and local fiscal management; macroeconomic stability; distributional equity; allocative efficiency; and public services delivery.”1
1 Shah, A. (2006, October). A Practitioner‟s Guide to Intergovernmental Fiscal Transfers. World Bank Policy Research Working Paper 4039 .
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The Gas Tax FundOur Research Project
Map of Transfers of Federal Gas Tax
UBCM
AMO
Agreements:Between Canada & the Province or TerritoryBetween Canada, British Columbia & UBCMBetween Canada, Ontario, AMO & the City of Toronto
Our Research
Conducted over the past three years
Focused on:
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Strategic Capacity
Administration
Accountability Framework
Communications
Governance
Methodology
Province MunicipalityNumber of
interviewees
Ontario Ottawa 7
Toronto 10
British Columbia Vancouver 4
Kelowna 2
Victoria 1
Alberta Calgary 12
Ft. McMurray 4
Edmonton 4
Nova Scotia Halifax 5
Quebec Gatineau -
Montreal -
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35
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Our Case StudiesThe Findings
Tamara Krawchenko
Allocation of Funds 2005-2010
Allocation of Funds, percentage out of total for years 2005-2010
12.7%
9.5%
3.0%
3.3%
37.3%
23.0%
2.3%
2.9%
0.8%
1.3%0.8%0.8%
0.8%
1.6%British Columbia
Alberta
Saskatchewan
Manitoba
Ontario
Québec
New Brunswick
Nova Scotia
Prince Edward Island
Newfoundland & Labrador
Yukon
Northwest Territories
Nunavut
First Nations
QB
BC
ON
AB
British Columbia
Partnership of GOC, Province, UBCM and Municipalities
UBCM administers the program
Three delivery mechanisms:
Community Works (CWF), Strategic Priorities (SPF), and Innovations (IF)
Municipalities divided into three tiers
Applicable Area of BC CWF SPF
Tier 1 All areas of British Columbia except those areas in Tier 2 and Tier 3 75% 25%
Tier 2*
Regional District (RD) of Okanagan-Similkameen, RD of Central Okanagan, RD of North Okanagan, Capital RD, Cowichan Valley
RD, RD of Nanaimo, Fraser Valley RD, Squamish Lillooet RD. 50% 50%
Tier 3 Greater Vancouver Regional District (GVRD) - 100%
Vancouver Kelowna
“Translink can‟t meet demand; we are so overcapacity that we‟re struggling. The money allows us to start getting the services out immediately, and the GTF means that we do not have to jump through hoops anymore to get the money. It takes 2 years to order a bus, so this money allows us to plan in advance, and to take full advantage of large orders to get a better price. The stability of the funding is absolutely critical (GT-Interviewee 37, 2008, Vancouver).”
“The sustainability movement in BC has caught on all by itself”
(GT-Interviewee 35, 2008).
“The big thing is to keep [the GTF] in place, keep it going; now is not the time to pull back” (GT-Interviewee 37, 2008, Vancouver).
Ribbon-cutting ceremonies, are just “background noise” for the tax payers (GT-Interviewee 35, 2008)
“The management committee overrules the UBCM‟s staff recommendations two or three percent of the time, but in most cases their analysis is very appropriate” (GT-Interviewee 35, 2008).
Alberta
Funds allocated to municipalities through the Ministry of Infrastructure and Transportation, without administrative or overhead charges
AB receives $476.9 million over the 2005-2010 period.
Calgary Ft. McMurray
“Here it‟s a „hand off‟ approach” (GT-Interviewee 24, 2008, Provincial).
“The federal government is a partner in terms of infrastructure requirements because of their collection of gas tax and in terms of the income tax - I think they have a responsibility of reinvesting that tax” (GT-Interviewee 20, 2008, Municipal).
“We don‟t treat the federal government as being a major player at all [with regards to infrastructure funding]. Neither the process nor the commitment to get money – we are having to front end a lot of costs which impacts our cash flow and it impacts and delays a lot of our projects; it affects project and processes” (GT-Interviewee 28, 2008, Municipal).
“[The ineligible costs] become really challenging when we can‟t contract third parties to do the work. And using the money to buy land would be helpful as well – and this is a long-standing condition that has not been addressed by the federal government or the province”
(GT-Interviewee 18, 2008).
“Municipalities are front and center in terms of identifying priorities and determining how the money is spent” (GT-Interviewee 22, 2008, Provincial).
Ontario
Toronto signed bilateral agreement with federal government
Funds for all other Ontario municipalities administered through AMO
GOC contributes $1,865.50 million over the original 5 years of funding
Toronto Ottawa
Toronto‟s relationship with GOC “night and day now compared to what it was” and “getting exponentially better with time” (GT-Interviewee 02, 2009)
The process is “as smooth as anything we have seen with any of the other programs,” especially when compared to the “bureaucratic nature of the Building Canada Fund which always holds things
up”(GT-Interviewee 02, 2009)
“Equity is not equal when you are figuring out how to address funding in municipalities; a set of conditions that works for Toronto will not work for Markham” (GT-Interviewee 08, 2009)
“It would not really make sense to ask municipalities to go and undertake an entirely separate exercise for sustainability planning”
(GT-Interviewee 16, 2009)
“If you want our big cities to be competitive you have got to get a decent transit system, especially in the largest cities in Canada that represent 11% of the country‟s GDP (GT-Interviewee 02, 2009)
Nova Scotia
GOC contributes $145.2 million over the 2005-2010
Administration overseen through the Canada-Nova Scotia Infrastructure Secretariat
Policy support by Gas Tax Oversight Partnership Committee
Funds allocated basis of formula recommended by the UNSM to the Minister of Service Nova Scotia and Municipal Relations
HRM receives 42-44% of the Gas Tax funding, depending year
Halifax
“We are positioned better than any other municipality [to meet sustainability goals]” (GT-Interviewee 30, 2009, Municipal).
