Politics - Federal

Big City Mayors: Infrastructure, Not Tax Cuts

By Ryan McGreal
Published January 15, 2009

Yesterday, the Big City Mayors Caucus (BCMC) of the Federation of Canadian Municipalities (FCM), representing the 22 biggest cities in Canada, met with Federal finance minister Jim Flaherty to talk about the FCM plan to stimulate the economy through new infrastructure spending, not tax cuts, in the upcoming January 27 federal budget announcement.

Delivering a list of over 1,000 "shovel ready" projects, the Caucus pressed the federal government to adopt the federal gas tax model to deliver infrastructure funds directly to cities. They argued that the current process, in which the government approves funding for projects through the Building Canada Fund, is slow and cumbersome.

According to Hamilton Mayor Fred Eisenberger, a member of the BCMC in Ottawa for the conference, "the federal government has given assurances that the budget will indicate significant infrastructure dollars."

But he cautioned that the big question for the Big City Mayors is "what kinds of conditions" the funding will include. "How quickly will the money flow? Will it be tied up in red tape, blue tape, white tape like the Building Canada Fund?"

Eisenberger argues that the gas tax is a much better model to follow, because it delivers funds quickly and seamlessly, and it already includes accountability in the form of conditions on how it can be spent. "The gas tax money is an agreement already in place. The same agreement can be applied here to do work on the ground."

He added that the government may need to "tweak" the agreement to make it more specific to infrastructure projects.

Estimates of the municipal infrastructure deficit - money not spent on necessary infrastructure - range well over $100 billion, and the FCM has long advocated for more federal money to cover the shortfall. (Before the Harper government cut two percent from the GST, the FCM advocated taking one percent of the GST and transferring it directly to cities.)

With a deepening global economic crisis, the BCMC argues, infrastructure spending can serve double duty to address a critical need and create over 150,000 new jobs, which will, in turn, have a multiplier effect through the economy.

Eisenberger argued that tax cuts won't have the same effect. "Tax cuts will not spill over into the economy and trickle down. People will keep it in their pockets for future savings, not spend it."

Hamilton's wishlist amounts to $275 million and includes $200 million to upgrade our wastewater treatment facilities to handle future planned growth. The BCMC estimates that these projects will produce 3,000 jobs in Hamilton.

The BCMC met today with the leaders of the other federal parties, and will make a presentation to provincial leaders tomorrow at the First Ministers' Conference.

Ryan McGreal, the editor of Raise the Hammer, lives in Hamilton with his family and works as a programmer, writer and consultant. Ryan volunteers with Hamilton Light Rail, a citizen group dedicated to bringing light rail transit to Hamilton. Ryan writes a city affairs column in Hamilton Magazine, and several of his articles have been published in the Hamilton Spectator. He also maintains a personal website and has been known to post passing thoughts on Twitter @RyanMcGreal. Recently, he took the plunge and finally joined Facebook.

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By LRT? (anonymous) | Posted January 15, 2009 at 17:35:32

Why not take this perfect oportunity to ask for LRT Funding? Doesn't that only make sense? They talk about the economic spinoffs of 'sewage treatment' or whatever... think of the economic spinoffs from buying all necessary LRT elements from Canadian Manufacturers?

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By Shovel Ready (anonymous) | Posted January 16, 2009 at 07:57:18

My guess is its because they're pushing for funds for "shovel ready" projects where all the EA, tendering etc. is already done and they can start building as soon as they get the money. LRT is still a couple of years away from being shovel ready.

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By arienc (registered) | Posted January 19, 2009 at 13:13:52

I find it rather ironic that mayors are looking for big government help in building more infrastructure.

The biggest cost on the property tax bill is of course...maintenance of all that public infrastructure.

Unless any new infrastructure built replaces old infrastructure that is costly to maintain, or is able to be used to generate new revenues or efficiencies, we merely create a burden for our descendants to pay the bill to maintain down the road.

I'd rather we use any stimulus to make sure we catch up on overdue maintenance of existing infrastructure, and only put in new infrastructure where there is a pressing need for efficiency improvements (e.g. things like LRT). Not sexy, but we run the risk of burdening future generations with too much stuff to have to look after, and all of it in poor condition.

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