“On a go forward basis, if we design compact transit friendly communities, financially, there are lower operating costs and you can save capital expenditures related to widening of different corridors. But this requires initial investment in transit and central pipe services. The Gas Tax came along and it fit really well with these priorities” (GT-Interviewee 30, 2009, Municipal).
“I see [the GTF planning requirements] as a very positive thing.” (GT-Interviewee 30, 2009).
“It would be better to have a funding commitment that matched the ICPS time frames, or the latest amendments around water and wastewater. So, better information would be provided to enable
long term planning (GT-Interviewee 32, 2009).
As the CNSIP, MRIF and transit agreements expire, “the GTF will become our only sustainable funding source” (GT-Interviewee 32, 2009).
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Conclusions Issues To Reflect on
Funding OptionsExternal Revenue Sources
New Federal/ Provincial Transfers
Borrowing
Existing Federal/ Provincial Transfers
Internal Revenue Sources
New Fiscal Instruments (e.g. new
taxing powers)
Existing Fiscal Instruments
(e.g. User Fees, General
Operating Revenue,
Property Taxes)
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Available Resources (in the case of transfers)
Laws/
Regulations
Accountability/ Transparency
Municipality's size, economic
standingEconomic Efficiency
Things to Consider
Legitimising the Process
Community Engagement
PromoteSustainability
PromoteCapacity Building
EnhancePublic
Participation
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Federal requirement for the development
of ICSPs by municipalities
City of Ottawa‟s Neighbourhood
Planning InitiativeExamples
Two Fundamental Questions
1. What is the degree of local autonomy that the GTF extends to municipalities?
2. What are the opportunities that the GTF provides for citizen participation?
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Degree of Local
Autonomy
Opportunities for
Participation
Legitimacy of the program
Panel 1- Discussion: The Gas Tax Program - Implications
of the Findings for Federal Funding of Municipal Infrastructure
•Moderator: Susan Phillips
•Speakers: Robert Hilton, Carleton University Christopher Leo, University of WinnipegMichael Buda, Federation of Canadian Municipalities Claude Blanchette, Federal Government of Canada
Panel 2- Discussion: The Impact of the Gas Tax on the
Infrastructure Deficit and an Assessment of Alternative Sources of
Municipal Funding
•Moderator: Chris Stoney
•Speakers: Harry Kitchen, Trent University Enid Slack, University of Toronto Robert Hatton, City of Toronto
Integrated Community Sustainability Plans: Implications of the Gas Tax for Social Infrastructure, Community Engagement and Sustainable Development
•Moderator: Susan Phillips
•ICSPs Overview: Teresa Bellefontaine
•Speakers: Ann Dale, Royal Roads University Shawn Menard, Centretown Citizens Community Association Chris Stoney, Carleton University Paula Speevak Sladowski, Carleton University
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Integrated Community Sustainability Plans: Accountability through
Community Engagement
Teresa [email protected]
ICSPs
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ICSP
Land use
Transportation
Capital
Investments,
Infrastructure
Housing
Environment – air,
water, GHG Culture
Social
development
Inter-municipal
plans
Economic
development
“a long-term plan, developed in consultation with community members that provides direction for the community to realize sustainability objectives it has for the environmental, cultural, social and economic dimensions of its identity.”
Source: Kris Nanda Presentation -AMO Conference - August 20, 2007
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ICSPs: Risks to Program logic
ICSPS require:
Municipal commitment to the philosophical underpinnings of sustainability planning
Municipal capacity for a systems approach
Appropriate timelines and funding for community engagement
Public appetite and capacity for the process
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Integrated Community Sustainability Plans: Implications of the Gas Tax for Social Infrastructure, Community Engagement and Sustainable Development
•Moderator: Susan Phillips
•ICSPs Overview: Teresa Bellefontaine
•Speakers: Ann Dale, Royal Roads University Shawn Menard, Centretown Citizens Community Association Chris Stoney, Carleton University Paula Speevak Sladowski, Carleton University
Local DecisionsOttawa‟s 20-20 Vision and LRT -
A Flawed Process with Bad Outcomes
Case 1: Lansdowne „live‟
Local DecisionsOttawa‟s 20-20 Vision and LRT -
Case 2:NPI Process
Neighbourhood Planning Initiative (NPI)
• A more inclusive and integrated approach to neighbourhood development
Framework
• Build on local knowledge
• Reflect the needs, priorities, and concerns of local citizens
• Increase inter-departmental collaboration
Designed to
• Improved physical and social quality of life for the citizens of Ottawa
Outcome
NPI continued
• The extent to which the NPI improve both the decision making process and the outcomes, such as more efficient and effective usage of city resources, and improved coordination of services
• Governance issues, such as the emphasis given to community engagement
• Practical issues, such as the extent to which urban planners feel helped or hindered by neighbourhood representation, and the mechanisms being used to engage the communities involved
Research Interests
Degrees of Engagement
Levels of Citizen Engagement: Queensland Government
Information A one way relationship in which government delivers information to citizens
Consultation A two-way relationship in which citizens provide feedback on issues defined by government
Active Participation A collaboration in which citizens actively shape policy options, but where government retains the responsibility for final decisions
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CONCLUSIONS
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